Understanding Revenue Streams and Facility Financing

1
Understanding Revenue Streams and Facility
Financing

• Chapter 7

2
Public Revenue Streams

• Tax abatement
• Grants
• Hard Taxes
• Local income tax
• Real estate
• Personal property
• General sales
• Soft Taxes
• Car rental
• Hotel-motel
• player

• Restaurant
• Sin
• Cigarettes
• Alcohol
• Gambling
• Prostitution
• Taxi

3
Private Funding Sources

• Cash donations
• In-kind contributions
• Naming rights
• Concessionaire exclusivity agreements
• Food serving rights
• Beverage serving rights
• Premium restaurant rights
• Sponsorship packages

• Life insurance packages
• Lease agreements
• Luxury suites
• Premium seating
• Personal seat licenses
• Parking fees
• Advertising rights
• Vendor/contractor equity
• Bequests and trusts
• Real estate gifts

4
10 Common Types of Broadcast Media

• ABC, CBS, NBC, FOX, Westinghouse Broadcasting,
  and Public Broadcasting Service,
• Ultra High Frequency (UHF) Channels,
• Superstations (namely, WGN in Chicago, and WTBS
  in Atlanta),
• Cable Channels (i.e., TNT in Atlanta, and USA
  Network in New York City),
• Sports Channels (i.e., Entertainment and Sports
  Programming Network ESPN, Sportsvision and
  Sports Channels in Chicago, St. Louis, Ohio, and
  Orlando, Prime Network in Houston, Prism in
  Philadelphia, and Sunshine Network in Orlando,
• Independent Producers,
• Local TV Stations (local Very High Frequency
  VHF),
• Cable Franchises,
• Pay-For-View, and
• Local AM and FM Radio.

5
Essentials in Financial Planning

• The mission, goals, and objectives for the
  overall plan
• An analysis of the organizations current
  financial situation
• An analysis of revenue projections versus expense
  projections
• An analysis of capital projections throughout the
  financial period of the plan
• Specific information regarding the intended
  financial state at the end of the time period

6
Mechanisms for Financing Debt

• Bonds
• Full-faith and credit obligations
• Non-guaranteed
• Revenue bonds
• Tax increment bonds
• Certificates of participation
• Taxable bonds
• Asset-backed securitizations
• Special bonding authorities

7
Luxury Seats in Sport Facilities League
suites 2001 Teams Annual Lease
Price MLB 2,286 30 85,000 NBA 2,533 29 1
13,000 NFL 4,294 31 100,000 NHL 2,813 30
77,000 Total 11,926 120 93,750
average price Source Modified from Howard and
Crompton, 2004, 265, 266.   Note NBA/NHL Shared
Arena annual lease price 199,000.
8
Sampling of the Number of Club Seats at Various
Venues and the prices charged by Teams for their
Occupancy   Team Facility Number of Price
Range/year Club Seats Lakers (NBA) Staples
Ctr 4,500 12,995 to 14,995/season TrailBlazers
(NBA) Rose Garden 2,500 7,500 to
11,500/season Nuggets (NBA) Pepsi Ctr 1,854 65
to 100/game Knicks (NBA) Madison
Square 3,000 175 to 1,350/game Coyotes
(NHL) American West 1,651 72/game3,250/season
Bengals (NFL) Paul Brown 7,700 995 to
1,900/season Bucs (NFL) Raymond
James 12,000 950 to 2,500/season Ravens
(NFL) PSINet 3,196 108 to 298/game Indians
(MLB) Jacobs Field 2,064 32/game
1,905/season Rockies (MLB) Coors
Field 4,400 30 to 32/game Rangers
(MLB) Arlington 5,700 2,00 to
3,000/season Source Modified from Howard and
Crompton, 2004, 270
9
PSLs Average Cost by League League Average
Price Range MLB 3,615 14,600 NBA
900 - 5,000 NFL 600 3,350 NHL
750 - 4,000