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MLSE bows out of management contract with GMC
Tue Apr 01, 2008
Durham Region News
By: By Jillian Follert
OSHAWA — In the face of mounting criticism from council and the City, Maple Leaf Sports and Entertainment (MLSE) has asked the City to release it from its management contract for the General Motors Centre.
The company spoke to council about it at a closed-door meeting Monday afternoon and politicians gave the OK, pending due diligence from City staff and council approval of new terms and conditions.
“We decided after two years at it, that this is no longer a strategic focus for us,” said Bob Hunter, MLSE’s executive vice president of venues and entertainment, in an interview Tuesday.
Mr. Hunter said MLSE’s management contract in Oshawa is unique, because it is the company’s only contract for a venue where it does not have a sports team as a tenant.
They had originally planned to pursue other similar contracts, but shifted gears last year.
Mr. Hunter doesn’t think it makes sense to hang on to the arrangement in Oshawa, saying it is in the City’s best interest to bring in a company that specializes in this type of management.
“I’m disappointed it didn’t work out, but things change in business,” he said.
Facility management firm Global Spectrum will be brought on board to replace MLSE.
The request to reassign the management agreement will undergo a due diligence process and negotiations with MLSE and Global Spectrum. The final terms and conditions will be brought to council for approval, with a goal of switching operators by June 1.
All employees at the arena will retain their jobs, and MLSE will continue bookings and other business between now and then.
Global Spectrum Facility Management is based in London, Ont. with its headquarters at the 10,000 seat John Labatt Centre.
The company manages that arena along with the Abbotsford Sports and Entertainment Centre, En Cana Centre and South Okanagan Event Centre, all in British Columbia.
The Canadian arm is part of a larger overall company that includes U.S.-based Global Spectrum and parent company Comcast Spectacor, which also owns the Philadelphia Flyers NHL team and Philadelphia 76ers NBA team.
In its five years in London, Global Spectrum Facility Management has attracted lots of big name acts like the Who, the Dixie Chicks, Bob Dylan, Cher, Avril Lavigne, the Tragically Hip and Billy Joel to the John Labatt Centre.
When Elton John played there in November 2006, the venue sold out in five minutes.
Oshawa politicians are hopeful the same kind of success can be achieved at the GMC — especially after a year and a half of sluggish programming and financial losses on MLSE’s watch.
“Global Spectrum has a great track record and this gives us the opportunity to change things in a seamless fashion,” said Mayor John Gray. “If MLSE’s heart isn’t in it, why keep them on?”
While council is generally on board with the new direction, Councillor John Neal has suggested the City sue MLSE to recoup financial losses. Coun. Neal also argues that the new contract should be put out to a public tender process, to make sure the City gets the best possible operator this time around.
“Global Spectrum was one of the ones that put in a proposal to manage the GMC in the first place, and for whatever reason, we didn’t give it to them,” he said. “I think we should follow the City’s procedural bylaw and do a tender.”
The mayor said it doesn’t make sense in this case, because the facility could be left without management for some time.
The GMC opened its doors in November 2006, with MLSE promising plenty of programming and estimating a profit of about $95,000 in year one.
Things got rocky in October 2007, when company officials met privately with council and revealed the GMC was poised to lose $529,000 that year.
While MLSE eventually surpassed the number of projected event days for 2007, councillors felt the number and quality of non-hockey events was concerning, saying trade shows, private rentals, movie shoots and kid’s events made up too much of the list.
Events already booked into the GMC will not be affected by what the mayor calls “an invisible transition” as far as marketing of events is concerned.
It was announced today that shock rock institution Alice Cooper is bringing his act to the General Motors Centre on Oct. 8. Tickets are $50 and go on sale April 4 through TicketMaster.
