Who Is Paying For The Financial Losses Of The Evansville Thunderbolts?

Who Is Paying For the Financial Losses of the Evansville Thunderbolts?

The VenuWorks owned and City of Evansville subsidized team that plays hockey inside the Ford Center and known as the Evansville Thunderbolts is having a very bad year when it comes to performance. The win-loss record of the Thunderbolts is now 10 wins and 37 losses and the prospects for making the playoffs is out the window. Quite frankly the Thunderbolts are dead last in the semi-professional league that they play in and are suffering badly at the box office too?

Scott Schoenike is employed by VenuWorks to run the Ford Center and the Evansville Thunderbolts. Mr. Schoenike recently told John Martin of the Courier and Press; “having a hockey team is important to the arena financially, even on nights when few people are there.”  When Mr. Martin asked Mr. Schoenike to provide the Courier and Press with the data related to the Evansville Thunderbolts hockey team expenses and revenues he declined several requests to do so. Mr. Schoenike also said; “those figures are blended with those of major concerts and other events at the arena.”  

We wondered why the financial records of the Evansville Thunderbolts hockey team are blended with concerts, basketball games, and the circus?  Is there no one at the Civic center who is interested in understanding which events are worth doing and which ones are not?  By blending the financial performance of various unrelated events make no sense financially.  By hiding true financial data from any analysis is downright irresponsible. We guarantee this type of activity would never pass muster in the private sector. The decision to obscure the Thunderbolts financial results by agglomeration defies financial logic and makes a good business decision impossible. This bad public policy decision is seemly has been promulgated by the Evansville Redevelopment Commission, Vanderburgh County Building Authority, DMD and Mayor Winnecke.

During a past budget hearing, Mr. Schoenike stood before Evansville City Council and made a couple of statements that raised many eyebrows. Mr. Schoenike clearly stated before the City Council that “VenueWorks aims to break even” and went on to say that their primary interest is “to bring economic development to downtown Evansville”. First off, no for-profit company of any value “aims to break even” or exists to further the civic interest of a city. Perhaps Mr. Schoenike was saying what he thought the City Council wanted to hear or just made a non-thinking remark.

ADDENDUM #6 OF CONTRACT BETWEEN THE CITY AND VENUWORKS

To understand what risk if any that VenueWorks of Evansville LLC may have with respect to the Thunderbolts, one must first examine addendum # 6 of the legal agreement between VenueWorks and the City of Evansville that was quietly funneled through the Evansville Redevelopment Commission. This agreement deals with the operation of Thunderbolts. In addendum #6 where it is clearly stated that: “VenuWorks shall be entitled to utilize facility (Ford Center) staff and resources reasonably necessary in connection with its operation of the SPHL Franchise”. During any such periods in which VenuWorks operates the SPHL Franchise, ALL OPERATING EXPENSES OF THE SPHL FRANCHISE SHALL BE DEEMED AN EXPENSE OF THE FACILITY (Ford Center) AND ALL OPERATING REVENUES OF THE SPHL FRANCHISE SHALL BE DEEMED A REVENUE OF THE FACILITY(Ford Center)”.

AN ANALYSIS OF THIS CONTRACTUAL AGREEMENT 

The above contractual agreement seemly states that the City Of Evansville will be responsible for all of the operating costs when the Thunderbolts uses the Ford Center. This agreement also states that when it comes to the Thunderbolts, VenuWorks of Evansville LLC is not at risk for the financial performance of the Thunderbolts. Under the terms of the addendum #6 to the original agreement, the taxpayers of Evansville could also be saddled with all the losses associated with this SPHL franchise costs. This entire business deal looks like heads VenuWorks win, and tails the taxpayers lose scenario.

AN OVERVIEW ON  WHAT THE EVANSVILLE ICEMEN OWNER PAID TO THE FORD CENTER 

Evansville IceMen owner Ron Geary paid the Ford Center $10,000 for each home game.  They Icemen played 38 home games which generated $380,000 gross income for the Ford Center.  It’s been estimated that the Evansville Iceman generated around $500,000 net profit in concession sales for the City Of Evansville and Venuworks each season. The Icemen also paid the City of Evansville $2.50 for each ticket they sold which added up to several hundred of thousands of dollars for the City Of Evansville coffers.

OTHER OPERATIONAL COSTS  THAT THE ICEMEN WAS RESPONSIBLE FOR

The Evansville Icemen paid their 24 players a weekly stipend of $650. This stipend was paid to the players for 7 months.  The Icemen also provided their out-of-town players with subsidized housing.

The Evansville Icemen was responsible for all their marketing costs. They were responsible for the salaries of the management, coaching, sales, and marketing staff.

The Icemen paid all costs related to travel to away games. Bus rental costs were around $50,000 a season, hotel costs were around $35,000 a season, the player’s stipend for food was around $38.00 a day when they went out of town.

Players workman comp and medical treatment expenses were also the responsibility of the owner of the Icemen.

THUNDERBOLTS ONLY KNOWN PAYMENT TO THE FORD CENTER

Because of the “SHOURD OF SECRECY” the only Thunderbolts payment made to the Ford Center payment that we could track on is the $1,000 they pay for a home game.

POINTS OF CONCERNS

One thing for sure is that someone is responsible for at least $1,365,506 loss at the Ford Center during the last three calendar years. It is also projected that the Ford Center will lose a similar amount of money this year.

The other item that is conveniently ignored by our elected officials is the $127 Million debt taken on by the City of Evansville to build the Ford Center. Who is paying for this bond debt and what is the source of funds?

It is widely known that the Riverboat Fund was supposed to support the capital equipment purchases for the Public Works, City Police, and Fire Departments.  We are now told that Riverboat Funds will now be absorbing most of the $8 Million per year payments on the debt through 2036.

It is disappointing that the Evansville City Council is either lacking the fortitude to do the financial diligence required to understand whether the Evansville Thunderbolts are a worthy investment of public money.

The people of Evansville deserve to know how the Thunderbolts are performing economically and who is covering any losses, and whether or not there is any hope of Evansville Indiana ever having a financially successful hockey team.

Bottom line, it’s time for members of the Evansville City Council to get the necessary information about the Thunderbolts financial performance from either the VenuWork’s, Vanderburgh County Building Authority, Mayor’s office, ERC or the City Controllers office.

If the current City Council members fail to get to the bottom of this issue so a competent informed decision about spending our future tax dollars on hockey in River City then the voters need to make this a major re-election campaign issue.

Finally, we want to thank the well-respected journalist of the Evansville Courier and Press John Martin for beginning to seek answers concerning the financial arrangement between the City Of Evansville and VenuWorks when it comes to the subsidizing the Evansville Thunderbolts.