Chapter 13 Administration and Risk Management Final

Ticket Rebate

An additional charge on a ticket that goes to the facility.

What's a soft tax on players?

An additional tax imposed on visiting professional athletes.

Bonds

An interest-bearing certificate issued by the government or corporation, promising to pay interest and to repay a sum of money.

What do facilities include?

Arenas, stadiums, convention centers, theaters, performing arts facilities, racetracks, and amphitheaters.

What's are some things that would be included in a crowd management plan?

Categorizing the type of event, knowing surrounding facilities/environment, being aware of team or school rivalries, threats of violence, crowd size and seating configuration, having an existing emergency plan, and using security personnel and ushers.

What are some features and skills of a marketing director?

A fast-paced job that is highly stressful and has a challenging career track; this person needs people skills, sales ability, written skills, and oral communication skills.

What sort of things are now normal in day-to-day security options?

Bag checks, pat downs, and metal detectors.

1960 Stadium Construction

Baseball-only stadiums were no longer produced during the 1960's; some cities built shiny new dual sport "cookie cutter" stadiums (and arenas) to keep sports teams enthusiastic about their hometowns.

Why do cities subsidize (financially support) sports?

Because no recent facility appears to have earned a reasonable return on investment; cities will continue to compete against each other for scarce sports franchises.

In response to the sustainability issue the facility management industry is working to do what?

Build green buildings, create "green management teams," reduce waste, cut energy usage and pollution, and implement recycling programs.

Sport facilities are thought to improve the local economy in what four ways?

Building a facility that creates construction jobs, people who attend games or work for the team generate new spending in the community and expand local employment, team attracts tourists/companies to the host city, and new spending has a "multiplier effect."

What's the benefit of building a stadium?

Building a stadium is good for a local economy only if a stadium is the most productive way to make capital investments and use its workers.

What are some things that the American Disabilities Act requires new facilities to be accessible to people with disabilities?

Concession areas, parking areas, water coolers, public telephones, drop-off and pick-up areas, visual alarms, restrooms, entrances and exits, and signs.

What's an example of combined financing?

For the construction of a new football stadium for the Broncos - Denver voters approved to subsidize $300 million and ownership was required to provide $100 million and cover cost of any overruns.

What are the two types of taxes?

Hard and Soft Taxes.

Soft Taxes

Includes taxes added to car rentals, taxis, hotels/motels, restaurants, "sin: (alcohol, tobacco, gambling, etc.), and players.

Why does implementing sustainability in a facility make financial sense?

It reduces operating expenses and builds brand.

What's the certification of sustainability for facilities?

LEED Certification - Leadership in Energy and Environmental Design which has 4 levels that are certified, silver, gold, and platinum certifications.

Who are the 3 largest promoters?

Live Nation, AEG Live, and Feld Entertainment.

What are some private facility financing mechanisms?

Many universities gain funding through athletic development and fundraising such as naming rights (private donors, companies, etc.), food and beverage rights, luxury suites and premium seating, and advertising rights.

What's an example of a soft tax?

NFL Vikings used a tobacco tax to help fund their new stadium.

What are the primary expenses for facilities?

Mortgage or rent, maintenance/repairs, utilities, taxes, marketing/sales, personnel, and insurance.

What is a Group Ticket Salesperson responsible for?

Primarily responsible for selling large blocks of tickets for various events to groups such as corporations, charity organizations, schools, Boy Scout and Girl Scout troops.

What's the combined financing mechanism?

Private and public funding can be combined to build a new facility.

What happens to professional team's private facilities if there's no public support?

Professional team owners have to finance privately.

Why is sustainability a current issue in event management?

Public facilities consume more energy per square foot than any other retail industry.

What are three current issues in event management?

Security, Sustainability, and Americans with Disabilities Act.

Which type of tax is better?

Soft taxes, because they affect a much smaller portion of taxpayers, making it easier to levy.

What may override good economic thinking?

Sports team creates "public good" or "civic pride" may override good economic thinking.

TIF

Tax-Increment Financing is available in a specific square mileage of land around a facility (usually an urban area that has been identified for renewal or redevelopment) where the tax base is frozen and any additional taxes added are used to repay the TIF bonds.

What's an example of a TIF?

The KFC Yum Center that's home to UL Men's and Women's basketball and Women's volleyball teams and they're surrounded by a TIF district with a 6-mile radius.

