KFC Yum! Center Is Nearly $10 Million A Year In The Red

[zls44]

http://insiderlouisville.com/news/2...e-controversy-is-the-white-elephant-downtown/

The numbers are complicated; we’ll delve into them another day. For now, just know Louisville-Jefferson County Metro Government must soon cough up $9.8 million to help the arena make its mortgage for 2012.

That’s just the beginning. If the arena doesn’t start generating more revenue, the city will be billed $9.8 million each and every year until 2018 – at which point the tab could soar to $20 million.

 

[TheRogers]

That's surprising. I thought the beer sales was a significant revenue source given a consistently packed arena. Yikes!

 

[TRest]

"At least half of all sports fans in the Louisville MSA are University of Kentucky loyalists. Unless those folks are goo-goo for Lady Gaga or bonkers for The Boss, the Yum! Center has little chance of luring them in the door.
That goes for IU fans too.
Common sense and absent dollars say the Yum! Center has a seriously flawed business model. It not only ignores thousands of potential customers in its own backyard, but millions who live elsewhere in this state and across the river."

Somebody in the ACC didn't do some vetting.

 

[specialisthusky]

this was painfully obvious when looking at the insane jump in "revenue" ville was claiming. The numbers just never made sense.

 

[UConn990411]

Somebody in the ACC didn't do some vetting.

Do they ever?

Louisville was the type of short-sighted move the ACC pulled off nine years ago when it added BC, Miami, and Virginia Tech. The first two have been epic disasters to say the least, and while VTech has pulled its weight, we're still talking about a relatively small market.

The ACC had a chance to lock up New England and much of the tristate area by taking Rutgers and UConn a year ago. They passed. More recently, the conference had a chance to lock up the two best free agents (Louisville and UConn)...yet chose to take the smaller-market school for its marginally better football/to appease Florida State.

Instead of learning from what the B1G, SEC and Pac-12 have done during realignment (expanding the conference's market base/TV sets), the ACC repeated its mistakes from the past. And there's a 99% chance they get picked apart because of it.

 

[OkaForPrez]

Okay so the Yum is losing $, someone boil this down for me. What does it mean specifically for the Louisville AD and their ledger? Is the state on the hook or is the program liable? How is this an oversight?

 

[OkaForPrez]

Louisville thread regarding deficit

Apparently the operating budget is in the black, but advertising and taxes have under-performed.

I still get the feeling that this has nothing to do with the program's revenues.

 

[upstater]

Okay so the Yum is losing $, someone boil this down for me. What does it mean specifically for the Louisville AD and their ledger? Is the state on the hook or is the program liable? How is this an oversight?

When someone else is picking up the costs (which lead to losses) you get to fatten up your books. But that advantage doesn't last forever. Eventually the city will find a management company, and that company will start retaining some of the revenues, at which point the 100% increases Louisville reported between 2011 and 2012, will disappear.

 

[mattp]

I don't think the Yum Center running in the red is really a UofL problem at all b/c they don't own the facility, they just lease it. It would be like if the Hartford Civic Center was losing money. We wouldn't really care that much, other than how it might impact our next lease. This center was a boondoggle to begin with and it's backstopped by the city so they'll be the ones subsequently screwed. The price tag on this project was absurd, and there's not that much demand in Louisville KY for another concert venue. You'd think from the mistakes in Harrisburg, PA, Allen Park MI, Rhode Island, etc, that cities would learn not to back stop nongovernmental nonsense.

 

[TRest]

I don't think the Yum Center running in the red is really a UofL problem at all b/c they don't own the facility, they just lease it. It would be like if the Hartford Civic Center was losing money. We wouldn't really care that much, other than how it might impact our next lease. This center was a boondoggle to begin with and it's backstopped by the city so they'll be the ones subsequently screwed. The price tag on this project was absurd, and there's not that much demand in Louisville KY for another concert venue. You'd think from the mistakes in Harrisburg, PA, Providence RI and Allen Park MI, etc, that cities would learn not to back stop nongovernmental nonsense.

