The Rampage Deal Others Differ

June 11, 2004
Print
Text Size:
A A
GRAND RAPIDS — At first it looks like a deal way too good to be true. In reality, though, it’s the result of a standard tenant contract at Van Andel Arena.

In the upcoming fiscal year, which begins on July 1, the Grand Rapids Rampage will pay the arena $205 to play all eight of its Arena Football League games there. Arena officials, of course, will bill the team for more than the average $25.62 each home date works out to be, based on an annual charge of $205.

In fact, the Rampage front office can expect a tab of $9,314 for each game, or $74,512 for the home season. The team will pay a rental fee of $8,500 for each game and $814 per game to show instant replays, fans and ads on the building’s video board.

But the rental fee gets chopped because the arena has $74,307 worth of “service income” attached to the team’s game next season. And the service income is subtracted from the franchise’s total bill of $74,512, leaving the arena with a difference of $205 for the AFL regular season.

“Service income is actually a loss to the facility, so the $74,307 is a negative number,” said SMG Director of Finance Chris Machuta.

Fees for arena security, ushers and ticket takers largely make up the building’s service income. These charges are usually billed to customers who aren’t tenants, such as concert promoters, but are waived for tenants and are paid for by the building.

“The way the Griffins and the Rampage leases are set up is they pay a rent fee and then we pay all the expenses outside of that,” said Machuta, whose firm manages the arena and DeVos Place.

The more the Rampage draws, however, the more the building receives. The lease was amended a year ago and the new version has the Rampage paying the arena an additional $10,000 in rent for every weekend home game in February and March that lures over 8,000 paying customers.

Van Andel also gets 20 percent of concession and catering sales for those games when attendance tops the 8,000 mark. If attendance doesn’t hit that mark, the building doesn’t receive anything from those sales.

Had the revised contract been in place for the 2003 season, the arena would have netted another $33,000 in the last fiscal year. The building stands to get $13,486 for the Rampage games during the current fiscal year that ends on June 30.

“Obviously, it’s a break-even for us. (The Rampage) is an important community asset that we have,” said Steven Heacock, a member of the Convention and Arena Authority, of the team’s ability to bring people downtown.

“We don’t want to drop below break-even and subsidize this,” he added.

SMG general manager Rich MacKeigan said the way the five-year lease between the CAA and the Rampage is structured, the board can’t lose money from hosting the games.

The Grand Rapids Griffins, the NCAA Hockey Quarterfinals, the high school basketball tourney and almost every family show, like the Ringling Bros. and Barnum & Bailey circus, also have service income written in their contracts. Over the next fiscal year, the arena will lose $679,429 in service income from these events.

“It really depends on the show and the deal. There are some deals where they may pay more rent and we pay all the expenses,” said Machuta. “There are other shows that pay less rent, but reimburse us for all the expenses.”           

Recent Articles by David Czurak

Editor's Picks

Comments powered by Disqus