We Could See This One Coming

We count lots of smaller, mid-market arenas as good customers, and have been in the supply business for long enough to see lots of changes in the development of 3000-10,000 seat venues.  While it’s great to have new customers,  it isn’t quite so exciting when you discover that they can’t pay their bills.

An article in yesterday’s New York Times brought to light how overbuilding, overselling and problems in the broader economy have brought some of these arenas to the brink of bankruptcy.  Unfortunately, since most of them are owned by municipalities, simple bankruptcy is not a real option.  The whole town would have to essentially go out of business to do that.  Not really very realistic.

Towns all over America were sold on the idea that building an arena would revitalize their downtowns or allow them to drive development to a new area where they wanted to focus future economic growth.  The companies that took the lead in making these sales have failed to deliver the promised fans in the seats and the money they were supposed to bring with them.

Now they are having to do things like put off  employee raises and leave other bills unpaid to service the debt on their new buildings.  Layoffs probably come next.

Even in good economic times, the demand for tickets to second tier sports teams is limited and there are not enough concert and entertainment acts that can make money in these mid-size performance spaces.

We wish the best for these towns that are now struggling to afford their new palaces but realize that they are not all going to survive.

Anybody want to buy an arena?

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