More details on Yum Center financial disaster

[honkytonk]

http://www.thevillevoice.com/wp-content/uploads/2013/01/arenareport.pdf

-Operating costs exceed $92,000 per day
-Since opening, arena has lost more than $30M
-Characterized as a "financial impossibility to succeed"
-headed towards bankruptcy if UL doesnt greatly restructure its lease agreement (and that still wont be enough)
-professional teams are needed

[jsglow]

I spent two days in the Yum last spring.  Sure it's big. (Probably way too big.)  But I thought the design was very poor and I can't imagine how it won't go BK.  Candidly, I personally like the BC significantly better.

[chapman]

Adds a whole new reason to call it the Eww! Center.  $15.2M in revenue and $21.3M in debt service FY 2011?  What kind of pitch was made to build this thing?

[ChicosBailBonds]

http://www.thevillevoice.com/wp-content/uploads/2013/01/arenareport.pdf

-Operating costs exceed $92,000 per day
-Since opening, arena has lost more than $30M
-Characterized as a "financial impossibility to succeed"
-headed towards bankruptcy if UL doesnt greatly restructure its lease agreement (and that still wont be enough)
-professional teams are needed

Hmm, sounds like a gov't run operation.

By the way, if the arena does go bankrupt, UL can purchase the building

http://insiderlouisville.com/news/2012/08/01/shocker-u-of-l-has-right-to-buy-kfc-yum-arena-if-arena-authority-defaults/

I wouldn't be so sure, however, that they are going belly up.   http://www.whas11.com/sports/New-management-for-KFC-Yum-Center-credited-for-profits-188431471.html

[honkytonk]

Hmm, sounds like a gov't run operation.

By the way, if the arena does go bankrupt, UL can purchase the building

http://insiderlouisville.com/news/2012/08/01/shocker-u-of-l-has-right-to-buy-kfc-yum-arena-if-arena-authority-defaults/

I wouldn't be so sure, however, that they are going belly up.   http://www.whas11.com/sports/New-management-for-KFC-Yum-Center-credited-for-profits-188431471.html

Hahaha....so some new management group recently took over operations, added some concert dates and BOOM! the arena is profitable! I read through the entire article that I linked in my OP and there is absolutely no way the YUM center can be "profitable" right now. Well, actually there is - they can say its profitable if they exclude the debt service for the year. If they did, then it wouldnt even be the first time its been "profitable" anyways (operating profit).

[MUfan12]

If MU wins on Sunday, I want Buzz to grab the mic, John Thompson style-

"The Yum Center is foreCLOSED!"

[GGGG]

The YUM Center was in part built to attract an NBA team.  However, with the Kings moving to Seattle, and a nice arena sitting in Kansas City, I highly doubt that the NBA will be coming to Louisville anytime soon.

This is a debacle where you have politicians with stars in their eyes who signed away the farm because of the "economic benefits" that stadia are supposed to bring.  Hint:  They don't....study after study has proven this.  Yet municipalities of various sorts will shell out millions, if not billions, to build these things.

[akmarq]

And yet Milwaukee is still about to publiclly finance a new arena.

[Abode4life]

And yet Milwaukee is still about to publiclly finance a new arena.

Except Milwaukee has a pro basketball team and minor league hockey teams, which would help with using the arena for a lot more than college bball games and concerts.


EDIT:  I don't really know if Louisville has a minor league hockey team similar to the admirals that plays at the YUM center.  I don't believe so, but could be wrong.

[GGGG]

Except Milwaukee has a pro basketball team and minor league hockey teams, which would help with using the arena for a lot more than college bball games and concerts.

Yeah, it makes more sense than Louisville.

And my stance has always been, if the taxpayers want to build an arena, that's fine.  More power to them.  Just don't use the "economic benefit" excuse, because it doesn't fly.

[mu03eng]

Yeah, it makes more sense than Louisville.

And my stance has always been, if the taxpayers want to build an arena, that's fine.  More power to them.  Just don't use the "economic benefit" excuse, because it doesn't fly.

These kinds of stadium deals are really no different than the television contracts in that it's all about content.  If you have enough content you can make it profitable.

Where it differs is when the municipalities put real money in return for "indirect" or unquantifiable money out.  The indirect money becomes even harder to come by if there is a dearth of content cause that's the only thing that drives that.

[akmarq]

Yeah, it makes more sense than Louisville.

And my stance has always been, if the taxpayers want to build an arena, that's fine.  More power to them.  Just don't use the "economic benefit" excuse, because it doesn't fly.

Oh I agree that Milwaukee would be better off than Louisville - but I still think it's a terrible idea.

I disagree in your trust in how taxpayers vote to spend the money. I have a good friend who has been to some of the meetings with the mayor and Metro Milwaukee Assoc. of Commerce. The MMAC brought in the same organizer who planned the OKC Thunder move and has basically said that they have the money to swing any referendum the way they want.

My issue is that it it's apparently okay to publicly fianance a luxury good (the arena) but taxpayers won't approve spending for roads, transit improvements, or improved human services.

These kinds of stadium deals are really no different than the television contracts in that it's all about content.  If you have enough content you can make it profitable.

Where it differs is when the municipalities put real money in return for "indirect" or unquantifiable money out.  The indirect money becomes even harder to come by if there is a dearth of content cause that's the only thing that drives that.

