After 14 years of operations, the city may finally see some profit from the city-owned arena after AEG made a surprise presentation about their first year of running Gila River Arena.
“We are proud to announce that we are giving back to the city for the 2016-17 year the amount of $1,621,508,” said AEG Facilities Gila River General Manager Dale Adams during the Aug. 15 workshop. “So, this $1.6 million is opposed to the (projected) $500,000 and we hope it means success and we look to make the arena even more successful and this can be a positive return in the future.”
AEG was named the new arena manager in July 2016 and has added 24 non-hockey events, along with the 50 (44 Coyotes, 4 ASU, and two Tucson Roadrunner) hockey games.
Based in Los Angeles, Calif., AEG owns, operates, or consults with more than 120 venues worldwide, including Staples Center in Los Angeles. AEG developed L.A. Live, the sports and entertainment district adjacent to Staples Center, Microsoft Theater and the Los Angeles Convention Center. They also run The O2, a 28-acre development in London that includes a 20,000-seat arena.
Mayor Jerry Weiers was quick to point to the success from AEG.
“I am pretty confident in our decision (to hire AEG) and believe our citizens will agree that partnering with (AEG) has shown improvements and we are headed in the right direction,” Weiers said.
Councilmembers added that the success was more than a surprise and showed that the decision to change arena managers was a success after the first year.
“Thank you for taking a building that is owned by the citizens and bringing back a positive investment,” Ocotillo District Councilmember Jamie Aldama said.
Yucca District Councilmember Joyce Clark, whose district the arena resides, also showered praise on AEG.
“This is the first good news about our arena in many years and I am impressed with the return on investment and convinced it will grow over time and feels good for a change,” Clark said.
After having only owners of the National Hockey League team that played in the arena managing the facility since its opening in 2003, AEG Facilities LLC took over operations of Gila River Arena July 1, 2016.
“We actually began before that by securing a Coldplay concert for the arena,” said Chuck Steedman, AEG Facilities chief operating officer. “Now, we are in the process of bringing more events and different types of events to Glendale because this area sells tickets.”
Steedman pointed to a number of successes in AEG’s first year of operations, including having the highest average paid tickets per show in the history of the arena; second-highest total gross tickets revenue in the past seven years; first time hosting the Arena Football League Championship Game (Aug. 26, 2016), and a number of first-time shows, including the Professional Bull Riders, and rehearsed and opening tour dates for Zac Brown, Queen with Adam Lambert, and Kendrick Lamar.
“We also brought in the Kellogg’s Tour of Gymnastic Champions, two comedy shows (Amy Schumer and Gabriel Iglesias), which were very successful,” Steedman said. “We continue to search for more and different types of shows to bring to Gila River Arena because we believe this is one of the best arenas.”
Steedman and Adams announced they have a number of events in the process of scheduling dates, which they said will be announced soon, along with trying to get new events.
“We have the first scheduled WWE Smackdown Live! event (which) will be live from the Arena on Sept. 26 and tickets are selling quickly,” Adams said. “We are also exploring the possibility of boxing and MMA events, PBR is excited to return and other one-off events that are excited to schedule events because this area sells tickets.”
Over the past three previous years, with IceArizona managing the arena and the city paying $36.5 million in management fees over that time, the city still lost $22 million from the arena. In the first year with AEG, the city had projected profiting $1,046,744 with the city to receive half in the profit-sharing plan ($523,372). Actual bottom line ended at $3,243,016, which is why the city received a payment of $1,621,508.
“You started flat footed and there was not much going on there when you took over and now it looks like we are ahead of any performance by the previous management team,” Barrel District Councilmember Bart Turner said. “That is good for Westgate business and our citizens because it is their arena.”
AEG increased non-hockey events at the arena in its first year, with 41 non-hockey events held at Gila River Arena from 2014 to 2016 and AEG holding 24 events since July 1, 2016 and another 23 scheduled through June 2018.
Steedman continued to praise the arena with a strong future and continued growth opportunities still in progress.
“We believe this can be a destination for everyone and we can grow the business,” Steedman said. “I say this all the time that this is LA Live on steroids and I am excited for the future.”