Examples of Ancient Facilities Names

The Los Angeles Forum, Los Angeles Coliseum, and the Globe Theater.

What's an example of an Asset-Backed Bond?

The Pepsi Center, the Denver Nuggets, Colorado Mammoth, and Colorado Avalanche are all financed through asset-backed bonds in the 1990's.

What's an example of private facility financing?

The University of Maryland signed a 25-year agreement with Comcast Cable for their naming rights of its basketball arena.

What's the "multiplier effect?"

The increased local income that causes more new spending and job creations.

Rental Agreements

The promoter rents the venue and pays other external costs.

What are the box office directors responsible for?

The sale of all tickets to events and collection of all ticket revenue.

What is the market for university and college venues generally dictated by?

The student population.

What did the ADA do in 2011?

The updated the Act with changes directly applicable to stadiums and arenas.

Privately Owned Facilities

Their motive is solely profit.

How did security change after 9/11?

There are now increased focus, attentions, and resources; these things include physical barriers to entry, surveillance technology, and an increase in security personnel presence.

Asset-backed Bonds

These bonds are sold by the team, and are secured through specific assets.

Hard Taxes

This includes taxes on local income, real estate, personal property, and general sales, and often require voter approval because burden of payment becomes the public's.

What is the main purpose of security at events?

To ensure the safety and comfort of all spectators.

What's the purpose of the American Disabilities Act?

To prevent discrimination against qualified people with disabilities in employment, public services, transportation, public accommodations, and telecommunications services.

Marketing Fund

A fund where venue and catering companies put profits from the shows aside for future programs.

Event Director

Acts as the point person for the facility during the show; they're in charge of the safety and satisfaction of all facility users and they supervise personnel working the events.

Why are arenas successful in multi-purpose buildings?

Because generally the building design and fan sight lines are similar for basketball and hockey so they have been more compatible co-tenants in arenas than football and baseball have been in stadiums.

Why can't stadium managers maximize bookings?

Because it's more difficult to have bookings with a stadium than an arena but stadium managers try to book events that take advantage of all available spaces.

Why is it important that the operations directors have superior people skills?

Because they're in charge of 50-500 workers.

Concerts

Booked months in advance and the type of performer who will appear depends on the size and age of the venue as well as the building's technology capacity.

When building facilities how do bonds come into play?

Building facilities are usually financed by issuing bonds, bonds allow for larger amounts of money to be borrowed, bonds allow for borrowing over a long period of time, and tax-exempt bonds.

How many categories foes facility ownership fall into, and what are they?

Community or state, colleges, and private facilities.

University Venues

Consist of stadiums and arenas that operate under different economic factors; the universities tend to provide these with tenant teams and other university programs.

Public Financing Example

Convention centers almost always publicly financed - not meant to make money.

Family Event

Disney, Nickelodeon, Sesame Street, and Ice Shows; these are usually multiple days and have special needs in terms of set-up and prep so the turn around can be a challenge; revenue is made off of food, beverage, and merchandise sales.

What are some skills that salespeople must possess?

Excellent interpersonal and presentation skills and be able to handle rejection.

Co-Promotional Model

Facility and promoters split the risk and revenue so that there is a greater profit possible for the facility, however it also carries risk of loss.

What significant change happened in the 1990's?

Fans and owners decided that multi-purpose stadiums were undesirable so that's when baseball only, football only, and soccer specific stadiums were created.

What has to be factored into revenue projections?

Free and reduced tickets for sponsors and fan clubs.

What's an example of a private management that is used by municipal and private ownership?

Global Spectrum manages Philadelphia's Wells Fargo Center.

What's economically impacted from convention centers?

Hotels, restaurants, shopping, entertainment, creation of jobs, and then taxes are usually added in the convention districts to add revenue.

How were team owners able to make more money?

If the city built the stadium.

How did arenas evolve?

In 1927 hockey owners followed the lead of baseball owners and built arenas for their teams, eventually arenas added basketball along with hockey to generate revenue.

When and why did sports facilities evolve?

In the late 19th century and early 20th century because there was a gain in popularity of modern sports which launched the construction of stadiums.

When did the arena construction boom and what occurred in response to that?

In the late 60's and 70's new civic centers and civic arenas in major and secondary markets competed as cities.

Arenas

Indoor facilities that host sporting and entertainment events.

What are other common arena users?

