TAMPA — One of the most unusual government gambles of late: Whether tweens and teens will forgo trick-or-treating to go see Taylor Swift at Raymond James Stadium.
The Tampa Sports Authority, four years into a plan to make more revenue by turning concert promoter, has put $2.75 million on the line: The guarantee it offered to land a date — Halloween night — on Swift's "1989 World Tour." So far, signs look good the bet will pay off. Swift's latest album is a hit, and ticket sales are climbing toward TSA's break-even point. But there's no predicting the weather, or some other act of God.
"I don't want anyone to get a false sense of security," TSA chief Eric Hart said in an interview. "I've done this for 28 years now. I've lost a couple. It is possible. And when you lose, it's painful."
Who pays if Taylor Swift's show isn't profitable? Taxpayers.
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TSA launched its concert promotion strategy in 2011 and it has paid off handsomely, records show. Three previous concerts, all involving county star Kenny Chesney, have produced a combined profit of $2.5 million and Hart confirmed last week that the Authority also is hoping to bring the Rolling Stones to Raymond James for the band's upcoming tour, though TSA would simply rent the stadium and not promote that show. He said he could not discuss details. But he expected an announcement by the band in the next month.
The pace of Swift's ticket sales suggests that the Sports Authority will make money on her show, too, with about 29,000 tickets already sold and seven months left for sales.
A sellout of the Swift show — about 53,200 — would earn the Sports Authority an estimated $700,000 —- at least half of which would be shared with the Tampa Bay Buccaneers under the stadium's operating agreement. With a sellout, Swift gets an estimated $928,000 on top of the $2.75 million guarantee, though she must cover her own expenses and payments for two opening acts, TSA records show.
Concerts, Hart said, offer one of the few opportunities for revenue growth at Raymond James. The Bucs collect all money from ticket sales, concessions and parking for its football games under the agreement with the TSA, which usually operates at an annual deficit.
Hillsborough taxpayers must cover two-thirds of any stadium budget shortfall, Tampa one-third. In fiscal 2014-15, the TSA said, the city and the county covered about a $2.2 million deficit. The Bucs also take the first $2 million in profits from other stadium events. After $2 million, the team splits profits with the TSA 50-50.
So with a Swift sellout, the TSA would have to give the Bucs half the TSA's profits for the show — $350,000.
Through most of Raymond James' history — and the old Tampa Stadium — the Sports Authority simply rented out the venue to concert promoters who staged shows. So the TSA essentially collected rent, risking none of its own cash. Promoters paid any fee guarantee to the entertainers.
By cutting out the middleman, Hart said, the authority can potentially double its profits. And Sports Authority board members think that, so far, Hart has taken conservative gambles.
"I think Eric has done a remarkable job limiting our risk and only pursuing events where the rewards far exceed any potential risk." said Hillsborough County Commissioner Ken Hagan, who serves on the TSA board.
But as a public agency that manages several publicly owned sports venues in Tampa, the concert business provides a particular challenge given the open nature of government in Florida. The Sports Authority competes against private venues, whose financial records are not public. However, the Swift guarantee can be found in a public records search of the Sports Authority's website.
The Sports Authority began serious negotiations to land Swift in 2013. Swift had not yet announced her tour, and so negotiations had to be kept confidential at the insistence of the entertainer, said TSA spokesman Bobby Silvest. That provides a challenge to a public agency conducting public meetings, even if they are sparsely attended.
So during an authority board meeting in July, Hart discussed the concert generally with board members without naming the act. "It's a big name," he told the board.
A month later, the Sports Authority board was shown a spreadsheet showing estimated revenues and expenses for the Swift show, down to the last penny. Once again, Swift's name was never spoken during a presentation by Hart. But the board, which approved the finances, knew the artist's identity.
"We had briefed board members beforehand," Silvest said.
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The biggest risk in any concert is the obvious one — tickets not selling.
For Swift's show, the authority originally anticipated it would break even if it sold about 38,000 tickets. That covers Swift's guarantee and $1.4 million in additional Sports Authority expenses.
But of the roughly 29,000 tickets sold so far, more-expensive seats closer to the stage are selling better than the cheap seats, so TSA's break-even level may end up considerably lower than 38,000 tickets, Hart said. At the current sales pace, that break-even point may be reached by June 1, Hart estimates.
The authority is making its money on parking, concessions and merchandise sales with Swift taking ticket revenue and a share of merchandise. Hart told his board they don't expect to sell as much beer — many of Swift's fans are underage.
The show goes on, even in the rain. But bad weather dampens attendance, Hart said. And that erodes things like concession sales.
If Swift is forced to cancel due to injury or illness, and a show cannot be rescheduled, refunds would be given. The TSA would lose money with a cancellation. How much depends on when the show is canceled. Hart said a cancellation on the day of the show would be most expensive. He said he could not estimate such a loss.
Sports Authority officials have discussed the possibility a Halloween concert might somehow sap attendance, with parents obliged to take kids trick-or-treating and some younger fans wanting candy over music. Hart said he is not sure doing a Halloween concert will drain attendance.
In the three Kenny Chesney shows, the fewest tickets the Sports Authority sold in the final 90 days before a concert was 12,000, Hart said. If history holds true, Swift is on pace to sell at least 41,000 tickets — more than $200,000 in profit for the authority and the Bucs, according to concert projections.
"We don't think we are going to sell out," Hart said. "But we're doing well."
People in the concert business said the Tampa Sports Authority made a good wager with Swift, one of the biggest current concert draws.
"She's sort of the Derek Jeter of the concert business," said Bobby Rossi, director of entertainment for Ruth Eckerd Hall in Clearwater.
Allen Johnson, executive director of the city of Orlando venues department, which oversees the Citrus Bowl and the Amway Center, did not compete against Tampa to land Swift for an outdoor show. He said the TSA booked Swift before the October release of her latest album, 1989. Had the album tanked, he said, TSA might be sweating ticket sales. But 1989 soared to the top of the charts.
So was the $2.75 million guarantee for Swift justified?
"It's like somebody buying a house," Johnson said. "If you want a house in a certain neighborhood, then you pay what the market will bear. I don't know if the guarantee is too high or too low. We'll know if it was a good decision the day after the concert."
Contact William R. Levesque at email@example.com or (813) 226-3432.