Going Downtown: Inside the Deal

On the afternoon of August 11, 2011, the Evansville IceMen and the City of Evansville finally came to the successful end of a lengthy and very public negotiation over the team’s prospective lease for the new downtown arena. On August 12, the agreed-upon contract was signed by both sides and officially approved by the Evansville Redevelopment Commission via unanimous vote.

While we all eagerly await the home opener – which will be November 5th against those EVIIIL Fort Wayne Komets – we have some time to digest the terms of the deal. The 38-page contract is full of legal mumbo-jumbo and boring details about insurance and accounting and things of that nature, but there are quite a few points of interest for the common IceMen fan.

So without further delay, let’s drop the proverbial puck on our exclusive IceMenManiacs.com summary of the deal between the IceMen and the City of Evansville…

Before we begin, please note that this analysis is an independent effort of IceMenManiacs.com and is NOT at the request of or on behalf of the Evansville IceMen organization. The IceMen organization is not contractually permitted to openly discuss the details of the arena lease, but the contract is a matter of public record and is readily available for anyone to read. We at IceMenManiacs.com are offering this breakdown as a service to IceMen fans, from a fan’s perspective. Analysis is not intended to be viewed as a legal interpretation of the contract, nor is it endorsed by the Evansville IceMen hockey franchise.

THE BASICS

• The lease is for 5 years, through the conclusion of the 2015-2016 season. The original deal officially expires 30 days after the end of the 2015-2016 league season. After the initial 5 years, the agreement can be renewed on an annual basis, either “as is” or with mutually agreed-upon adjustments. Neither party is required to renew or even negotiate renewal when the time comes. The IceMen can submit a renewal proposal until November 30, 2015, and the City will then have 30 days to respond.

• Renegotiating the original 5-year deal is not necessarily off-limits, but if the IceMen initiate renegotiation of the terms within the first 2 years of the deal, the team will be responsible for all of the City’s expenses, including legal fees, incurred due to the request.

• The IceMen have the rights to the facility (currently known as “Evansville Arena” in the lease) for all pre-season and regular season home games, as well as any home playoff games as required by the league. (The lease specifically mentions that the team must play a minimum of 33 regular season home games, unless the league’s scheduling policy changes to require a lower standard.) The team can also opt to use the arena for hosting the league all-star game and/or an NHL exhibition game. In addition, the team can use the arena for up to 4 special events such as fan appreciation events, charitable events, marketing events and media events, subject to availability and with prior approval by the arena.

• Both parties acknowledge that most practices will be held at Swonder Ice Arena. However, based on availability, the IceMen can use the arena for practice on non-game days for a rate of $250 per hour. (That’s in the same ballpark as Swonder’s rate.) Non-game day practices can be nixed at the arena’s discretion if for the purpose of scheduling another event. Also, the team will be charged for any conversion costs required for non-game day practice setup – i.e., if the basketball floor is down for Tuesday and Thursday games and the IceMen want to use the ice on Wednesday for a practice, the team must cover all costs associated with converting the facility from basketball to hockey and then back to basketball.

• On game day, the building will be opened to the public approximately 1 hour before the game. The arena will make every attempt to have the visitor locker rooms available by 10 AM, the ice surface is to be made available for warm-ups at least 2 hours before game time, and the team is to be allowed to use the facility for up to 2 hours after the completion of the game, subject to arena scheduling needs. Also, when the ice surface is already set up and there are no scheduling conflicts, both teams will be granted access to the ice for game-day practice (the traditional “morning skate”) at no additional charge.

• The team is not permitted to play any home games – including pre-season and playoffs – at any Evansville-area location other than the arena, unless the arena is not available. Thus, we’ll never have a pre-season game at Swonder unless the arena is booked for an entire week or two during the requested time period.

• The IceMen enjoy exclusivity as the arena’s hockey tenant (for the duration of the contract) as long as they remain at the “Double-A” level or higher, meaning another professional or junior hockey team (including both the USHL and NAHL) can NOT use the arena as its home facility. Local high school and youth hockey is permitted, of course.

