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The sports, entertainment and convention industries have become over-built as more and more American cities have constructed arenas, stadiums, convention centers and auditoriums. In short, there are not enough events to fill all of the facilities. For event promoters, sports franchise owners, and convention planners, contracting for the use of public assembly facilities has become a buyers' market. As a result, citizens pay twice for their colossal new facility: once to construct it, and again, with tax dollars, to subsidize its operation. As a response to this situation, many cities and universities have turned to private management companies for solutions. In many cases, these companies have been able to reduce operating expenses simply by being able to operate outside of the public sector, avoiding such things as politics, civil service hiring requirements, or costly public pension plans that municipalities and public universities are obliged to observe. Management companies typically increase facility revenues by bringing a more experienced and knowledgeable perspective to bear on such things as advertising sales, suite leases, ticketing arrangements, and tenant user contracts. In spite of these successes, the clients of these management companies have many common complaints. Foremost among these complaints is the question, "What am I getting for my money?" Most management contracts are cost-plus-fee arrangements, that require the client to pay a fee to the company and reimburse the company for all on-site personnel expenses. Clients who rarely see management company personnel in their facilities begin to wonder what service is being delivered for the fee. After all, the client is also paying for the local facility staff. A management company must be willing to commit resources to support and enhance the capabilities of the local facility staff. Only then is the client going to receive real service for the management fees paid. Clients frequently have almost no contact with one another, leaving them to wonder how their situation compares to that of other clients of the same company. Furthermore, clients often have little or no influence on management company planning, and all too often are disappointed to see their facilities subject to the same cycles of declining bookings and escalating deficits that other facilities, without management company contracts, are suffering. Ultimately, it comes down to a question of focus. As large management companies open NBA arenas, produce Broadway plays, or negotiate for professional sports franchises, the smaller market venues can become lost in the shuffle. Smaller market venues have unique and specific challenges that metropolitan facility executives cannot appreciate. And these challenges are going to become even more difficult, and will require even more professional attention, in the 21st century.
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Made by PC Technology in cooperation with Compass Facility
Management.
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Ancient Rome boasted three stadiums with capacities in excess of 100,000.
These enormous venues took decades to construct, and served the Roman citizens
for generations. Even today, the ruins of those great structures are still
recognizable. Contrast that with modern America, in which stadiums barely
thirty years old are being demolished in favor of new facilities. Just as
ancient city-states competed in battle, modern American cities battle for sports
fanchises, major conventions, and tourist dollars.