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Covelli posts $37K loss in 2nd quarter
facility’s best 3rd quarter expected to follow, however
YOUNGSTOWN
Although the Covelli Centre had its worst financial second quarter in four years, facility and city officials expect the facility to have its best third quarter.
The center had a $37,561 operating loss between April and June. Center officials had budgeted a $2,813 operating surplus for the year’s second quarter.
They were expecting a big event during those three months to help the facility hit that modest operating surplus figure, said Eric Ryan, its executive director.
Even with concerts by the Goo Goo Dolls, Tim McGraw, an outdoor blues festival and a double-bill of ZZ Top and Lynyrd Skynyrd, the facility failed to make an operating surplus.
Friday’s sold-out Motley Crue and Poison concert originally was slotted for June, Ryan said.
If that concert had occurred last month, the center likely would have exceeded its projected operating surplus, he said.
Also, the center spent about $15,000 during the year’s second quarter on maintenance projects such as repairs to the ice hockey cooling and equipment systems, and an additional $5,000 for other improvements, Ryan said.
The center had operating surpluses in the second quarter in 2009 and 2010. This is its biggest operating loss for the second quarter since 2007, when it had a $205,215 loss.
Even with a weak second quarter, the center had a $57,526 operating surplus for the first six months of the year. That’s ahead of its projected surplus of $51,973 for the first six months of the year.
The facility’s budget, developed in late 2010, lists an expected $151,686 operating loss for the third quarter.
But the July-to-September quarter, typically the slowest three months of the year at Covelli and other indoor arenas, probably will end with a modest surplus, said Ryan and city Deputy Finance Director Kyle Miasek.
The center’s third-quarter operating losses have ranged from $56,294 last year to $253,998 in 2006.
The reason for the optimism for this year’s third quarter is Friday’s Motley Crue and Poison concert, next Saturday’s Kelly Pavlik fight and the Aug. 27 Barry Manilow concert, Ryan and Miasek said.
About 80 percent of the tickets for the Manilow show featuring the Youngstown Symphony Orchestra are sold, Ryan said.
Though the concerts will be very profitable, there is little else going on at the center during the third quarter, resulting in only a projected small profit for those three months, Ryan said.
But any profit during that three-month period would be a first.
The other third-quarter event, last weekend’s Wing Fest, was the victim of terrible weather — from high temperatures to heavy rainstorms and high winds — and did poorly, Ryan said.
The city also received $47,950 during the second quarter from a 5.5 percent admission tax on tickets sold for events at the center. The city received $48,418 in admission tax during the first three months of the year, a quarter in which the operating surplus was $89,529.
The tax and the center’s operating surplus helps offset some of the $650,000 the city owes this year in interest on $11.9 million it borrowed in 2005 to help fund the center’s construction costs. To date, the city has paid only the interest and nothing toward the $11.9 million it borrowed.
But it will pay $275,000 toward the principal by Sept. 2.
The center also is likely to not meet its fourth-quarter projected operating profit of $154,000, Ryan said. The operating profit likely will be about $50,000, he said.
Overall, the center had projected an operating profit of $80,405 for 2011. The center should do better than that, Ryan said, and finish the year with an operating profit of at least $100,000.
It would be the third-straight year for the center with an operating profit. It had a $153,950 operating profit in 2009 and $110,434 last year. Before that, the center, which opened in October 2005, had operating losses every year.