• The IceMen also enjoy exclusivity as the arena’s only professional team (in ANY sport) through the end of the 2012-2013 hockey season. (Thus, arena football or indoor soccer or NBDL hoops will not be coming downtown until at least the summer of 2013.) The contract does stipulate that roller derby is an exception, although I don’t believe either of the local roller derby teams draws well enough to host a bout at the arena, save possibly the occasional special event.

• It is worth noting that the IceMen deal is actually with the City of Evansville (officially the “owner” of the arena), NOT with VenuWorks (the “manager” of the arena). The University of Evansville’s contract is also with the City; VenuWorks will handle all other contracts, such as concerts and touring shows.

THE FINANCIALS

• The team will pay $10,400 for each regular season and playoff game, as well as any team-hosted all-star game, should Evansville be awarded one. This figure is for the first season (2011-2012) of the deal; each subsequent season, the rate will increase by the inflation percentage of the Consumer Price Index or by 2.5%, whichever is smaller.

• The team will pay $3,000 for each pre-season game, also to increase each season based on the CPI or by 2.5%. Also, as pre-season games are deemed optional, any changeover costs required due to the arena’s schedule will be covered by the IceMen, not to exceed $1,500 per game.

• Should the IceMen decide to host an NHL exhibition game, the team will pay $8,500 to the arena to host the event, again subject to the annual CPI increase. Minor league markets do occasionally host neutral-site NHL pre-season games, although it is fairly rare. Still, such provisions are not unusual for minor league arena contracts.

• The contract does not stipulate that the arena or City shall receive any share of the revenue generated by the vast majority of ticket sales. The arena will receive a decent portion of revenue for up to 341 “Suite” seats and up to 95 “Loge” seats (specific lower-bowl seats as outlined in the lease), with the IceMen paid $20 per “Suite” seat and $15 per “Loge” seat and the arena keeping the rest. For all other seats in the arena, the IceMen will be entitled to 100% of the ticket’s face value.

• Depending on the method of acquisition, tickets may be subject to additional fees beyond the face value – for example, ticketing or “convenience” fees as outlined by Ticketmaster, facility fees as outlined by the arena and City, and local taxes. All such fees shall be clearly separated from the ticket’s face value.

• The facility fee is to be limited to $2 per ticket (in addition to face value), with all proceeds the sole property of the arena. There is an exception, as the IceMen will receive $1 (50%) of the facility fee (if it is applied) for season tickets and group tickets that are sold prior to game day. (“Group” is defined as 10 or more tickets, and the group can be a for-profit or non-profit entity.)

• The arena will control all food and beverage concessions, and the IceMen will not receive any share with the exception of a percentage of alcohol sales. The percentage of alcohol revenue given to the team will depend on the game’s actual “butts in the seats” attendance, NOT the “tickets distributed” total. (Also, fans in “Suite” and “Loge” seats are not included, as alcohol sales in those sections are not eligible for revenue sharing.) For each game, the IceMen will receive 10% of alcohol revenue if attendance tops 3500, 7.5% if attendance is between 3000 and 3499, 5% if the crowd is 2500-2999, and 2.5% if the turnstyle count is 2001-2499. The team will not receive any share of alcohol sales if attendance is 2000 or less.

• The IceMen are responsible for all merchandise and souvenir development and sales, and the team receives 100% of the revenue, minus applicable taxes. The arena does not get a piece of that pie.

WHO DOES WHAT

• Neither party (the IceMen or the arena) is permitted to distribute tickets in excess of the arena’s seating capacity. (Thus, “standing room only” won’t be an option for sellouts.)

• The IceMen are not permitted to issue more than 1000 “comp” or “trade” tickets for any single game without the arena’s approval.

• The IceMen must set aside 20 complimentary tickets for the arena and City for each game. The tickets must be in sets of 4, with at least 16 of the 20 located “between the blue lines.”

• The arena must provide a curtaining system (for blocking off the upper bowl) when requested by the team for games that are not expected to draw crowds large enough to warrant opening the upper bowl.

• The arena will provide 1 primary ice resurfacing machine (not necessarily “Zamboni” brand) and 1 backup ice resurfacer, as well as trained staff to operate the machine(s) throughout each game. In general, the arena will be responsible for all ice preparation, cleaning and maintenance, as well as set-up of goal nets and dasherboards.