Indoor soccer, arena football, concerts, family shows, and civic events.

Intercollegiate Stadiums vs. Intercollegiate Arenas

Intercollegiate Stadiums - football, concerts, and graduation Intercollegiate Arenas - hockey, basketball, volleyball, gymnastics, concerts, and tours.

Skilled Labor in Metropolitan Venues

Is almost always unionized.

Why are private managements sometimes used by municipal (city) and private ownership?

It provides expertise with dedicated personnel, a network of facilities that creates leverage in cultivating key event relationships and event bookings, and there is greater operating efficiency and resources which allows for the leverage of purchasing and labor costs.

What are the reasons a multi-purpose study was easier to justify to the public?

It was a good investment, it benefits the local economy, and it contributes to a city's quality of life.

What are the facility's annual expense budget that the operations director must manage?

Labor, maintaining and repairing equipment, and purchasing all of the necessary supplies.

Examples of Metropolitan Facilities

Madison Square Garden in New York, Wells Fargo Complex in Philadelphia, and the Staples Center in Los Angeles.

Trade Shows

Multi-day events often in convention centers with nearby hotels.

Sporting Event

Occur in specific seasons, the dates are determined by the league, and the venue has to keep open dates for primary sport tenants for playoffs.

How is public financing accomplished?

Often by initiating or raising taxes on the state or local hospitality industry (i.e. hotel room taxes, restaurant meal taxes, and rental car fees).

Religious Events

Often in the summer, rental arrangements are common; these are good for arenas when bookings could be slower.

How do most facilities hire sales staff?

On a commission-only basis as they generate money for themselves and the facility.

What are some examples of sport specific stadiums?

Oriole Park, Jacobs Field, M&T Bank Stadium, and Columbus Crew Stadium.

Stadiums

Outdoor or domed facilities that host baseball, football, or outdoor soccer teams.

What are university venues financed by?

Private donations, endowments, student fees, fundraising campaigns, and public grants (only public universities).

What two types of taxable bonds are issued by private entities?

Private-placement bonds and Asset-backed bonds.

From the 1960's through the early 2000's what has facility financing been?

Professional sport venues of the Big Four have cost approximately $24 billion; 64% of this being funded through tax dollars; facility financing has been available through bonds, hard taxes, or soft taxes.

History of Facilities

Public assembly facilities have existed since ancient times; the word stadium is derived from the Greek word Stade, which means the site for early Olympic style competition.

How are arenas managed?

Public owners may manage their own facility or contract it out for private management.

In regards of safety what does an event director need to be able to do?

React quickly to any problems during the event, be able to deal calmly with show promoters, and handle angry customers/lost children/other situations.

General Obligation Bonds

Repaid with a portion of general property taxes and requires voter approval; some examples are AT&T Stadium in Dallas, Time Warner Cable Arena in Charlotte, and Tampa Bay Times Forum in Tampa.

Ancillary Revenue

Sale of food, beverage, parking, fees, and sponsorship.

What are the functions of the management team?

Security, clean-up, marketing and sales, scheduling and booking, operations, event promotions, and finance and box office operations.

Local Civic Facilities

Smaller seating capacity (5,000 to 10,000) and located in towns or small cities.

What is considered a saturated market?

Somewhere that has several venues in the local vicinity.

What events will have the biggest impact on the community and venue?

Sports, families, concerts, trade shows, religious events, convocations (graduations and speaking events), and seasonal summer tours/holiday shows.

Why can fewer non-sport events play in stadiums?

Stadiums are significantly larger than other venues, other events can't attract stadium-sized crowds, and concerts are the most common non-sport booking.

Examples of Local Civic Facilities

Sun National Bank Center in Trenton, New Jersey and Santander Arena in Reading, Pennsylvania.

What are some features of local civic facilities?

Tenants typically minor league affiliates, and the niche for events and programs is community based.

What's the IAAM?

The International Association of Auditorium Managers is a professional trade association for the facility management field.

What secret talent is good for a PR or communications director to have?

The ability to "spin" the news, good or bad, and position a facility in the best possible light.

What are two things that make events easier?

The internet has allowed easier booking of events, and online tools help managers quickly react to inquiries for available dates and establish a routing for a program or show.

What did the urban space limitations dictate?

The irregular sizes and shapes of older ballparks such as Fenway Park.

What dictates the ticket sales and ticket prices and why?

