Full financial details of Intrust Bank Arena are not public
As a taxpayer who helped pay for Intrust Bank Arena, you might want to know how much the downtown venue made on the Taylor Swift or Elton John-Billy Joel concerts.
You're out of luck.
The arena, like others nationwide, doesn't report event-specific financial information to the public. SMG, the private company that manages the arena, says it doesn't share all of its financial information because of competitive and proprietary concerns.
The lack of complete transparency is a byproduct of electing to have the arena privately managed and making SMG responsible for any operating losses. The Kansas Coliseum's financials were an open book. But the operation of the Coliseum also was subsidized by taxpayer dollars.
At Intrust Bank Arena, it's SMG that's on the hook if the venue loses money.
That's why, SMG and Sedgwick County officials say, the public gets to see fewer numbers, although an independent annual audit will be public and give more details. The county's contract with SMG contains a confidentiality agreement.
"Because Sedgwick County has no financial risk from SMG's operation of the facility, the county's information requirement is focused on operational performance: how many events were hosted, how many citizens attended, how did the operator provide benefit to citizens or community organizations in other ways," said assistant county manager Ron Holt.
"The county has no need to know the detailed cost information or responsibility for SMG's actions or decisions," he said.
Commissioner Kelly Parks disagrees.
"I have always been disturbed that we weren't able to have the openness that I would have liked to have seen from the start on that,'' said Parks, who voted against the contract for SMG. "It's a government-owned building. It should be open record. Bottom line, that's it."
Monthly reports for Oklahoma City's Ford Center, also managed by SMG, are more detailed than the reports that the public, via the county, gets for Intrust Bank Arena.
For example, how much the arena was paid for rent for events was not reported to Sedgwick County commissioners last week, although the county later shared such information with The Eagle in a report it provided Thursday. Rental income is regularly reported in the Ford Center report, as are detailed breakdowns of expenses.
"The contracts are different," SMG's regional general manager Gary Desjardins said of the Ford Center and Intrust Bank Arena. "The models are different."
Desjardins also is general manager of the Ford Center.
SMG's contract for Intrust Bank Arena is rare. There are only two venues SMG manages, including Intrust Bank Arena, where it has agreed to be responsible for losses. The other is Verizon Wireless Arena in Manchester, N.H.
Sedgwick County officials get a look at the financials that SMG turns in each month to its home office. County Manager William Buchanan, Holt and chief financial officer Chris Chronis review those monthly.
Holt told The Eagle last month that they are not allowed to take notes during those sessions. But Buchanan said last week that the county chooses not to take notes because the "intent and spirit" of the county's contract with SMG is based on "business- needed confidentiality. To take notes violates that intent and spirit."
Holt said Thursday that "my take is that notes are subject to open records (laws), so if we're not getting the records, why take notes?"
Arena financial reports
The Eagle filed an open-records request recently for the arena's monthly written report stipulated in the county's contract.
The contract said the report would include "a balance sheet, income statement and other financial reports (such as a departmental expense report and event accounting)."
Holt responded that the county had not received and "consequently does not have the balance sheet, income statements and other financial reports you have requested."
Since then, the county has provided further information to The Eagle, including a balance sheet and an income statement that provides more detail about operating expenses.
In April, Holt began giving county commissioners a monthly report on the arena. The first was for January and February combined.
The report listed events for those months, how many tickets were sold and totals for gross building income and building operating expenses. Expenses were not broken out.
Last week, Holt shared with commissioners a report for March. It showed net building income, or profit, of $973,878 for the arena's first three months.
On Thursday, the county provided more information to The Eagle, including rental income and a more detailed breakdown of expenses. It showed net income, or profit, of $975,345.
Rental income through March 31 was $557,034, records show. Total direct event income was $293,380.
The sale of food and beverages, which is how arenas make most of their money, to regular seatholders brought in $588,617 during that time period, and concessions in premium seating brought in $132,953.
The arena's take on the sale of T-shirts and other souvenirs brought in $80,354 for total ancillary income of $801,924 for the first three months, according to the report provided to The Eagle.
The report provided to The Eagle also broke out premium seating income and box office income, information that had been categorized previously only as "other net income." The arena earned $219,499 from premium seating and $662,121 from the box office.
Total event income for the first three months was more than $1.9 million.
The county also provided a balance sheet for the arena.
The Eagle also requested and obtained the monthly report ending March 31 for the Ford Center.
It is 32 pages long and includes rental income — something not on the report Sedgwick County commissioners were given last week — and details about expenses down to the amount of money spent on lightbulbs for the month.
Some commissioners say they are satisfied with the information they are getting from SMG.
"I still think that we have a unique and very advantageous agreement with SMG," commissioner Dave Unruh said. "I don't think it's appropriate for us to be involved in micromanaging the arena."
Some commissioners would like more information. Chairman Karl Peterjohn, who helped lead a campaign against the sales tax that paid for the arena, said he would like to see specific event information instead of categories such as concerts and family shows.
Commissioner Gwen Welshimer said she would like to know how much money each event made.
"I think we all took a step back because it appears the arena is operating well," Welshimer said.
She voted against the county's contract with SMG because she didn't want SMG to operate the Kansas Coliseum. It no longer does.
The county has closed Britt Brown Arena at the Coliseum complex and has agreed to keep the pavilions open through at least next year.
Transparency issues
In Oklahoma City, SMG sends monthly reports about the Ford Center to Tom Anderson, executive manager for special projects for the city, and other officials.
As Holt is for Sedgwick County, Anderson is the arena contract administrator for Oklahoma City.
"They're pretty substantial reports," Anderson said of the Ford Center and Cox Convention Center reports. Cox Convention Center also is managed by SMG.
"The only thing that might be sensitive is the proprietary nature of any single promoter's event."
So, as in Wichita, event information is broken down by category, such as concerts, sporting events and family shows instead of by specific performer or game.
John Wong, interim director of the Hugo Wall School of Urban and Public Affairs at Wichita State University, said it's common for privately operated public facilities to pose some problems for transparency.
The county has agreed to help SMG protect its interests, he said.
"They're bidding for acts, and they don't want their competitors to know what they're bidding," he said.
On the other hand, Wong said, "obviously the county has accountability to the taxpayers, and they're going to have to defend the secrecy."
"There are no easy answers. If it's public, it's public. If it's private, it's private. Now you've got something that's halfway in between.
"In any project like that, you're potentially going to be contending with" transparency issues.
This story was originally published May 16, 2010 at 12:00 AM with the headline "Full financial details of Intrust Bank Arena are not public."