Abbotsford Heat, City can't agree on supply fee amount
There is a $92,000 discrepancy between what the Abbotsford Heat hockey club and the City of Abbotsford feel is needed to close the finances on the 2010/11 season.
The Heat’s investor group is claiming a season ending shortfall of $1,397,530, an amount they believe is owed by the city under the supply fee agreement that guarantees the squad break-even revenue of $5.7 million.
However, the city numbers peg the shortfall at $1,305,511.
According to the report, which goes before council on Monday, the two different figures “relates to differing opinions between the city and the Heat as to the classification of a few revenue and expense items.”
City manager Frank Pizzuto said he would not discuss the details of the discrepancy but that there was “a mechanism in place to deal with the dispute.”
Lane Sweeting, a member of the investors group which runs the Heat, said the discrepancy has to do with a difference of opinion between the city and the hockey team as to what constitutes a deductible commission.
“When we determine what revenue is, the contract allows us to deduct commissions,” he said. “There’s all sorts of different commissions paid out. So we’re just trying to determine what is a third-party commission versus a non-third-party commission. And we should have that resolved this week.
“That’s why we’ve been waiting so long (to release the budget numbers) – we’ve been discussing it back and forth, whether it’s an allowable deduction or not.”
Regardless which figure is finally accepted, it doesn’t change the fact that the club lost almost three times as much in its second year ($1,305,511), compared to last season’s deficit of $450,637.
“The fact is we are just not selling enough tickets,” said Pizzuto.
According to figures released by the city on Friday, the Heat generated $1,716,753 in ticket sales compared to last season’s total of $2,402,273.
The decline in tickets sales also contributed to a decline in food revenue. This season the club earned $387,254 in food and beverages, compared to last year’s figure of $538,828.
The team also took a loss ($19,740) on its merchandise sales as it failed to sell enough to recoup costs.
The question remains, how does the local club attract more paying customers?
Pizzuto feels the new management team may help.
“They have a good head start in that with the hiring of Ryan Walter ... I think the organization has really turned a corner and is heading in the right direction.”
2010/11 Heat Revenue
Facility Fee (charged when ticket is purchased): $257,692
Convenience Fee (charged for online ticket purchases): $3,090
Premium seating/advertising: $1,906,988
Merchandise: -$19,740 (a loss)
Home game in Calgary: $66,597
Other revenue : $75,855
Total revenue: $4,394,489
Supply fee guaranteed revenue: $5,700,000
2010/11 shortfall: $1,305,511