Verizon Arena Battles Tough Entertainment Market

by George Waldon  on Monday, Jul. 19, 2010 12:00 am  

Long-term suite leases and reserve seating agreements that helped fund the debt-free construction of Verizon Arena are now line items in the facility's annual income statement.

(To view a seating chart of the arena's luxury suites and who leases them, click here.)

Renewing those contracts at the North Little Rock entertainment venue has produced mixed results. The arena recorded total revenue of $6.6 million during 2009, its second-biggest year since opening in 1999.

But that sales performance didn't generate a handsome profit as management invested in capital improvements to keep the project updated and competitive while laboring in a challenging business climate.

"Current economic conditions make it difficult for many sponsors to continue to renew their advertising contracts and suite leases with the arena," the 2009 annual report notes. "A significant decline in advertising/lease revenue or ticket sales could have an adverse impact on the arena's future operating results."

Michael Marion, general manager of Verizon Arena, expects 2010 results will be comparable to 2008, which produced a $27,854 loss.

"I would be shocked if we didn't show a loss this year, but we have money socked away," Marion said of the arena's enviable financial position. "The fall is promising, but I don't think we will end up finishing the year in the black."

The most current numbers compiled for arena operations this year show a            $19,661 loss on revenue of nearly $2.1 million through April 30.

Along with the decline in long-term suite leases is the "Save Your Seat" program, launched with an original count of 980 that has fallen to 411.

That 58 percent drop represents more than $142,000 in lost annual revenue for the arena. The SYS program is priced at $1,250 for a five-year term and reserves a participant first crack to buy an event ticket with a guaranteed seat location.

The precipitous decline accompanied the University of Arkansas at Little Rock Trojans moving its home court from the arena in 2005 to its new on-campus facility, the Jack Stephens Center.

Adding to the lost allure of SYS was the demise of the RiverBlades (2003) hockey franchises followed by the exodus of the RimRockers basketball team.

 

 

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