City of Glendale Extends AEG's Gila River Arena Management Contract
Home City of Glendale Extends AEGs Gila River Arena Management Contract
August 7, 2018
The management company of the Arizona Coyotes’ home will continue as that until June 30, 2026. The City of Glendale has extended its contract with AEG Facilities to manage Gila River Arena, AEG announced Wednesday.
The city approved a five-year contract in 2016 with AEG that included an option for the city manager to extend the contract for an additional five years.
On Wednesday, Glendale City Manager Kevin Phelps announced that the contract was extended five years on the condition that a high-tech LED lighting system is installed in the arena by AEG. The lighting will be able to change colors and provide other elements that will help improve the fan experience, along with reducing operational costs.
With three years still remaining on the original contract, AEG was interested in securing a longer-term contract now, according to Phelps.
Phelps cited AEG’s ability to provide “a new level of sophistication” in regards to managing the arena through the growth in concerts, ticket sales and gross sales. Within the last year, the arena hosted more concerts, sold more tickets and accumulated the highest gross sales since 2009, according to Gila River Arena Manager Dale Adams.
The revenue-sharing agreement from the initial contract will remain the same. Glendale will pay AEG an annual fee of $5.6 million to manage the arena, with that cost to be offset by the shared arena revenue.
After year one, the city collected $1.6 million and $1.68 million after year two, after having anticipated $1 million. By factoring in the annual management cost of $5.6 million, the net loss was $4 million and $3.92 million, respectively. Despite the loss, it is a much-welcomed improvement after the arena lost nearly $10 million in 2015.