Pinnacle Arena On Track

The study reportedly told arena officials what they already knew: the city diverted too much money toward paying off the arena’s considerable construction debt – nearly $1 billion, counting interest – and too little toward operating the arena.

The West Haymarket  in Fresno, Calif., and Chaifetz Arena in St. Louis, and that an arena makes most of its money off concerts and food and beverage sales, with concert touring seasonal and food sales competing with numerous bars and restaurants near the arena.

The consultant also credited SMG with managing the venue well and cutting costs wherever possible – cutting its staff from 43 initially to 35 now – but said the company was off in its projections. In the first year, concessions revenue was 11 percent below projections, catering 20 percent below and food and beverage sales nearly 66 percent below.

The report blamed the thriftiness of the community, the many competing restaurants near the arena and lower concession prices at the old basketball venue. The Watchdog said University of Nebraska-Lincoln officials may consider changing the policy on alcohol sales during Husker games to boost profits. The report said the current trend is to allow alcohol in premium seats and beer in general public areas.

Mayor Beutler said the report shows the arena’s performance overall is positive.

“The big picture is very positive, with more than enough funds for SMG to operate the arena, to pay the JPA operating costs and to pay the bond debt,” Beutler told the website. “Revenue from occupation taxes is much higher than projected at this point, and the arena operation itself continues to generate revenue far above its operating expenses.”