Greensboro Coliseum Budget Questions & Answers

I was recently reviewing the recommended 2009 – 2010 budget via the City of Greensboro’s Web site and as you might imagine I had a few questions along the way. One section that I’ll highlight is the Greensboro Coliseum’s portion of the budget. The questions below were originally sent to Matt Brown, the director of the coliseum, and the answers were provided to me by Andrew Brown, the coliseums public relations manager.

Q: Under the Administration portion of your budget the dollar amount from 08/09 is $2,352,397 where as the 09/10 figure is $2,555,106. Both numbers are equivalent to 18.5 employees so I was just curious what the increase was for. It appears that you plan to have more events this year so maybe it’s an increase in advertising… but I’m just shooting in the dark.  

A: The increase in the Administration portion is due to several factors but a few of them are:

• The 09/10 recommended budget includes amounts for merit increases which we now know will not occur and should help contribute to offsetting the City’s budget shortfall (My question – Should the budget the city has online not reflect the reduced number given merit increases will not be given?)
• Benefit expenses are up from FY 08/09 based on our projected Workman’s Compensation payment

Q: Your personnel costs also jumped quite a bit for the proposed budget, what is that attributed too? I would assume raises are not being given and it doesn’t appear you are hiring new staff.  

A: Our budget was submitted prior to the City’s Final decision to freeze merit increases, although, as part of the City’s overall plan to reduce the budget shortfall, there will be no merit increases and we will continue to leave some vacancies open as an additional source of savings.

However, due to the overall increase in event activity some current vacancies will be filled, but no new positions will be added.

Q: Admissions and charges are scheduled to be down this year over last year, why is that? Same for the “Other Revenues” category.  

A: The revenues in these categories are lower based on a continuing bad economic year.  Both categories have only decreased slightly.

Q: What could be done to wipe that out the funding that comes from the General Fund? Is a majority of that money used to cover the upkeep at the Auditorium? At this point in time I’m a fan of potentially selling the coliseums naming rights to wipe out this figure – is that something you are or are not in favor of? What kind of value would you put on the naming rights?

A: We have attempted to acquire a naming rights sponsor for the past 15 years. Current economic conditions make naming rights an extremely difficult sell right now. Arenas across the country are losing naming rights sponsors (and expiring agreements are not being renewed).

We feel the role of the Coliseum Complex is to continue to serve as the leading economic generator for this region. Estimates have show the economic impact of our events exceeds $100M annually. While we would love to not have to require a general fund contribution, it is not likely realistic, particularly considering we do not have a naming rights sponsor or a professional sports team as a tenant. Our operating deficit is actually much lower than other arenas that benefit from both of those revenue streams.

What many in the general public fail to realize is that the Coliseum generates approximately $8M in revenue annually. Our approximately $9.8 M in annual expenses include maintaining the facility and operating and soliciting events. No other city department comes close to this type of cost recovery.

Also, please note our budget does not detail the number of free or discounted events that are provided to non-profits or other groups (such as hosting a blood drive) that do not generate revenue.

There is no doubt that the coliseum has a huge economic impact on Greensboro, but I think it’s always good to ask questions. After reading Andrew’s response I did send him two follow up questions:

• When naming rights have been pitched in the past, what price tag has been used?
• Of the $1.8 million that the general fund covers, has the bulk of the maintenance been isolated to a specific building… such as the War Memorial Auditorium? Or you could answer it from this standpoint. If the coliseum and the auditorium operated separately, would the coliseum be profitable?

Without a doubt the coliseum has a huge economic impact on Greensboro, but if there are ways to run it more efficiently and reduce the amount of money it receives from the General Fund I am all for it. It is a venue that is very capable of packing in the crowds and I witnessed that first hand last Friday at the Taylor Swift concert.

Tagged as: Greensboro Budget, Greensboro Coliseum