Global needs to re-evaluate profit projections for arena

Each time Global Entertainment Corp. fails to meet its profit projections for the Chevrolet Centre in Youngstown, new questions arise about the Arizona-based company's ability to operate and manage the public facility.
We are well aware that the 45 million sports/entertainment arena opened just 14 months ago, but the latest report on how things are going shows that progress is not being made.
Rather than hit the 356,446 profit mark it set for the first three months of the fiscal year that began in October 2006, Global reported to the city it will realize a profit of 144,323 -- 212,123 less than anticipated. That alone would not be cause for concern, but when the 144,323 figure is compared with the 545,469 profit earned from October to December 2005, there is good reason to wonder if Global has lost sight of what works for this region.
Indeed, for the first 12 months of the Chevrolet Centre's operation, Global predicted a profit of 652,264. Instead, it posted a loss for the year.
The one question that comes to mind as the financial statements are analyzed is this: Does Global understand the Mahoning Valley market?
We ask that against the backdrop of the company's being fired by the city of Hidalgo, Texas, last September after one year and 11 months. The Dodge Arena, which opened in October 2003, was the template for the Chevrolet Centre.
Financial commitment
Youngstown Mayor Jay Williams, who inherited the contract with Global from his predecessor, George M. McKelvey, appears to have resolved any concerns he might have had with the current set-up. This is largely due to the fact that the city and Global revised the contract so the company is responsible for absorbing any financial shortfalls at the center. It also will pay the city 600,000 to help cover its 767,000 annual debt service on the 11.5 million Youngstown borrowed to make the project a reality. The rest of the project cost was paid for with federal and state grants.
The mayor is to be commended for his unyielding faith in the future of the center and its value as a revitalization tool for the central business district. In our New Year's Day editorial, we noted that one of the most visible developments in the Mahoning Valley in 2006 was the resurgence of downtown Youngstown -- due, in large part, to the Chevrolet Centre.
We still feel that way, which is why we pay such close attention to the economic well-being of the facility.
Global Entertainment must know that public confidence in it is closely tied to how the center performs financially.
Given its failure to meet its projections, the company may want to lower expectations. After all, the mayor has said he would be satisfied if the facility broke even. That should not be a hard goal to meet.