The operating grant for St. John's Sports and Entertainment (SJSE) has shrunk in recent years - but that city subsidy also accounts for a growing proportion of the corporation's annual revenue.
This year, the city operating grant is expected to account for 31 per cent of SJSE's budgeted revenue from events at Mile One and the convention centre.
Last year, it accounted for 24 per cent of revenues identified in SJSE's audited financial statements.
And in 2007, the operating grant was 22 per cent of revenue. (See chart on page A4 for details).
At the same time, the proportion of SJSE's revenue from entertainment and events has decreased annually, though projections for 2010 suggest that may change.
Entertainment and events accounted for more than half of the corporation's revenue in 2007.
This year, it's expected to account for about one-third of the revenue.
St. John's Sports and Entertainment views the numbers a little differently. It has the benefit of knowing which way this year's revenues are trending - upward, says the corporation.
"We're trending in the right direction," said Gerry Smith, chairman of the SJSE board.
"We'll come in under budget this year."
The corporation will know for certain when its audited financial statements are done in March 2010.
Ticket sales, said Smith, were budgeted to be $3.8 million this year, but are now projected at closer to $5 million.
"We're into December - we know our revenue from ticket sales."
As a result, he expects SJSE will need less of its allotted $1.75-million operating grant.
"We'll come in under that this year, for sure."
Ticket sales also factor prominently in SJSE's plans. They're considered a revenue generator for Mile One, even though it doesn't receive all of that revenue.
"It's certainly part of our economic engine," said Smith. "The more revenue we generate for artists coming in, the more it helps the overall operations."
The city receives a small portion of ticket-sales revenue collected for music acts at the civic centre. SJSE's entertainment revenue comes from rentals, services, food and beverages supplied during those events.
Before 2007, SJSE's audited financial statements included all the revenue from ticket sales as part of its total annual revenue.
Since then, ticket-sales revenue have been excluded from the audited financial statements - making it difficult to compare those fiscal reports with older financial statements.
"That wouldn't be a fair comparison," said Smith.
He calls 2008 a transition year for SJSE - one that saw the arrival of a new board, restructuring of the corporation, efforts to reduce costs, and the loss of the Fog Devils hockey franchise from Mile One.
A year earlier, SJSE's operating grant had reached $2.1 million.
"Our goal was to get the $2.1 million down. Our goal was to get more revenues to the facility ... and the ticket sales are going up - that helps your profit," said Smith.
Ward 1 councillor Danny Breen likes SJSE's less risky economic model and more conservative approach to managing operating expenses.
Breen, who sits on the SJSE board of directors, attended his first meeting last month.
"As long as we work within that model, I think we'll be OK," he said. "They're cutting down on the co-promotes that they do on concerts - they're doing more rentals now. Those are ones that have less risk in terms of how it operates."
This year's budget pegs the Mile One operating grant at $1.75 million and next year's budget is projecting a $1.5-million subsidy.
"We're trending to reduce that. I think we're headed in the right direction."
Breen said similar facilities across the country receive municipal operating subsidies.
"That's the nature of their business. Our goal is to get that subsidy at the lowest level possible."
"As a short-term goal, I'd like to get it down into the $900,000-range where (Memorial) Stadium was in its last year. I think that would be a fair route to go now."
Breen calls Mile One a catalyst for other economic activity, such as restaurant and hotel bookings.
"Your investment there can't be measured solely in the amount of the subsidy."
ST. JOHN'S SPORTS AND ENTERTAINMENT REVENUE
Here's the proportion of revenue that SJSE derives from two sources the city's annual operating grant and the entertainment and events at Mile One and the convention centre.
- Revenue $5.8 million
- Operating grant $1.5 million 26 per cent
- Entertainment/events $2.2 million 37 per cent
- Revenue $5.1 million
- Operating grant $1.75 million 34 per cent
- Entertainment/events $1.6 million 31 per cent
- Revenue $7.8 million
- Operating grant $1.9 million 24 per cent
- Entertainment/events $3.4 million 43 per cent
- Revenue $9.6 million
- Operating grant $2.1 million 22 per cent
- Entertainment/events $5.4 million 56 per cent
Note: Figures for 2009 are budgeted numbers and the financial statements are expected in March 2010. The 2010 numbers are projected. All numbers are rounded.
Source: SJSE annual financial statements, Telegram files