• Arena-provided game-day staff will include ticket sellers, ticket takers, ushers, doormen, EMTs for patron care, security guards and police detail.

• The arena must provide on-site parking for at least 25 personal vehicles (for IceMen players and team personnel) and 1 team bus (for the visitors). If fewer than 25 vehicle spots are offered, the city must secure the “shortfall” spots in another nearby parking facility and cover all costs associated therein.

• The arena must designate 4 locations within the building for the team to use as game-day merchandise/souvenir outlets. Within these 4 locations, the arena must allow the team a “reasonable amount of space” for non-profit entities to set up tables for “various purposes,” not to include the sale of concessions. (On behalf of the Booster Club, I hope “concessions” in this sense refers to food and drink, and does not prohibit the sale of cowbells!) The arena also must provide an area up to 96 square feet in size for the team to use for storing merchandise between games.

• The arena will retain fairly significant control over scoreboard advertising. The arena gets to control and sell (and keep all revenue from) 10 minutes of scoreboard promotion time during every game. The arena also gets 10% of all other scoreboard and ribbon board advertising. In addition, the arena is entitled to 2 other promotions (30 seconds each) at each game for upcoming arena events.

• The arena reserves the right to grant exclusive advertising and sponsorship rights (within the given industry) to the business that acquires the building’s naming rights. (Thus, if Old National Bank secures the rights to name the building Old National Arena, the IceMen won’t be able to sell sponsorship to Fifth Third Bank or any other ONB competitors.) The arena also reserves the right to do the same for “pouring rights” for beer and/or soft drinks. (So if Anheuser-Busch and Coca-Cola become the arena’s exclusive beverage suppliers, the IceMen can’t sell sponsorships to Miller and Pepsi.)

SCHEDULING

• The lease specifically states that the IceMen acknowledge that scheduling priority will be given to the University of Evansville basketball teams, both Men and Women.

• Prior to each season (specifically by June 1), the arena and the team will consult each other to develop a list of 40 available dates between October and March, inclusive. The list of 40 must include at least 26 weekend dates (Friday, Saturday, or Sunday). By June 15, the team must “lock in” 35 of the dates, with the arena then being allowed to book the 5 “released” dates. The team then must use the 35 dates to schedule its 33 regular season home games, as well as up to 2 pre-season games.

• The arena must “make reasonable efforts” to keep “a reasonable selection” of dates available for playoff games each spring, as long as the team is in contention for post-season play. However, there is no specific language calling for available playoff dates to include weekends.

• If a game is cancelled due to weather conditions or “other acts of God,” the team must pay a cancellation fee of $8,500. However, if the game is re-scheduled, the cancellation fee can then be re-applied to that game’s rent.

• If a game is cancelled for any other reason and the team provides written notice at least 30 days prior to the game (60 days for a Friday or Saturday game), the team must pay the $8,500 cancellation fee but can then apply it to rent if the game is re-scheduled. However, if the required written notice is NOT provided, the $8,500 fee remains but can NOT be applied to a re-scheduled game.

• The arena is allowed to hold other events on IceMen game days, provided the other events “do not unreasonably interfere” with the IceMen games.

…and that’s about it – 33 bullet points, which is fitting given the number of home games we’ll have during the regular season. It’s a lot of information to process, but a far cry from the 38 pages of details that make up the official contract. Hopefully the highlights paint the picture for you and answer most questions you might have about the deal. But if 33 bullet points isn’t enough, feel free to take a look at the complete contract (in PDF format) here.

Let the countdown to November 5th begin!

One comment

  1. Gibbie says:

    A couple of follow up points:

    The rent for the first year is being discounted 1,000 per game. At least that’s how I’m reading it (Owner shall allow a 1,000 credit per game).

    I think the Booster Club falls under a team “designee.” The Merchandise stipulation says that the licensee or it’s designee will sell all programs, clothing and novelties. We’re certainly a novelty. :)

    If the arena double books the venue and boots the IceMen (as happened in MS) they pay a hefty penalty. I think that’s a good thing.

    I think the mandate is clear though. We Maniacs have to bring as many people as we can to games to get new fans and get more butts in seats. WOOOOOOOOOOO!

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