The numbers behind the Bulls-Sears Centre deal
A five-year agreement — with extensions that could last through 2036 — approved Wednesday between the Chicago Bulls and the Hoffman Estates' Sears Centre details how the two entities will handle revenues from rent, concessions, parking, ticket sales and sponsorships from the new D-League team planned for the facility.
Village officials said it might take a few years for the team to really take off, but they don't expect to lose money — and they see potential for large profits over the next 20 years.
According to the 83-page agreement, the Bulls will pay Hoffman Estates a minimum rent of $5,000 per home game for the first five years, though that number will increase with attendance, up to $7,500 per game if all 4,500 seats are sold. In each five-year extension, the base rent increases $500. The team plans to play 24 home games per season at the Sears Centre, but that number could increase as more teams join the D-League.
The Bulls will retain ticket revenue, but the Sears Centre will collect a $1 facility fee on every ticket.
“We're not going to be losing money,” said Hoffman Estates Mayor Bill McLeod. “I wouldn't say it's going to be a huge moneymaker right away, but the Bulls brand at the building is going to help a lot.”
Sears Centre GM Ben Gibbs couldn't put a price on how much it will cost the village to put on each game because of all the variables involved, such as whether there is ice on the floor before a game, but he said the rent and facility fees will cover the village's costs even if few people attend a game. A sellout could bring in $12,000 before parking or concession revenue.
Gibbs said the first few years will be about building interest, but he expects to bring in larger profits by year three.
“This is a long-term deal, and if they do well it will pay heavy dividends for us,” he said. “Sponsorships will be the real 'X' factor. If we fill the building, it could be incredibly lucrative. Sponsorships and suite sales alone could validate this deal.”
Gibbs said the deal is similar to what has been worked out with other tenants.
Other terms include:
• The Bulls and the Sears Centre will split concessions revenues on a sliding scale, with the village getting 60 percent of concessions if season attendance is 50,000 and up to 80 percent if its higher.
• Hoffman Estates will provide the parking staff and split fees with the Bulls 50-50.
• The village, along with current sponsors Sears, Pepsi and Comcast, can request a certain number of free tickets and parking passes per game.
• Hoffman Estates will spend up to $30,000 on marketing for the team between now and the end of the 2016-17 season and $10,000 more each year until 2021.
• The village will provide the team with at least 1,820 square feet of free office space.
• The Sears Centre will collect ticket revenue and will deduct rent and fees before remitting money to the Bulls.
“It's a good deal,” McLeod said. “We will bring in more revenue. We will bring people the Bulls experience at a lower price and we will draw more attention to the Sears Centre. It's a win for everyone.”