- change ups
Arena Has Great First Half
GRAND RAPIDS — Halfway through the fiscal year, revenue to DeVos Place was consistent with the SMG forecast at just under $2 million.
But revenue to Van Andel Arena at the midway mark exceeded the SMG projection by $400,000 and reached $2.7 million.
SMG Director of Finance Chris Machuta said arena revenue was up because the building hosted some hot-selling concerts during the first half, most recently shows from the Trans Siberian Orchestra and the Cheetah Girls. Machuta said higher concession and merchandise sales also contributed to the arena’s first-half success.
“The arena has performed well ahead of expectations,” he said. “While it will be a good second half, we are not anticipating a lot of concerts.”
“Given the events that happened in October, November and December, it has really set us up,” said Rich MacKeigan, SMG general manager and Convention and Arena Authority executive director.
Of the $2.7 million in revenue to the arena, $863,711 came from the 11 concerts held in the first half. Concert revenue represented 57 percent of the building’s revenue, while the shows represented only 19 percent of the total events held there. Each concert was worth an average of $78,520 to the building for the first six months of the fiscal year.
Net revenue from concessions was $663,635 at the halfway mark, $73,000 more than the same period last year — despite hosting two fewer events this year.
Van Andel Arena had a surplus of $990,000 through December, or $332,000 more than last year. SMG projected the building would end the year with a surplus of $1.3 million and Machuta said that figure could rise to $1.4 million by June 30.
The arena’s revenue run really took off during the first 12 days of November when eight events were scheduled, including the two record-setting concerts by Bob Seger and the Silver Bullet Band. For the month, the building showed a surplus of $496,000 from only 13 events.
Concession sales during the Seger shows drew 50 percent more revenue to the building than the average take from all concerts the previous year. Each sale was worth about $8 to the arena, way up from the $5.37 the average concertgoer spent in FY06.
“It would be nice if we could get Bob Seger to be the house band,” said Machuta.
But the arena’s revenue run actually began during the second half of the last fiscal year, as for the 2006 calendar year the building recorded a surplus of $1.9 million. That figure would be a record net-income-above-expenses number if it had occurred during a fiscal year.
“The arena had its best year in 10 years for the calendar year last year,” said Birgit Klohs, chairwoman of the CAA Finance Committee.
And the industry has recognized the arena’s success, again. Recent accolades have come from:
- Billboard Magazine, which ranked the building as the fourth highest grossing arena in its seating capacity category of 10,001 to 15,000.
- Pollstar, which placed the arena at 45th of the Top 100 worldwide venues of all sizes for ticket sales that totaled 206,539.
- Venue Today, which ranked the building as the eighth highest grossing arena of its size.
“The first six months were substantially good for the arena,” said MacKeigan, “and good for the convention center.”
DeVos Place closed the first half with a loss of $356,000 and is on track to lose $865,000 for the fiscal year. Both figures are close to the forecast SMG issued last summer.
“I still think there is potential for a little upside with the public shows. Otherwise, there’s nothing significant either way,” said Machuta.
By public shows, Machuta was referring to events such as Autorama and the bridal show that were held in DeVos Place earlier this month and the Michigan International Auto Show that gets under way there this week. Those events, also known as consumer shows, dominate the third quarter of the building’s fiscal year.
“The highlight of the year for DeVos Place is, right now, all the public shows,” said Klohs.
“With the convention center, the big issue is the public shows,” added MacKeigan. “These shows are a significant portion of our bottom line.”