Whitecaps, Lions payments to BC Place revealed; does food and beverage revenue offset low rent?

Is it a good deal for PavCo? Its annual report doesn’t show food and beverage revenue for BC Place, where Centerplate is the private contractor

It is a question readers often ask me and one that I am on a quest to answer: How much do the Vancouver Whitecaps and BC Lions pay to play at BC Place Stadium?

The owners of the local Major League Soccer and Canadian Football League franchises did not contribute to the $514 million renovation of the stadium. The B.C. Liberal government bungled the naming rights arrangement with Telus, and Paragon Gaming continues to search for backers so it can build a new home for Edgewater Casino on the stadium’s west side.

While the debt remains on taxpayers’ shoulders, the two anchor tenants are also responsible for filling stadium seats.

The BC Pavilion Corp. (PavCo), the public enterprise that operates the stadium, won’t release the dollar values of the Whitecaps and Lions’ rents or even show the formula for how they’re calculated.

It is a trade secret, PavCo claims. To which I say, the teams have a territorial monopoly, and BC Place is the only suitable stadium for their needs in the territory. There is no danger of either team moving elsewhere.

After nearly a year of to and fro with PavCo and complaints to the Information and Privacy Commissioner, I can at least report how much the teams have paid PavCo for various services rendered.

On September 6, 2012, I asked, via Freedom of Information, for a list of all payments, dates and reasons by the teams to PavCo since January 1, 2011. PavCo eventually sent me the lists, but with all the dollar values censored.

Ultimately, PavCo could not justify the overwhelming secrecy to the Information and Privacy Commissioner, and, on August 16, finally blinked. For the 18-month period, PavCo invoiced the Whitecaps for $1,676,088 and the Lions $1,250,172.

Because the payments are listed by date and the clubs often paid several invoices in lump sums, it is not yet possible to deduce the precise rent payments.

But one can get closer.

The Lions’ spreadsheet mentions facility fees several times, but not the word “rent” once. Facility fees are a levy built into the cost of tickets.

Rent is calculated on a percentage of tickets sold – essentially, a royalty.

On December 15, 2011, the Lions paid five invoices totalling $199,382 for DSL and telephones and food and beverage services at game seven, audio/video preproduction at game 10, and West final rent.

It is reasonable to speculate the lions’ share of that payment (pardon the pun) was for West final rent.

A leaked copy of the Lions’ 2007 year-end statements shows the club netted $7.34 million in ticket sales and paid only $160,744 for rent over 10 home games (an average of $16,074 per). That season, the Lions paid nothing on the first $6 million in sales per game, but the royalty formula called for 10% on the next million ($100,000) and 15% on the million after that ($51,646).

Anything over $8 million would have been at a 20% royalty. When they hosted the West final, they were charged $147,239 rent.

There are clues in the Whitecaps’ $200,327 payment on December 13, 2011. That was for “Facility fees due from October 2011 soccer games; Percentage rent due from October 2011 soccer games.”

The Whitecaps hosted four home games in the former dome in October 2011, the first full month of the reopening.

They announced a combined 79,401 attendance, meaning the $2 per ticket facility fee brought in $158,802. That left a difference of $41,525 for percentage rent, an average $10,381 per game.

There were only five mentions in the entire document of percentage rent.

Under the terms of their contracts, PavCo retains all food and beverage revenue, but is it a good deal?

The PavCo annual report doesn’t show food and beverage revenue for BC Place, where Centerplate is the private contractor.

Centerplate is also known as Servomation Inc., and it is the highest-paid operational supplier on PavCo’s annual statement of financial information.

For the year-ended March 31, 2012, PavCo paid Servomation $17.07 million.

The previous year for which the stadium was fully operating was 2009-10, when Servomation received $8.14 million, down from the $8.8 million a year earlier.

The bottom line? PavCo reported losing $9.465 million on BC Place operations last year. •

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