The Moose Jaw Events Centre — formerly Mosaic Place — experienced a deficit of over $550,000 by the end of this year’s third quarter, although that was nearly $276,000 less than budgeted.
From Jan. 1 to Sept. 30, the sports and entertainment venue had actual revenues of $1,474,446 and actual expenses of $1,891,217.
While this led to an operating loss of $416,771, after including the $5,395 expense for Ticket Rocket gift cards, $134,064 expense in management fees and $4,400 in revenue for client building rentals, the venue finished the third quarter with a net loss of $551,830.
In comparison, building manager OVG360 — formerly Spectra Venue Management Services — had budgeted income at $1,349,946 and expenses at $2,043,708, leading to an expected overall net loss — after adding the management fee of $133,992 — of $827,754.
Therefore, the difference between the budgeted and actual income, expenses and net loss was $124,501, $152,491 and $275,924, respectively.
City administration presented the third-quarter financial report during the Nov. 28 regular city council meeting. Included in the document was financial information about the Events Centre/Multiplex.
Council later unanimously voted to receive and file the report.
Food and beverage sales
From Jan. 1 to Sept. 30, OVG360 generated $754,122 in total concession and catering sales, while the total cost of goods was $254,116. This led to total gross profits of $500,007.
After removing total payroll, total variable expenses, management incentives and management fee, the net profit was $115,089.
These numbers were based on 143 events that attracted 79,812 people during the first nine months of 2022.
City hall’s view
One big factor that led to the lower deficit is the “strong contribution” of $115,089 from the food and beverage services in the building, said finance director Brian Acker. However, he cautioned that big expenses would likely come in the fourth quarter that would eat away at that surplus.
It should be noted that while a $115,089 net profit looks good, the bid from Compass Group that council rejected in favour of the in-house services would have paid 20 per cent on gross sales. This would have been $150,000, or $35,000 more than what Spectra made using the start-up loan of $150,000; it used $100,000 but has not repaid the amount.
Council discussion
If council can secure a new naming rights partner for the Events Centre, then its decision to keep food and beverage services in-house could prove to be the right one based on the report’s financial figures, said Coun. Heather Eby.
“Hopefully, that naming rights partner can come through and we can see things turn around for the Moose Jaw Events Centre in a really strong way in 2023 and beyond,” she added.
Coun. Kim Robinson thought the food and beverage services initiative was already paying off even without a naming rights partner. Moreover, based on the net profit, the “loan” that council gave Spectra to start up the services is “almost a wash at this point,” which was good to see.
“I don’t know that we require a payback … when in reality it was for our own concessions,” he added.
The intention with the loan was that it would lead to a lower subsidy contribution on the city’s part or a reduced subsidy request from OVG360, said Acker. However, if council had not invested that money, then the initiative would likely be seeing a deficit of $115,000.
City manager Jim Puffalt added that OVG360 plans to repay $50,000 as part of a schedule contained within the proposed 2023 budget document.
The next regular council meeting is Monday, Dec. 12.
