Millions Lost To City In Arena Signage Deal

Do you want to know what happens when our elected officials do not read agreements? Perhaps you will understand Councillor Dilkens' concern re the hybrid bus deal. Perhaps you will understand better my concern about the Tunnel deal and the lack of information about it. Just read on and weep.

If I am correct, it appears that the Spitfires' owners have done even better on their Arena transaction with the City than I realized at that time I did my original analysis of the deal. There is absolutely no excuse for the City allowing this to happen since they run arenas including the Barn and should understand what revenues can be obtained from sports venues. Alternatively, they should have retained an expert to help them out!

I am certain that you saw this story in the Star but you may not have appreciated its significance:

• "Sign firms collaborate to win work
  
  Collaborating on the building and installation of more than 100 illuminated advertising signs at the new Windsor Family Credit Union Centre has enabled a pair of local firms to win a five-year contract from the Windsor Spitfires...
  
  The signs will be used throughout the main spectator bowl, in the three community rinks and throughout the public concourse areas."

No, the issue is not should this have gone out tender since after all it is City owned property. I will let other sign companies worry about that.

The issue is how much more money is the City giving up in revenues to the Spitfires as a result of the Arena agreement.

I remember Jan Wilson being quoted and saying:

• "Wilson, who didn't know what the WFCU operating costs would be, said the WFCU Centre will make an annual profit of $300,000 to $400,000."

What if I told you that under the terms of the agreement, notwithstanding everything else that I Blogged about before, the Spitfires could make as much or more in arena signage revenue alone than the City would make as an annual profit on the entire complex!

I expect that by the time the revenues for those hundred or more signs are added up, the Spitfires will make hundreds of thousands of dollars on the transactions per year. Over the 20 year life of the deal, if, for example, three hundred thousand dollars is made per year, $6 million not including escalation in rental has been given away by the City to the Spitfires. If the amount is five hundred thousand dollars per year, the total is $10 million.

I wonder if the City in calculating the value of the arena revenues was given rough numbers as to what signage revenues would bring in. If so, how can this be explained away!

Now that is real negotiating isn't it!

Here are the terms of the Agreement that are applicable:

The City does get some revenues, $25,000 per year, but I expect that a good part of that will have to be paid out for the electricity used for many of the backlit signs!

Just to give you some examples of what the Arena in London charges, here is part of their advertising rates. I'm using London because their manager is the same one used in Windsor, Global Spectrum. Whether they are involved in the signage or not here, I do not know:

• 2' x 30' Arena backlit sign---$17,500 (plus artwork and installation)


• Pressbox naming rights---$42,500


• Level Entry sign---$9,000


• 2’ x 15’ In Arena Backlit Fascia Sign---$9,000


• 4' x 8' backlit sign---$8,000


• 6" x 20" street sign---$8,500


• 29" x 54" Vomitory backlit sign---$17,000


• 6' x 6' backlit sign--- $5,500


• 10' x 10' in ice logo---$10,500


• Scoreclock bottom sign---$5,500


• Scoreclock side panel---$16,000


• Rinkboard/dasher board---$9,500


• 106 restroom stall door backs--- $10,500


• Restroom dispensersand advertising frames ---$8,000

Depending on the number of signs, locations and sizes, it would not be very difficult to run up a considerable amount of money per year for the entire East End Facility. All of it, not just the main arena where the Spits play.

I don't know about you, but this Spitfires deal just opens up more questions for me about everything to do with the whole Arena transaction from start to finish especially because of the so-called confidentiality clause that does not exist. I wonder if someone on Council will have the guts to demand a full and proper audit of the entire process from start to finish.

Don't hold your breath with the 400 Building Audit fiasco as a precedent and with Councillors who can say without shame:

• "City council approved the agreement with the Spits in the fall of 2006, but councillors themselves were not shown copies of the deal. Council endorsed it based on an administration report that was then taken away following in-camera discussions.
  
  "I couldn't tell you what's in there," said Ward 5 Coun. Percy Hatfield, one of several councillors who will be seeing details of the multimillion-dollar deal for the first time this week.
  
  "I look forward to seeing it," said Ward 1 Coun. Drew Dilkens. "We had a discussion (on the arena deal) many moons ago ... but I don't recall that discussion."

I would love to get that Administration Report!