Your Value to the Arena

OVER THE EDGE

Jimmie Santee, MPD, MG

I’ve written about this subject several times over the years but feel it important to bring up again. Having been an LTS instructor, competitive coach, LTS director, club president, competition director, and rink manager, it does give me a unique perspective to the arena environment. Unfortunately, management in many rinks find it difficult to understand the figure skating market and coaches in general. Too often, figure skating coaches feel they are treated as second class citizens. From a management perspective, figure skating programs take too much effort and reap little rewards… we are considered high maintenance.

Rarely do figure skating programs get the ice time required, and the hours we do get are seldom prime-time. Many managers think like this. When hourly rates for ice are $400 an hour, a session would need 20 skaters at $20 to meet the rate. Many coaches don’t want 20 skaters on a session so the cost per skater goes up. Managers think, “Should I deal with figure skaters and live and die by the whims of those parents and coaches or make it simple on myself and sell it to hockey?” A hockey association may buy 80 hours a week of ice. Over the course of a hockey season that can be close to a million dollars. Back when I was an arena manager with a single sheet of ice in the early 2000’s, I sold just over $800,000 a year in hockey ice. That contract was done each summer and I knew the money was in the bank. In all honesty, it wasn’t me selling the ice as much as the hockey association buying it. If they had their way, they would have bought all the ice. All I had to do was write the agreement which, for all intents and purposes, was a copy and paste process from the previous season. The only real issues I ever had with the hockey group were the messes in the locker rooms.

For an arena to be truly successful however, diverse programming is important. Hockey associations do fail. When the easy money dries up and without a strong figure skating program, including LTS and public sessions, the arena fails. Specifically, when the rinks have private ownership, a lack of diverse programing is a huge problem. Publicly owned facilities don’t always have this issue as they generally have considerable tax breaks and government subsidies and in many instances are required to accommodate all types of user groups.

So how do coaches show their value to a rink manager? Simply, each professional coach contributes to the revenue of a rink at a much greater level than most understand.

The convention and visitor’s industry have a formula to measure the economic impact to a community when a group decides to pick their city for an event. The process involves determining what the average person would spend on a trip to their city. Travel, lodging, food, entertainment, and other amenities are considered and, depending on the location, it could add up to hundreds of dollars a day. Using this model, we can determine the impact figure skating coaches have on a facility.

As a basis for this exercise, I’ll make some assumptions. A single coach who teaches figure skating as their main source of income will have between 20 to 30 students. Let’s assume that the coach is a competitive coach with skaters ranging from pre-preliminary to novice. At the juvenile, intermediate, or novice level, a qualifying skater will be on the ice approximately 12 to 15 hours a week. At $15 a session, that’s $180 to $225 per week, or based on 48 weeks of skating per year, $8,640 to $ 10,800. For pre-juvenile and below, 6 to 10 hours a week are average, which comes out to $4,320 to $7,200. Assuming an average of 25 skaters, that is revenue between $108,000 and $270,000 annually in ice time alone. Does your arena have a snack bar or pro shop? Vending machines? Competitions and ice shows? Are you paying a commission? This all adds to the bottom line.

A manager doesn’t generally recognize the average figure skater and what each coach’s business contributes to the bottom line. What they often see is the same 720 hours to hockey at $400, which is $288,000.

Now to the big picture. What are considered prime hours? Prime ice is relative to the region, depending on demographics, school schedules, and economic factors, among others. Overall, an arena should have a 126 hours per week average per surface to be selling, of which a minimum of 50 hours should be prime. For argument’s sake, I will use 6:00pm to midnight on weekdays, and noon to 10:00 pm on weekends as prime. Prime hours are almost exclusively sold at the highest rate possible. Using the $400 rate above, prime ice will bring in revenue of $1,040,000 annually for a single surface. Based on the goal of maximizing the selling of prime ice at the full rate, multiple surface facilities are the norm. Per surface, this leaves 76 hours of non-prime ice. Some may be sold at the prime rate, but most will not. This is where a great figure skating program can help the arena make a substantial profit. This is also where I believe 400 an hour is irrelevant.

Every skater paying a fee pays towards the expenses of running the rink. This is where it is important to understand the strength and weaknesses of figure skating programs. Not every coach is going to have 25 students. But the total number of figure skaters in a program are relevant. A club with 100 members could conceivably reach $750,000 in revenue. Adding that to the potential of selling prime ice at the going rate, revenue is at almost 1.8 million. Add in public skating, special events, and a Learn to Skate program, 2 million in revenue is attainable. There are examples of this strategy used in other businesses too. Movie Theaters have matinee prices and restaurant/bars offer early bird specials and happy hour prices to increase foot traffic.

A figure skating program also allows a facility manager to reduce energy costs. Ice compressors are running 24/7 all year long. They are cycling on or off all day long, day after day. Hockey ice is cold, taking more energy to maintain.

During those non-prime hours, figure skating gives the manager an opportunity to raise the temperature of the ice.

In my world, I am raising the temperature of the ice just before midnight and lowering it beginning at 4:30pm the following evening and selling as many single session skaters beginning at 6:00am.

This was my philosophy of management and it worked well for my facility. Diversity of programming is important as well as efficient energy management. If you’re in a facility that is not pro-figure skating, it might be time to do the math yourself and show management your value to the facility.