Saturday, November 2, 2019

Oshkosh arena says it lost $6 million in first 9 months of 2019 as court is asked to OK change of vendors

Arena lawyers say the facility is moving to exit bankruptcy and attain profitability.
By Miles Maguire
New court filings that provide a previously unreported degree of detail about operations at the Menominee Nation Arena show that its owner lost $6.36 million during the first nine months of 2019, with its single largest expense listed as $4 million in interest.

The arena owner, Fox Valley Pro Basketball Inc., filed for Chapter 11 bankruptcy protection in August and has previously disclosed its outstanding liabilities, which are now approaching $30 million. But the recent filings provide new insights about how much money the arena has earned and where its funds have been going.

As of Sept. 30, the arena owner had negative equity of $5.1 million.

But the situation “is not as bleak as the numbers appear on their face,” said Jerome R. Kerkman, who is representing the arena in the bankruptcy case. In addition to the high cost of interest, Kerkman noted that the arena recognized more than $1 million in depreciation and paid $140,000 in professional fees during the first nine months of 2019.

“The loss on an operating basis is more like a million dollars,” he said.

Fox Valley is moving to become more profitable by changing some suppliers and lining up additional performers and sponsorships for the arena, Kerkman said.

Total income for the first nine months came to just under $2 million, with the largest contributors listed as sponsorships, at $875,911, and food and beverage sales, at $673,010. The sponsorship income includes both the naming rights deal with the Menominee Indian Tribe of Wisconsin and the advertisements that appear on the facility’s interior walls.

In addition to operating the arena, Fox Valley owns the Wisconsin Glo, a team that plays in the Global Women’s Basketball Association. The team provided a bright spot for the struggling arena company by winning the 2019 league championship on Aug. 11.

But the team also cost about $190,000 to set up and operate, including $97,565 in direct wages. The accounting records do not show how much revenue was attributed to the Glo or whether the team was profitable.

Since entering Chapter 11 the arena lost $287,000 through Sept. 30, the papers show. In addition the arena owner has made several payments, totaling about $1,700, to family members of Greg Pierce, the president and principal owner of Fox Valley.

One step the company would like to take is firing PMI Entertainment Group and replacing it with Ticketmaster to handle advance sales. “Ticketmaster is the largest market for online ticket sales,” Fox Valley said in an Oct. 31 court filing.

“Ticketmaster can provide better marketing for the events at the arena and is able to offer lower fees for similar services,” the company said. It noted that PMI manages the Resch Center and Meyer Theatre, Brown County venues that compete with the Oshkosh arena.

A company that is in bankruptcy can ask the court’s permission to break contracts that would otherwise be binding. Fox Valley made several such requests in papers filed Oct. 31.

Another contract that Fox Valley has asked the court to dissolve is a deal with country singer Rodney Atkins. Atkins had been scheduled to perform last month, but ticket sales were slow. The concert was first postponed but has now been canceled.

The original deal called for Atkins to get a $50,000 guarantee for a one-night performance as well as 85% of the gross box office receipts over $96,830.

In seeking to fix its finances, apparently no detail is too small for Fox Valley. Another contract it wants to drop is for toilet tissue and hand towels in the arena’s restrooms. The deal, with a division of Kimberly-Clark, includes a monthly service fee of $1,060.

“We are basically doing the things we need to do to exit Chapter 11 and become profitable,” Kerkman said.

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