giorgiovarlaro

May 16, 2011

Global Entertainment fails again

Filed under: Sports — Giorgio Varlaro @ 9:16 pm

Supplied via Google Images

Within the last decade, professional sports franchises have complained for the need of state-of-the-art facilities to bridge the gap in their growing deficits. The incorporation more seats, better sight lines, and more amenities would seem to attract more fans, however attendance is still down for most sports franchises.

Taking advantage of the boom in state-of-the-art sports facilities has been Global Entertainment. Global Entertainment has persuaded nine cities (Youngstown, Ohio, Hidalgo Tex., Wenatchee, Wash., etc) to invest in new facilities, guaranteeing increases in financial projections. However, Global Entertainment has not been able to establish the correct business plan to create a flourishing business in each of the nine cities a facility was built.

Recently, Global Entertainment was taken to court in Rio Rancho, New Mexico because of its inability to pay the bills at the Santa Ana Star Center. The city fired the company and sued to recoup hundreds of thousands of dollars. Since that time, Rio Rancho has had to use money from their state budget to keep the arena afloat. New management has helped, but Rio Rancho is still suffering from their decision to build a state-of-the-art facility.

The arena consumes nearly seven percent of the city’s $53.8 million budget, thus workers have been furloughed, spending on parks has been curtailed and a reserve fund has been drawn down. An additional $550,000 was asked for by management at the Santa Ana Star Center due to increasing operational costs. Whether the arena will get that needed money is still in question.

What the future holds for Rio Rancho and the Santa Ana Star Center is uncertain. However, more situations like these are popping up with more professional sports franchises not being able to create a profit. Two prominent sports franchises, the New York Mets and Los Angeles Dodgers, are facing the same situation as Rio Rancho because new state-of-the-art facilities are not creating a revenue surplus like projected. It has caused a decreased brand image and created uncertainty within the sports world.

Web site: http://www.nytimes.com/2011/05/17/sports/a-companys-small-town-arenas-leave-cities-with-big-problems.html?ref=sports

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