The local economy, because the costs of the artist/show and venue expenses have to be covered.

In facility marketing what does the manager have to factor in?

The location of the venue, the event type, the culture of the community, and the production of the event.

What impact is made from convention centers?

There's a big economic impact from local spending during a convention or business meetings.

Private-placement Bonds

These bonds are sold by the team, and they provide a lien on all future revenues generated by the team.

Non-Guaranteed Bonds

These bonds are sold on the basis of repayment from designated revenue sources (concession, naming rights, parking revenues, etc.); they have a higher interest rate but no taxpayer approval.

Tax-Exempt Bonds

These bonds are used by the government entities and are available in two types - general obligation bonds and non-guaranteed bonds.

Community or State Facility Ownership

These places may have extensive regulations and procedures.

What are some features of Metropolitan Facilities?

These venues are generally referred to as a must play based on the size of the potential audience; often have large capacities which allows for greater ticket sales.

What is the primary role of a marketing director?

They act primarily as an in-house advertising agent for various events booked into the facility; this includes buying media, coordinating promotions, and designing marketing materials.

How are convention centers financed and why?

They are publicly financed because the rents and fees charged don't always cover costs.

What do municipalities, state governments or public authorities do when they build arenas?

They build to accommodate prime sports tenants (basketball and hockey are common), they also may build to lure a prime tenant to the facility but also have other common users.

Public Relations Director

They forge working relationships with the media, coordinate TV broadcasts from the facility, write press releases on upcoming events and works with media on facility events and activities, and requires strong writing ability, a creative mind, and the ability to respond under pressure.

On non-hockey nights what did arenas do to fill empty seats?

They hosted boxing matches and Ice Capades.

What does a tax exemption do and who's allowed to use them?

They lower interest on debt and reduces the amount cities and teams must pay for a stadium; federal government allows state and local governments to issue tax-exempt bonds.

What are some features a box office director should have?

They should have patience and a calm demeanor working with the public because the box office is the first impression the patrons have of the venue; they should also have supervisory skills since it's a large department with many employees.

What is the role of the operations director?

They supervise facility preparation for all types of events; they're in charge of coordinating, scheduling, and supervising the numerous changeovers that take place each year as one show moves in and another moves out, and they also manage the facility's annual expense budget.

What is a salesperson responsible for?

They're responsible for selling signage and event sponsorships - an important source of revenue for facilities.

What are some features and requirements of a group ticket salesperson?

They're usually paid on a commission basis and they need to excel on the telephone and in face-to-face presentations.

College Facility Ownership

This funding is based on continued student growth, gifts, and institutional subsidies.

What does the operations director require?

This job requires a knowledge of a facility's mechanical systems.

Booking Director

This position is devoted to booking events for the facility; they talk with agents and promoters as well as attend conventions to solicit events.

What are the revenues for facilities?

Tickets (significant percentage of revenues), luxury suites, club seating, concessions (alcohol), parking, sponsorship (naming rights), and rentals.

Why do they provide the public with a desired event at the best time of the year?

To avoid undue competition with other events that may be occurring simultaneously.

What's a recent trend for arenas?

To have adjacent practice facilities along with an arena to increase event bookings in the arena; some NBA and NHL teams have built their own arenas as well.

What's the facility manager's goal when it comes to promotions?

To keep financial risks low and profit margins high.

What is the goal of management staff?

To provide a clean, safe, and comfortable environment for patrons.

Convention Centers

Typically built and owned by a public entity near the downtown of a large city and are built to lure conventions and business meeting to a particular municipality (competitive between cities).

What personnel do event directors supervise?

Ushers, police officers, firefighters, EMT's, and private security staff.

Metropolitan Public Facilities

Venues are located in large cities and can stage up to 400 events a year and are primarily used by the NBA, WNBA, NHL, and arena football.

What are some promotional tactics with facilities and events?

Venues get boost from local visitor's bureau in promoting events, co-promotional model, rental agreements, and the majority of shows are brought by outside companies.

What're some examples of "cookie cutter" stadiums?

Veterans Stadium, Three Rivers Stadium, and the Riverfront Stadium (all of these host the city professional football and baseball teams).

What are the two viewpoints for arena and stadium financing?

Viewpoint 1 - teams are in it to make money so they should pay to build their venue. Viewpoint 2 - teams have an economic impact on a city; city/state should invest civic pride and community spirit; viewed as "major league city."