As the sole tenant right now if the lease was very favorable, that is going to end. UL can always go back to Freedom Hall when the next lease is negotiated, not likely.

 

[Marty Jackson]

Do they ever?

Louisville was the type of short-sighted move the ACC pulled off nine years ago when it added BC, Miami, and Virginia Tech. The first two have been epic disasters to say the least, and while VTech has pulled its weight, we're still talking about a relatively small market.

The ACC had a chance to lock up New England and much of the tristate area by taking Rutgers and UConn a year ago. They passed. More recently, the conference had a chance to lock up the two best free agents (Louisville and UConn)...yet chose to take the smaller-market school for its marginally better football/to appease Florida State.

Instead of learning from what the B1G, SEC and Pac-12 have done during realignment (expanding the conference's market base/TV sets), the ACC repeated its mistakes from the past. And there's a 99% chance they get picked apart because of it.

If there's any solace, the ACC's short-sightedness and Uconn's crap luck lately put's us on a direct path. It's our destiny.

 

[Dann]

everyone knew lville was playing with numbers and hiding and moving things around so they could make a number up that was attractive for media reasons. this is prob only the tip of it, lets wait and see more about he great stadium they have and w/e else. the acc added a community college that grew into a ok city u and has a small but loyal fanbase thats #2 in its state by a longshot. congrats acc.

 

[ctchamps]

everyone knew lville was playing with numbers and hiding and moving things around so they could make a number up that was attractive for media reasons. this is prob only the tip of it, lets wait and see more about he great stadium they have and w/e else. the acc added a community college that grew into a ok city u and has a small but loyal fanbase thats #2 in its state by a longshot. congrats acc.

The ACC knew as well. They didn't go in blind. The fans are one thing but the hirelings weren't fooled. Their motives were not based on the fluff.

 

[MrPibb503]

Some points:

Louisville's revenue was through the roof when they played at Freedom Hall. Check the numbers. They were number one back then and they still are. They've had a seat donation program for years that has netted them millions. Also, 22,000 a game and selling beer makes alot of money.

Yes they got an amazing deal on the new arena and that's part of why the debt service isn't as strong and the city could be partially on the hook, but to suggest it's an indictment on UL is just idiotic. Look at the entire athletics department for 10 plus years. Look how many facilities the Cards have built and the money they pay coaches.The success and investment in an entire athletics department is not some kind of scheme. They didn't trick the ACC.

Cities get screwed on arenas all the time. Part of it to is the indirect benefits associated with a downtown arena are difficult to quantify. Most people support the arena though.

 

[specialisthusky]

Some points:

Louisville's revenue was through the roof when they played at Freedom Hall. Check the numbers. They were number one back then and they still are. They've had a seat donation program for years that has netted them millions. Also, 22,000 a game and selling beer makes alot of money.

Yes they got an amazing deal on the new arena and that's part of why the debt service isn't as strong and the city could be partially on the hook, but to suggest it's an indictment on UL is just idiotic. Look at the entire athletics department for 10 plus years. Look how many facilities the Cards have built and the money they pay coaches.The success and investment in an entire athletics department is not some kind of scheme. They didn't trick the ACC.

Cities get screwed on arenas all the time. Part of it to is the indirect benefits associated with a downtown arena are difficult to quantify. Most people support the arena though.

I am so tired of opposing fans coming over here and discussing how wonderful there finances are. Here's an idea. Prove it. Provide links to any claim you just made.

 

[caw]

Do they ever?

Louisville was the type of short-sighted move the ACC pulled off nine years ago when it added BC, Miami, and Virginia Tech. The first two have been epic disasters to say the least, and while VTech has pulled its weight, we're still talking about a relatively small market.

The ACC had a chance to lock up New England and much of the tristate area by taking Rutgers and UConn a year ago. They passed. More recently, the conference had a chance to lock up the two best free agents (Louisville and UConn)...yet chose to take the smaller-market school for its marginally better football/to appease Florida State.

