By Eric Curl
June 5, 2024 – The city of Savannah’s Enmarket Arena has been operating for about 2.5 years after holding its first event in February 2022. Per the conditions of their operating agreement, Oak View Group (OVG) recently provided the city with an independent audit reporting how business is going at the $148-million project funded by voter-approved sales-tax revenue.
The Enmarket Arena is profitable, which is more than you can say for the Civic Center it replaced. However, revenue was down last year, the venue’s first full year in business. Also, OVG is getting some negative attention from the federal government. While not named as a defendant, the venue management company was recently described as a colluder in a US Dept. of Justice lawsuit against Live Nation and Ticketmaster. Still, the arena operator and city do not seem concerned about the venue’s prospects or lawsuit, according to their responses to media inquiries from Savannah Agenda.
The arena’s revenue and expenditures for 2023 were recently provided to the city in a financial report that Savannah Agenda obtained through an open-records request.
The audit reported event-related revenue decreased from almost $14.7 million in 2022 to almost $11.6 million in 2023. The drop came last year during a 12-month period, when the newly opened arena did not hold its first event until February in 2022.
Still, the arena’s contracted operator, OVG is pleased with the venue’s performance, according to a company spokesperson.
“During our first two years, we exceeded all projections that we or anyone else had for the arena,” the spokesperson said in a statement on Saturday. “This current year is on pace to be in line with the first year.”
OVG declined to comment in more detail regarding the findings and wanted to wait until completing its review of the report with the city, according to the spokesperson.
The company is obligated to share a percentage of profits, according to the agreement. So the amount of revenue it brings in impacts how much the city receives. The amount of profit reportedly shared with the city dropped from $583,914 in 2022 to $134,443 in 2023. Most of the profit revenue shared to the city was from parking income, which decreased to $105,327 compared to the city’s share of $305,052 in 2022.
City staff have met with operational partners at OVG to review the audited financial statements and discuss strategies to improve outcomes in 2024, according to city spokesman Joshua Peacock.
“Live music venues typically experience revenue fluctuations from year to year depending on the types of acts on tour,” Peacock said in an emailed statement on Wednesday. “The Enmarket Arena brought a number of very popular performers to Savannah in 2022, its opening year.”
OVG earned $1.2 million in profits in 2023 compared to about $1.6 million in 2022. It also brought a new professional sports team (and sport) with the Savannah Ghost Pirates minor league hockey team. Also, Janet Jackson played at the new venue with Ludacris during her “Together Again” tour in 2023.
Net Arena revenue was once again positive in 2023, and Ghost Pirates ticket sales remained near the top of the league, all of which is good news for Savannah, Peacock said, adding that the financial statements do not reflect the overall economic impact of the arena associated with increased visitor spending.
The city contracted with OVG in November 2019 to manage the activities and operations of the arena, including rental of the space, advertising, promotions, marketing, event management, public relations, and support services. The agreement between OVG and the city is for ten operating years.
OVG was featured in the complaints of anti-competitive conduct alleged in a US Dept. of Justice lawsuit filed last month, which claims that OVG colluded and partnered with Live Nation to serve as a “hammer” and “protector” of Live Nation by bolstering venues’ use of Ticketmaster and agreeing to not bid against Live Nation for acts.
Specifically, the DOJ complaint states “Live Nation and Oak View Group have colluded and established a partnership to allocate business lines, avoid competing with each other, and chart a mutually beneficial plan to cement Live Nation’s dominance.”
OVG declined on Tuesday to comment on the allegations in the lawsuit. The city also declined to comment on the complaint.
