Louisville's KFC Yum! Center keeps name under new sponsorship deal
Under the terms of the contract, Yum! Brands will pay an average of $1.48 million to the arena annually. That compares to about $1.4 million a year during the initial
Yum center retains naming rights
- Thread starter REDFISTFURY3
- Start date
A little good news and bad news in there...
The good is that the LAA simply got someone--anyone--to step up esp. in these times. I didn't think that would happen. And the dollar amount is almost the same even though I highly doubt Yum! Brands had any competition.
The bad news is that the dollar amount IS about the same. Over the time frame in the graph below, naming rights revenue will have increased about 14%, which is a paltry 0.7% annualized rate of increase. The last decade, inflation has been pretty low. So, a more or less fixed income stream was no big deal. Not necessarily so going forward when most are expecting much higher inflation.
One expense that we know will inflate and by how much is the annual debt service. I've projected expenses over the next decade reflecting ONLY that increase, i.e., all other expenses remaining flat for ten years (which we know isn't going to happen). This graph reflects a constant naming rights revenue stream--$1.48 million/yr--as a percentage of the annual expenses. Naming rights revenue will service that debt by an amount that declines from around 9% now to 6.5%.
And of course we know there will be issues with other arena revenue streams, notably the TIF which is (or was) ten times larger than the naming rights. We have revenues that are flat or declining, expenses that are increasing, and an arena net position that is barely positive, relatively speaking. Today's headline notwithstanding, that's a bad mix...
The good is that the LAA simply got someone--anyone--to step up esp. in these times. I didn't think that would happen. And the dollar amount is almost the same even though I highly doubt Yum! Brands had any competition.
The bad news is that the dollar amount IS about the same. Over the time frame in the graph below, naming rights revenue will have increased about 14%, which is a paltry 0.7% annualized rate of increase. The last decade, inflation has been pretty low. So, a more or less fixed income stream was no big deal. Not necessarily so going forward when most are expecting much higher inflation.
One expense that we know will inflate and by how much is the annual debt service. I've projected expenses over the next decade reflecting ONLY that increase, i.e., all other expenses remaining flat for ten years (which we know isn't going to happen). This graph reflects a constant naming rights revenue stream--$1.48 million/yr--as a percentage of the annual expenses. Naming rights revenue will service that debt by an amount that declines from around 9% now to 6.5%.
And of course we know there will be issues with other arena revenue streams, notably the TIF which is (or was) ten times larger than the naming rights. We have revenues that are flat or declining, expenses that are increasing, and an arena net position that is barely positive, relatively speaking. Today's headline notwithstanding, that's a bad mix...
U of L sanctions would lower Yum! Center naming rights deal, records show
The full agreement, obtained under an open records request, sheds more light on the details of the new pact between the Louisville Arena Authority and the fast-food conglomerate signed this
That pretty well tells the whole story.U of L sanctions would lower Yum! Center naming rights deal, records show
The full agreement, obtained under an open records request, sheds more light on the details of the new pact between the Louisville Arena Authority and the fast-food conglomerate signed thiswww.wdrb.com
Good find. And it's the right way IMO to structure the agreement. The LAA had no options but to agree to what Yum! wanted to offer.
Keep in mind too that the consultants in 2008 projected a $2 million annual revenue stream. Maybe the LAA gets there in 2050 or so (when I'll be 93...)
Keep in mind too that the consultants in 2008 projected a $2 million annual revenue stream. Maybe the LAA gets there in 2050 or so (when I'll be 93...)
It's someone's job to put a good product on the floor and fill the seats with fans, both of which help arena finances. I'm not sure whose job that is if it's not "Vince's"...
In related arena news...
Hard Rock Cafe on Fourth Street Live to close after 16 years
If you're not sure how this affects the arena, it's in the TIF zone. Less tax revenue in that part of town reduces the arena's take of that revenue stream.
One step forward, two steps back...
Hard Rock Cafe on Fourth Street Live to close after 16 years
If you're not sure how this affects the arena, it's in the TIF zone. Less tax revenue in that part of town reduces the arena's take of that revenue stream.
One step forward, two steps back...
4th Street Dead was declining before civil unrest and covid. Isn’t most of the second level a for-profit college or something like that? Seems like Cordish would be more to blame than anyone. They run it.
Yeah, I'm not "blaming" anyone... I'm just talking about the results.
It's also not quite accurate to file this news under Covid. HRC appears to have strategically closed nonperforming stores over the years. Presumably with the lease expiring, these guys decided the profit here isn't enough to try to weather the pandemic and the uncertainty of how much/little traffic there will be on the other side. Hard to blame them.
If you have a favorite restaurant down that way, you should probably check it out before it closes too. I'm gonna have to try out the churrascaria there to see how it compares to the actual Brazilian versions I sampled in Rio and Sao Paulo. I may only get one chance.
On the positive side, there are new restaurants occupying the old Buckhead properties incl. the one here in Jeffersonville. And it appears Upland Brewing may also be taking over the adjacent and long abandoned Rocky's property here as well. At least that's the rumor. Of course, we're a river away from the arena TIF district...
It's also not quite accurate to file this news under Covid. HRC appears to have strategically closed nonperforming stores over the years. Presumably with the lease expiring, these guys decided the profit here isn't enough to try to weather the pandemic and the uncertainty of how much/little traffic there will be on the other side. Hard to blame them.
If you have a favorite restaurant down that way, you should probably check it out before it closes too. I'm gonna have to try out the churrascaria there to see how it compares to the actual Brazilian versions I sampled in Rio and Sao Paulo. I may only get one chance.
On the positive side, there are new restaurants occupying the old Buckhead properties incl. the one here in Jeffersonville. And it appears Upland Brewing may also be taking over the adjacent and long abandoned Rocky's property here as well. At least that's the rumor. Of course, we're a river away from the arena TIF district...
Last edited:
