GMC gets clean slate June 30

OSHAWA -- The beleaguered General Motors Centre will be getting a fresh start on June 30, when the management contract for the venue is transferred to a new company.

On Thursday, council gave the green light for Maple Leaf Sports and Entertainment (MLSE) to transfer responsibility to Global Spectrum Facility Management, a company based in London, Ont., with its headquarters at the 10,000-seat John Labatt Centre.

"I think this group has a tremendous background," said Councillor Nester Pidwerbecki. "If the best they can do is break us even I'll be the most thankful guy in Oshawa."

The hope is that Global will pull the GMC out of a slump characterized by sluggish programming and a $300,000 deficit in 2007.

Under the new contract, MLSE will not receive any of its $150,000 management fee for 2008, or its five per cent food and beverage administration fee for the year.

The City will have to swallow the $225,000 deficit MLSE is forecasting for the first half of 2008, however if that number climbs to more than $250,000, MLSE will be required to pay half that additional loss.

Chris Brown, the City's director of finance, said he won't have final numbers until July, but is optimistic there might not be a loss for the first half of the year.

"This could always change, but right now we're not seeing any indication of a deficit," he said, noting Oshawa Generals playoff games brought in extra revenue that helped stabilize the books.

Global Spectrum will be paid a management fee of $130,000 for the balance of 2008 and $240,000 a year going forward, with Consumer Price Index increases added from 2010 until the end of the 18-year term.

The company will be subject to a penalty of 25 per cent of the management fee if it fails to meet its planned earnings for any given year and will be required to submit monthly, quarterly and annual financial reports, as well as an annual business plan.

"We try to exceed expectations wherever we go," said Brian Ohl, regional vice-president and general manager for Global Spectrum.

He said the company has achieved success at its other venues by watching the bottom line, developing strong relationships with promoters, focusing on customer service and thinking outside the box with ideas like targeted mailings and pre-event block parties.

In its five years in London, the company has attracted big-name music acts including the Who, the Dixie Chicks, Bob Dylan, Cher, Avril Lavigne, the Tragically Hip and Billy Joel to the John Labatt Centre.

When Elton John played there in November 2006, the venue sold out in five minutes.

Mr. Ohl assured councillors Global has already started to work on bringing events to the GMC.

"In the next month or so you'll start to see some things happening," he said.

The $45-million GMC opened its doors in November 2006, with MLSE promising plenty of programming and estimating a profit of about $95,000 in year one.

Things got rocky in October 2007, when company officials met privately with council and revealed the arena was poised to lose $529,000 that year. The final 2007 deficit came in at $300,000, which will be amortized over the next three years, translating to a $100,000 increase to the City's budget each year.

In April, MLSE asked the City to release it from its management contract for the GMC, citing a shift in focus.