Sedgwick County to consider $200,000 annual promotional fund for Intrust Bank Arena

Sedgwick County leaders want to sweeten the deal for musical acts considering Intrust Bank Arena – particularly ones that don’t wear boots and cowboy hats.

The county commission next week will consider amending its agreement with SMG, the company that manages the arena, to establish a $200,000 annual promotion fund. According to the proposal, the fund would be used to attract events “that might not otherwise appear (at Intrust) without additional financial inducement on the part of SMG.”

Since it opened in January 2010 with a sold-out concert by country star Brad Paisley, the arena has been criticized for not offering a more diverse musical schedule. Officials also are concerned about a slowdown of bookings in the summer months.

“We try to pay attention to what people are saying, and … there’s a level of dissatisfaction,” County Manager William Buchanan said Friday.

“We hear people complaining about the diversity of performances and the number of performances and the closed, dark months. So we began a conversation” with SMG about strategies to address the problem, Buchanan said.

“This is an attempt to do something about it.”

If the change is approved, arena officials – after consulting with county leaders – could draw from the fund to pay the difference between what a performer might demand and what his or her promoter is willing to pay the entertainer to bring the act to the Wichita arena. The fund would begin in January.

According to the proposed agreement, SMG would provide the first $200,000 a year for the fund. Money expended from the fund would be shown as expenses for those events; if the event makes a profit, the profit would be included in the arena’s net income.

Buchanan also has proposed tweaking the agreement to increase SMG’s potential earnings, though the company still would absorb any losses.

Under the current agreement, SMG keeps the first $450,000 of profit; the next $450,000 goes to the county. After the $900,000 mark, 60 percent of profits go to the county and 40 percent to SMG.

The proposal calls for SMG to keep the first $400,000. Any profit in excess of that would be divided evenly between the county and SMG.

The county also is expected to vote next week on extending SMG’s contract for another six years, through Dec. 31, 2020.

Assistant county manager Ron Holt said attracting premium entertainment and protecting the county against financial losses continue to be leaders’ top priorities with the arena. The new promotion fund, which the county could replenish as necessary from a $13 million capital reserve fund, could potentially draw more acts and raise the arena’s stature in the region.

“We’re just looking at a tool,” Holt said. “We don’t know if there’s any silver bullet, but it’s a tool that will help.”

Break from country

Arena general manager A.J. Boleski said he’s familiar with complaints that the arena seems stuck on the country dial. But country is what continues to sell in this market.

“We’ve talked about if from Day One: Why does country (music) happen so much? Because it’s always successful,” Boleski said.

“People say, ‘We want a big pop show,’ and the first thing a promoter says is, ‘What’s the history in the market?’ The history in this market is Hilary Duff in 2004 at the Kansas Coliseum. So that’s not a lot of history to make those decisions on.”

More recent history includes disappointing turnouts for some non-country performers. A John Mayer concert last December drew fewer than 7,000 people, less than half the arena’s 15,000-seat capacity.

Boleski said arenas elsewhere in the country have used promotion funds to help entice big acts by lowering promoters’ upfront risk.

The Times Union Center in Albany, N.Y., also managed by SMG, hosted Paul McCartney this summer. The Dunkin’ Donuts Center in Providence, R.I., used its fund to attract hip-hop artist Usher in 2011. The Pensacola Bay Center in Pensacola, Fla., landed Elton John’s tour in March.

Boleski said he thinks Intrust Bank Arena could entice an additional one to three acts a year with the added incentives, depending on tour schedules and the multitude of other factors that play into an arena’s lineup.

“It’s not a sure thing,” he said. “It doesn’t necessarily mean this or that show is going to happen. But it’s another carrot, another tool that we could use to try and help make it happen.”

Buchanan said county leaders would see how money from the promotion fund is used. But because the arena doesn’t report event-specific financial information to the public, citing competitive and proprietary concerns, taxpayers will not. As with many privately managed arenas, the county’s contract with SMG contains a confidentiality agreement.

Holt said he and other top county officials review monthly reports with SMG. But “we are not the experts,” he said.

“We’re not going to say, ‘Do this one, and we don’t care what it costs,’ ” Holt said. “We’re not going to be driving that. They will be coming to us, and we’ll have that discussion.”

According to the proposed amendment, proposals to use the fund “must receive prior approval by the County’s Contract Administrator, which approval will not be unreasonably withheld.”

Athletic events

In addition to country, basketball also sells well at the arena.

A Wichita State University-Tennessee game last December brought in the highest attendance of any single event at the arena last year. The Shockers are scheduled to play Saint Louis University on Dec. 6 at the arena.

Holt said he hopes added incentives could help attract NCAA Tournament games someday – or persuade other sporting events to return.

After taking a loss on its state wrestling championship in 2010, officials with the Kansas State High School Activities Association said the Class 6A and 5A tournaments would not return to the arena because it was too expensive. The group moved the event to Hartman Arena in Park City and has held it there ever since.

“We were about $15,000 short … so they took their act and went on the road,” Holt says of the state wrestling tournament. The proposed fund could have made a difference in those negotiations, he said.

Vera Bothner, an audience research consultant for the arena, said the county plans to hold “listening sessions” in coming months to gauge people’s thoughts about the arena and help clarify expectations.

Despite criticisms, last year the arena drew 11 of the top 100 tours in North America, including Taylor Swift and the Eagles. This year and next will bring more hot tickets – George Strait, Cher, Lady Antebellum and Fleetwood Mac.

“Part of all this is: How are we, as a community, responding to the opportunity to go see live shows?” Bothner said. “There’s these big dreams, and then there’s the realistic situation of our marketplace.”

This story was originally published October 17, 2014 at 9:07 PM with the headline "Sedgwick County to consider $200,000 annual promotional fund for Intrust Bank Arena."