Instead of learning from what the B1G, SEC and Pac-12 have done during realignment (expanding the conference's market base/TV sets), the ACC repeated its mistakes from the past. And there's a 99% chance they get picked apart because of it.

I disagree completely about VT. VT was a shortsighted move that ended up being a good/decent move. The original three the ACC wanted were Miami, BC and Cuse. Cuse got booted for VT. That was a shortsighted add at UVA's request. VT was duplicated in every market the ACC was in. VT is only big in VA and DC area.

BC and Miami were train wreck additions. Small private schools are not the future. Further, isolating BC up north was an insane decision.

Pitt and Cuse were decent adds, but adds that were completely undone by the B1G taking NJ/NYC with Rutgers and stealing Maryland/DC from them. The ACC could have dominated NYC if it had added four instead of two at that juncture and you know Rutgers/UConn/UL would have joined in a second. You can't go halfway and that's what the ACC tried to do.

UL over UConn was just the icing on the cake of short term decisions. It wasn't the worst move, but it wasn't a good one either.

I know the B1G may not be interested in UConn but leaving UConn as a potential target for the B1G is one of the dumber decisions made by the ACC. If UConn were picked up by the B1G they would take away any advantage the ACC had in NYC and take away any chance the ACC had at getting eyeballs in NE. Any potential ACC network wouldn't get off the ground in NE and cable would have a tough time adding it in NYC just for Cuse.

The only lucky part so far with the ACC, in regards to UConn, is that the B1G can't add UConn without adding someone else and there is no one else they want/can add ATM. However, this is also a huge flaw. It allows the B1G to target one school, instead of two, from the ACC. It doesn't have to convince UVA and GT/UNC/etc. but rather just one. The B1G may not want UConn but you are kidding yourself if you think they wouldn't add UConn to get that ACC team. They know as well as anyone else that if one more ACC team leaves and ND doesn't join then the ACC implodes and UNC becomes free game and UNC is a huge prize for the B1G

 

[MrPibb503]

Why? You're the one with the conspiracy theory that the ACC got tricked or something. Why don't you disprove that Louisville makes a ton of money. You think I'm lying about coaches salaries and some of the best facilities in the country? Look it up yourself.

But I'll oblige you on one of the points. Here's CNN's report from 2010, the season before the Yum Center opened:
http://money.cnn.com/2010/03/18/news/companies/basketball_profits/index.htm

Even if Louisville is inflating some of the numbers, they would still blow most schools out of the water. Not even worth arguing about though. And the other poster compares Louisville to BC. I like UCONN and hope they end up in the ACC, but to compare Louisville to BC or question their investment in athletics is pretty stupid. ACC probably doesn't care about profits as they do investment and expenditures since they don't see the schools profits really. But Louisville will spend as much if not more on its athletics programs than any school in the ACC. Beyond that, what are we really arguing about?

 

[The Funster]

Why? You're the one with the conspiracy theory that the ACC got tricked or something. Why don't you disprove that Louisville makes a **** ton of money. You think I'm lying about coaches salaries and some of the best facilities in the country? Look it up yourself.

But I'll oblige you on one of the points. Here's CNN's report from 2010, the season before the Yum Center opened:
http://money.cnn.com/2010/03/18/news/companies/basketball_profits/index.htm

Even if Louisville is inflating some of the numbers, they would still blow most schools out of the water. Not even worth arguing about though. And the other poster compares Louisville to BC. I like UCONN and hope they end up in the ACC, but to compare Louisville to BC or question their investment in athletics is pretty stupid. ACC probably doesn't care about profits as they do investment and expenditures since they don't see the schools profits really. But Louisville will spend as much if not more on its athletics programs than any school in the ACC. Beyond that, what are we really arguing about?

GET LOST

 

[MrPibb503]

GET LOST

Brilliant and classy post.

I'm not here to troll or anything. I like UCONN and want to see them in the ACC or the Big 10. Just wanted to respond and discuss.

 

[upstater]

Some points:

Louisville's revenue was through the roof when they played at Freedom Hall. Check the numbers. They were number one back then and they still are. They've had a seat donation program for years that has netted them millions. Also, 22,000 a game and selling beer makes alot of money.

