Lincoln’s brand-new Pinnacle Bank Arena’s operating deficit has widened to nearly $376,000 in its first seven months of operation.
As Nebraska Watchdog was the first to report in March, although the $186 million arena has attracted a dazzling lineup of big-name concerts and a sold-out season of Husker men’s basketball games, it has been posting operational losses. In its first five months, it posted a nearly $172,000 loss…
The overriding problem is the way the city structured the deal so the University of Nebraska-Lincoln gets most of the revenue off basketball games and the joint public agency that oversees the arena and surrounding West Haymarket development gets most of the revenue generated by the arena. Why? The city needed UNL to be the arena’s major tenant; UNL didn’t need the city. So guess who got the better deal?
This isn’t actually as bad as it sounds: As Nebraska Watchdog goes on to explain, the main reason the arena is losing money is because revenue from ad boards, naming rights, suite sales, and club seats is going to pay off the arena debt, which means it’s not available for turning a profit. That’s the opposite of, say, the Sprint Center in Kansas City, where revenue is siphoned off to pay the arena operator’s profits, and so isn’t available to pay off construction debt.
But either way it comes to the same thing: Even crazy-successful arenas generally lose money once the cost of building the damn things is factored in. But then, you knew that already.