Sydney Entertainment Centre In Jeopardy

Citing difficult lease terms at the Sydney Entertainment Centre, operator Arena Management has gone into voluntary receivership and the venue is continuing operations with the help of Ticketmaster.

Arena Management executive director Kevin Jacobsen, a well-known Australian entertainment impresario, told Pollstar his company just couldn’t make money under the terms of the lease with the venue’s operating body, the Sydney Harbour Foreshore Authority.

“This is just to bring everything to a head, rather than to continue trading with nowhere to go, just continued losses,” Jacobsen said.

The Foreshore Authority announced the termination of the lease Aug. 6, saying it was due to “Arena’s breach of essential terms of its lease and due to the company being placed under voluntary administration and receivership,” said Authority CEO Robert Domm.

Along with Ticketmaster, the Authority has enlisted the help of the Darling Harbour Convention and Exhibition Pty. Ltd. “to manage the SEC for the foreseeable future,” according to a statement.

“Our key priority is to keep the SEC’s doors open, ensure ticket holders get to see their shows and protect the centre’s position as Australia’s premier entertainment venue,” Domm said, adding that it will be “business as usual” at the arena.

Jacobsen says the nearby Acer Arena, operated by AEG and owned by the same New South Wales Government, has more favorable terms that put it at a competitive advantage, despite already being a younger venue that’s only about 20 miles away.

The lease was signed in October 2008, after Arena Management had operated the 13,000-capacity venue since its 1983 opening. The terms required Arena to hand over 25 percent of all gross earnings from events, including food and beverage and merchandise, or 50 percent “if we were making money,” Jacobsen said.

Other venue operators, including AEG and Live Nation, looked into taking over the lease but there was “an unlikely profitable outcome, due to the fixed cost of rents and conditions imposed by the Sydney Foreshore Authority,” Jacobsen said.

AEG Ogden reportedly came close to taking over but pulled out, claiming there were serious problems with Arena’s finances.

“In short the business is, in our view, a shemozzle,” AEG Ogden chief Harvey Lister told The Australian. Jacobsen contends that AEG pulled out only because it was not granted permission by regulatory authority ACCC to run such a similar venue in close proximity to the SEC.

To keep the company afloat, Jacobsen says he had to sell the other venue the company ran, the Capitol Theatre in Sydney, as well as bring in $1.7 million from another company he owns, Campbell Street Theatre Company. The receivership was instigated by Campbell Street, Jacobsen said.

Jacobsen says his company still owns $3 million worth of working assets at the SEC, including the phones, booking systems and computers.

The Australian press has run amok with the story, reporting rifts with creditors including prominent promoter Michael Coppel, who says he is owed about $1 million for a deal to bring Pink to the SEC for 10 nights.

According to the Sydney Morning Herald, creditors including the Australian Taxation Office are in line for an estimated total of more than $8 million.

Upcoming shows at the SEC are to include Alice Cooper, Liza Minnelli and Keith Urban.