Michael Marion: Verizon Arena to Show Loss for 2011

Attracting the entertainment industry to North Little Rock’s Verizon Arena is bumpy work, especially during a recession. That difficulty has been echoed in the financial performance of the arena.

In 2008, when the economic downturn began, the arena posted a small loss, about $28,000, on revenue of $6.3 million. 2009 was a bit better, with higher revenue of $6.6 million and $21,000 on the bottom line.

Click here for a sidebar breaking down the venue’s specific financial details.

Things turned sour again in 2010, however. Revenue decreased to $5.9 million and the arena suffered a loss of $277,000.

The arena’s 2011 financial report won’t be released until late April, but General Manager Michael Marion warned Arkansas Business that it will not be pretty.

"We expect to show a pretty big loss for last year," he said. "We’ve got a reserve fund, about $1.4 million, that we have for a rainy day. Let’s just say we definitely got our umbrellas out last year."

The difficulty comes from an unpredictable industry, Marion said.

"We have no control over our inventory," he said. "In the last half of the year, there weren’t that many artists touring. Last year started out strong with Jason Aldean, James Taylor and Bob Seger, but then it slowed down. We normally have a slowdown in summer, but the fall didn’t pick up like we expected it to. We’ve had up years and down years. Last year was a down year."

He said difficulties were felt not just in Arkansas, but all over.

"Last year we talked to some of our building friends in Houston and Birmingham, markets like us, some markets bigger than us – everyone was struggling," he said. "There was an industrywide slowdown last year."

He said many artists and musicians, when they see times are tough, will cut down their touring time – 30 days in a year instead of 60, for example. The Verizon Arena often falls off the list.

"We’re not in that first 30," Marion said.

Marion is much more optimistic about 2012, noting that the level of activity has already increased. Last week, the arena hosted Jimmy Buffett for a sold-out, 15,000-ticket show. Marion said he’s excited about other shows this year like Tom Petty, Miranda Lambert and the Red Hot Chili Peppers.

Click here for a list of shows planned at the arena for 2012.

Economic Impact

City and county leaders agree that, even in rough years, the arena is an important part of local economies.

North Little Rock Mayor Pat Hays said his city benefits directly from taxes and sale of electricity.

"Indirectly, it’s a gold mine, as far as I’m concerned," he said. "It’s a gold mine because of people introduced to North Little Rock for the first time because of attendance at the arena."

New people spend money at downtown shops and hotels, Hays said, and if not there, then in the surrounding cities.

"When you throw in Dickey-Stephens Park, and continue to the emerging downtown area, and the remainder of the city including the shopping areas out to the McCain Mall area, it puts the spotlight on what kind of community we are," Hays said.

Pulaski County Judge Buddy Villines was an early proponent of the arena and remains committed to its performance.

"We’re the envy of many of the arenas," he said. "If you put it on a per-capita basis in the marketing area we’re in, we’re like second in the nation."

Terry Hartwick, president and CEO of the North Little Rock Chamber of Commerce, said he had tried to garner interest for an arena back in the 1980s. The city needed it, he said, noting that traveling shows would frequently bypass Memphis for Dallas. When it finally opened in the fall of 1999, the arena started catching those shows before they got all the way to Texas. He acknowledged that recent years haven’t been kind to the facility, though.

"You used to have something two or three times a week," he said. "Last year was a down year, even the hotels and restaurants saw it to some extent."

The arena has created a large number of jobs, he noted, especially temporary work.

"It’s an economic engine," he said.

"When we came here almost 15 years ago, there was a certain expectation," said Marion at the arena. "I’d like to think those expectations have been filled. We’ve seen development of downtown Little Rock, downtown North Little Rock. We were certainly a catalyst for a lot of things – Dickey-Stephens came, the [Clinton Presidential Library] came, and there was a synergy for the whole area that we were part of. People can make plans, they can eat somewhere close by, they can come to a show. It’s a very nice thing."