Yes they got an amazing deal on the new arena and that's part of why the debt service isn't as strong and the city could be partially on the hook, but to suggest it's an indictment on UL is just idiotic. Look at the entire athletics department for 10 plus years. Look how many facilities the Cards have built and the money they pay coaches.The success and investment in an entire athletics department is not some kind of scheme. They didn't trick the ACC.

Cities get screwed on arenas all the time. Part of it to is the indirect benefits associated with a downtown arena are difficult to quantify. Most people support the arena though.

UConn was ahead. UConn was tops in the BE for a long while.

Unless you're talking about just bball revenue.

If you are, you're comparing apples to oranges because UL dumps a whole lot into bball revenue that Uconn includes as AD revenue. The key is to look at overall AD revenue. And even then there are all sorts of indirect subsidies, so it's hard to tell. But if you look at the USA Today database, UConn was #1 in the BE until last year.

They didn't "trick" the ACC? Uh, you guys are showing over a 100% increase in donations year-over-year. That doesn't happen with any other school in America EVER. You went from $14 million to $28 million.

 

[whaler11]

The arena deal doesn't impact the ACC. Why would they care? It's like MLB caring that the Marlins robbed Miami.

The ACC picked Louisville because that is what Florida State wanted.

Not all that complicated.

 

[upstater]

Why? You're the one with the conspiracy theory that the ACC got tricked or something. Why don't you disprove that Louisville makes a **** ton of money. You think I'm lying about coaches salaries and some of the best facilities in the country? Look it up yourself.

But I'll oblige you on one of the points. Here's CNN's report from 2010, the season before the Yum Center opened:
http://money.cnn.com/2010/03/18/news/companies/basketball_profits/index.htm

Even if Louisville is inflating some of the numbers, they would still blow most schools out of the water. Not even worth arguing about though. And the other poster compares Louisville to BC. I like UCONN and hope they end up in the ACC, but to compare Louisville to BC or question their investment in athletics is pretty stupid. ACC probably doesn't care about profits as they do investment and expenditures since they don't see the schools profits really. But Louisville will spend as much if not more on its athletics programs than any school in the ACC. Beyond that, what are we really arguing about?

That article begins: Here's the breakdown, and then it gives no breakdown. Weird.

Look at this link: http://www2.indystar.com/NCAA_financial_reports/revenue_stat/show

Unfortunately, they got rid of the database past 2004, but it gives you a breakdown. One thing you'll notice is Ville used to include contributions and conference TV revenues under bball. In this way, $10m of its $18m bball budget was contributions and TV revs. Now look at UConn. $0 TV revs and $0 contributions. Those are aggregated instead under the AD. If we were to compare UConn to Ville, we'd need to add apples to apples to come to any conclusions.

Now look here: http://usatoday30.usatoday.com/spor...ollege-athletics-finances-database/54955804/1

It doesn't give a sport by sport breakdown, but it does give a good year over year breakdown. A large part of your increase that took you over the top in terms of sports revs was in contributions year over year. One way schools do this is to take contributions from a capital fundraising campaign and then dump them into sport-by-sport programs rather than using that money for the purpose for which it was intended. UL would not be the first school to do this--it's done regularly at all the biggest schools.

 

[ctchamps]

The arena deal doesn't impact the ACC. Why would they care? It's like MLB caring that the Marlins robbed Miami.

The ACC picked Louisville because that is what Florida State wanted.

Not all that complicated.

My thoughts as well. The question is why?

 

[mattp]

UofL got a great lease deal. I think I saw that they basically pay the overseeing authority $2/ticket. If the YUM center runs a deficit they might get stuck paying more, but as basically their only tenant, what leverage would the YUM center have over UofL? Like someone else said, UofL can always go back to Freedom Hall, but the YUM Center is SOL without UofL. Either way to call a favorable lease deal a scheme is pretty silly.

 

[whaler11]

My thoughts as well. The question is why?

Why did Florida State want Louisville? They seem to care more about football.