Naming Rights Deal Next for Covelli Centre Manager
YOUNGSTOWN, Ohio -- The executive director of the Covelli Centre expects to finalize a new naming rights agreement soon, having just announced that hockey will remain at the arena for another year.
The Covelli Centre announced late Thursday that the Youngstown Phantoms would play the 013-2014 season there (READ STORY), the same day the city Board of Control approved a five-year extension of the management agreement for the city-owned Covelli Centre with executive director Eric Ryan and his company, JAC Management Group.
“We’ve had a great relationship with Covelli Enterprises,” the Warren-based franchisee of Panera Bread and O’Charley’s restaurants, Ryan said.. “We want to continue that.” The one-year extension of the existing naming rights that had been approved last year, as the city considered whether to sell or lease the arena, expired May 31.
“We think [Covelli Enterprises owner/operator] Sam Covelli has done a great job there,” said David Bozanich, city finance director. “He’s contributed a lot to the facility and we’re pretty happy with the relationship we have with Covelli Enterprises.”
Ryan’s and JAC’s contract extension with the city begins Jan. 1, 2014, and runs through Dec. 31, 2018. The agreement calls for an automatic five-year renewal beginning Jan. 1, 2019 unless either the city or JAC provides written notice by Sept. 1, 2018, of their intent not to renew the agreement.
Under the agreement, the city will pay JAC a $99,200 per year management fee. It also provides incentives of 12% for the first year, 14% of the second year and 15% for years 3-5 for annual net operating income of more than $100,000.
“It certainly gives us some stability that we didn’t have in the past,” Ryan said. While the agreement doesn’t provide for any increase in the base payment to Ryan and JAC, he said, it does offer increased incentives “so it really makes us want to work harder obviously to get as much money back to the city as possible.”
When Ryan and JAC took over management of the arena from Global Entertainment Corp., the operation was bleeding red ink. It reported an operational profit of $60,248 for the first quarter of 2013 and ended 2012 with an operating profit of $320,787.
“Obviously financially we need to keep improving and doing the best we can to get as much money back to the city of Youngstown as possible,” Ryan said. “We want to continue to bring the shows in that the people respond to. We’ve been very fortunate with a tremendous amount of sellouts in the last few years and we want to continue that objective and really just continue to improve the operations.”
The agreement also provides stability to suite holders and users of the arena, as well as those booking acts there, Bozanich said. He anticipates the city will save an additional $150,000 to $200,000 under the agreement, which reduces the fee structure for SMG, the management firm that JAC partners with on the arena.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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