Another bad deal

Another bad deal

Tonight at Council, a motion was made to award the naming rights to the new Schomberg Recreation Facility at a price well below both budget and market. Steve has extensive experience in this area and addressed Council on this matter. Unfortunately, the motion was carried and a very long term, unprofitable deal has been sealed. This just another example of the poor financial management and decision-making, combined with the lack of effort, which has plagued the Township for many years.

Steve’s comments to Council follow:

Good evening Madam Mayor and Councillors, I want to provide some of my professional experience concerning The Parks, Recreation and Culture Departments report regarding the Naming Rights for the new Schomberg Facility.

I have had the opportunity to be involved in naming rights with my municipal background and wish to share some lessons learned. This is NOT a good deal for the Township!

In my experience we have been consistently been able to acquire $250,000/arena for 10 years only. But you are trying to do a deal for 50 years and for the whole facility. Why?

For a full facility we have received $1 million again for a 10-year term. AND, it was the sponsor’s responsibility for all signage, which equated to an additional $500,000.

The proposal before you for 50 years will end up costing the municipality money …All the signage, directional and surface advertising will cost the Township at least $100, 000 especially if there are any electronics within them.

An EOI Expression of Interest is NOT the most effective manner to secure the best deal for King. The Economic Development Officer and the Mayor should be actively selling this new centre and finding individuals or businesses in King who would be willing to invest.

I have already been able to find a company that would pay more for less.

You have not taken into account other important aspects of a sponsorship deal such as the pouring rights, the vending rights and the cost of operations.

The Township will be responsible for maintenance, repairs and operating cost for all the signs for 50 years. How much will this cost? We are going to end up losing money!!

And as final point, there are no clauses which state that Trisan can’t resell the rights to someone else.

To give you one more perspective on this; the proposed deal is for 50 years for $300,000; that is $6,000 a year. With me I have the 2004 (6 years old) Price listing from a neighbouring municipality and as an example advertising on a Park bench is worth $400/year, back of a bus $1,000/year, a bus shelter $5,000/year, and more importantly, $7,000 a year for board advertising rights in the arenas. This pricing equates to $350,000 for just the boards not the entire facility.

THIS IS A BAD DEAL FOR KING! AND IT LASTS 50 YEARS! NO ONE ENTERS INTO AN AGREEMENT FOR 50 YEARS.

As I stated before this will cost the municipality more than we are getting over 50 years. So if you can’t get the $750,000 as budgeted, keep the naming and advertise KING!

Thank you for the opportunity to address you on this important matter.