VenuWorks on knees begging for second chance

The City Beat was a little sleep deprived yesterday and didn't have the energy to blog about anything useful.

By now, you'll have read the story about the Alerus Center getting that sweet facility management deal with VenuWorks. The deal binds the center's financial fate a lot closer to the fate of the facility managers.

If the Alerus Center doesn't make money, VenuWorks doesn't make money. It's hard not to be a little impressed that the company is willing to put its management fees at risk in this way. Bear in mind that this won't mean VenuWorks would stop paying its local employees. It just means the management fee that goes back to corporate headquarters to pay for support services and provide profits would drop to zero.

There's plenty of real risks involved here. Major artists stay in major metros longer instead of going out to smaller cities. Consolidation among concert promoters mean negotiations are tougher. There's a strong competitor in the Red River Valley at Winnipeg's MTS Centre. Electric rates keep growing.

While Canad Inns could bring in lots of conventions, conventions are not money makers. In fact, they're frequently money losers, at least for the hosting facility.

I asked VenuWorks chief Steve Peters during a break in the meeting if this deal was pretty unusual. He said he had not offered it to anybody else. Alerus Center commissioner David Evenson had mentioned that there was a similar deal at the U.S. Cellular Center in Cedar Rapids, Iowa. But Steve said that that one involved a simple penalty clause, which is not the same as a break even guarantee.

The reason he's making that guarantee with the Alerus Center is, as he told commissioners, VenuWorks' "flagship" client. He talked about how after that meeting in May where commissioners told him they didn't need him around here any more, he went back to Ames, Iowa, and decided that it was he who'd done them wrong.

He was probably thinking hard about what David Evenson said "It's like a relationship between a man and a woman: Sometimes you have to take time apart to see if you're right for each other."

So he came crawling back to Grand Forks to ask for a second chance: "We weren't hearing your concerns," he fessed. "You're our flagship, our newest and biggest. You deserve our full attention. You deserve our top attention."

Seriously, he was, like, channeling Willie Nelson:

Maybe I didn't love you
Quite as often as I could have
Maybe I didn't treat you
Quite as good as I should have
If I made you feel second best
Girl I'm sorry I was blind

You were always on my mind
You were always on my mind

You just had to be there. It was beautiful.

Anyway, Steve isn't just stroking egos. The Alerus Center really is VenuWorks' flagship (VenuWorks' new Web site isn't done yet so the link is to its old Web site under the old name of Compass Facility Management).

*In case of multiple arenas/theaters, seating capacity is for the largest one since concerts can't be divided.
**Seating calculated using banquet seating (most generous estimate) where no estimate available
# Convention center figures is most generous guesstimate since no seating data is available.

Sources: Individual arena/convention center Web sites and, where site has no relevant data, Wikipedia.com.

If VenuWorks lost the Alerus Center contract, it wouldn't just mean loss of money, it would mean loss of reputation. Suddenly, VenuWorks changes from a manager of a full-sized arena -- Nevermind the market size; 20,000 is pretty much at the top end nationwide. -- to one that manages mostly rinky-dink arenas. Lose the Alerus Center and what chance would a company have of hitting the big time?

Posted by: Tu-Uyen on 11/13/2007 at 3:04 PM | Comments (9) | Permalink

Tags: alerus center, gf and egf