It also differs in that the entire tax base is being asked to fund something that will only provide guaranteed benefit to a small group of people. You can choose not to buy a cable contract. You can't choose to not pay taxes.

[akmarq]

merged to previous post.

[GGGG]

Oh I agree that Milwaukee would be better off than Louisville - but I still think it's a terrible idea.

I disagree in your trust in how taxpayers vote to spend the money. I have a good friend who has been to some of the meetings with the mayor and Metro Milwaukee Assoc. of Commerce. The MMAC brought in the same organizer who planned the OKC Thunder move and has basically said that they have the money to swing any referendum the way they want.

My issue is that it it's apparently okay to publicly fianance a luxury good (the arena) but taxpayers won't approve spending for roads, transit improvements, or improved human services.

Well...all I am saying is that they have the right to do so.  If the citizens of a city want to drive to a spanking new arena on crappy streets, that's their decision.

[MU Fan in Connecticut]

The YUM Center was in part built to attract an NBA team.  However, with the Kings moving to Seattle, and a nice arena sitting in Kansas City, I highly doubt that the NBA will be coming to Louisville anytime soon.

This is a debacle where you have politicians with stars in their eyes who signed away the farm because of the "economic benefits" that stadia are supposed to bring.  Hint:  They don't....study after study has proven this.  Yet municipalities of various sorts will shell out millions, if not billions, to build these things.

An arena has been an on-and-off discussion for years in Hartford.  There's a fair amount of people who want an NHL team back.  The state would most likely build a new arena (or substantially rebuild the XL Center like they did in St. Paul, MN) if a team committed to move to Hartford except when possible re-location of current teams comes up none want to consider Hartford because they don't have a new suitable arena.  There's no way the state would shell out millions (nor should they) to build something without a commitment like was done in Kansas City or Louisville.  In the present, the city and Connecticut need to do something to keep the 40+ yr old XL Center viable and when it comes to UConn who knows what will happen?   

[martyconlonontherun]

Is there much difference between Louisville and Milwaukee besides the lack of Pro teams in Kentucky?

How much value does it have when branding a city to have your name on ESPN every night?

That's the economic benefit that is impossible to measure. I'm not saying it is a lot but there has to be some tourism benefit from having these teams. The problem is we'll fight over and over whether its worth it.

[mr.MUskie]

They need to start booking more weddings.

The KFC Yum! Center is also the official home of the University of Louisville men's and women's basketball programs and women's volleyball program. Aside from being a great concert and sporting event venue, the arena also has breathtaking spaces to rent for large or intimate private events varying from weddings to luncheons. For more information on how to schedule an event at the facility.

[mu03eng]

Is there much difference between Louisville and Milwaukee besides the lack of Pro teams in Kentucky?

How much value does it have when branding a city to have your name on ESPN every night?

That's the economic benefit that is impossible to measure. I'm not saying it is a lot but there has to be some tourism benefit from having these teams. The problem is we'll fight over and over whether its worth it.

Not to be flippant but there is a huge difference, Chicago.  If you were to cast a net an hour and a half around each city, Milwaukee would nab Madison, Chicago(Northern suburbs anyway), and Rockford.  Louisville would nab Cincinnati, Lexington and the south side of Indy.

Both Indy and Cinncy have professional sports teams to none for Louisville.  Only Chicago has professional sports teams other than Milwaukee and several of those teams are rivals of Milwaukee teams ensuring dollars from Chicago coming to Milwaukee.  Just a much larger overall market in the Milwaukee area than Louisville.

I guess I'm going to plead ignorant, but I see no way that tourism is driven by being on ESPN.  You could make the argument that hosting NCAA tourny games drives tourism for sure, but just having a team playing on tv on ESPN can't drive much tourism.

[martyconlonontherun]

I guess I'm going to plead ignorant, but I see no way that tourism is driven by being on ESPN.  You could make the argument that hosting NCAA tourny games drives tourism for sure, but just having a team playing on tv on ESPN can't drive much tourism.

Not saying its a ton, but a good portion of every game is fans from outside the metro area. Think of all the Cubs fans that come to Miller Park. I know my family has taken at least 3 trips that involved going from sports town to sports town. Spent a few nights in Baltimore before heading to Boston on one trip. If the O's weren't there, my family wouldn't have spent a weekend in the city.

As for my post, I think it has some kind of psychological impact when thinking about having conferences/tourism in certain cities. That 5 second city skyline view helps people become familiar with the city and hearing the name all the time makes it feel bigger than it really is compared to non-sports cities. Think of all the times announcers bring up something random like this city has great bars or music festivals. Very small advertising plugs for the city.

[Marquette Gyros]

An arena has been an on-and-off discussion for years in Hartford.  There's a fair amount of people who want an NHL team back.  The state would most likely build a new arena (or substantially rebuild the XL Center like they did in St. Paul, MN) if a team committed to move to Hartford except when possible re-location of current teams comes up none want to consider Hartford because they don't have a new suitable arena.

The Xcel Energy Center in St. Paul was a brand-new arena... they knocked down old the Civic Center and then put it up

[MU Fan in Connecticut]

My brother lives out there.  He said they basically cut the top off the existing and build back up.