Hoffman Estates board extends sponsorship, management agreements at Sears Centre
Sponsorship and management agreements for the Sears Centre Arena were extended by the Hoffman Estates village board Monday night, but one trustee complained that the decision was rushed.
Less than an hour after review by the village’s finance committee, the board approved a two-year extension to the existing sponsorship agreement with Front Row Marketing and a three-year extension to the existing arena management agreement with Global Spectrum, both with slightly revised terms.
Trustee Raymond Kincaid was the only person to vote against the two extensions.
“I feel strongly about bringing something to committee on the same night that it comes to the board to vote on and it isn’t very open to the public,” he said, adding that he wished the finance committee would have spent more time looking into what other companies had to offer and presented the findings to everyone, particularly for the sponsorship agreement. “It didn’t need to be done that quickly.”
The Front Row contract started in 2010, shortly after the village assumed ownership of the arena. Between 2010 and 2011, ads and sponsorships increased from about $148,000 to $225,000, sales for premium seating increased from about $361,000 to $613,000, while the trade of goods and services for ads decreased from about $312,000 to $279,000. Front Row changed sales representatives in 2011, resulting in increased sales, which led to its annual commission climbing from about $135,000 to $204,000.
Kincaid said he knows the change in sales representatives helped, but he is not pleased with Front Row’s “very outrageous prices” and their sale of advertisements on a Sears Centre Arena sign that went against the village’s signage rules.
Based on the extension approved Monday, if Front Row does not reach 50 percent of the forecast amount of cumulative sales by August 31, 2013, the village has the power to end the agreement early.
Assistant village manager for development Mark Koplin said the termination clause and two-year extension “keeps Front Row on a fairly short leash to hold their feet to the fire for performance.”
As for the management agreement, Global Spectrum enticed the village with $15,000 in annual savings on management fees for a three-year extension over a two-year extension. The village went with the deal.
Front Row Marketing and Global Spectrum are both subsidiaries of Comcast Spectacor, but the agreements are completely separate.
Kincaid asked if offering only one-year extensions was ever discussed and who was included in conversations about the agreements. Koplin said he along with Sears Centre general manager Ben Gibbs, the mayor, corporation counsel and the finance committee chairman were involved in the conversations and that they did not discuss one-year extensions.
“A one-year extension didn’t seem to be beneficial,” Koplin said about Front Row Marketing. “We want to keep them motivated for a longer term to keep the revenue coming in to the Sears Centre.”
Gibbs said having a contract that is longer than one year gives the sales representatives more time to get good sponsorships and shows that the arena is committed to them.
Kincaid also asked if there were some “big shows” coming up at the Arena. Hosts from the TV show “MythBusters” and country singer Alan Jackson are two well-known names that will be coming to the Sears Centre in the coming months, but Gibbs said Global Spectrum is focusing on what’s going to be profitable.
“We’ve really shifted out focus to professional events, not so much on shows,” Gibbs said, noting that the arena will have its biggest catering order ever during an upcoming Advocate Health Care event. “It’s events like this that have gotten us to our bottom line.”
Kincaid said he’d still like to see the building used more frequently and that soliciting local events like more graduations or college and high school sporting events could be beneficial.