By NEIL HARTNELL
Tribune Business Editor
The taxpayer faces having to pay hundreds of thousands of dollars to subsidise the upcoming Bahamas Bowl football game, after the Government effectively gave away potential multi-million dollar revenue streams to the game’s organisers.
Documents obtained by Tribune Business reveal that the contract signed by the Government has exposed the Bahamian taxpayer, and National Sports Authority, to covering the costs of hosting the Christmas Eve match-up given the lack of income it will generate for the latter.
LeRoy Archer, the National Sports Authority’s chairman, in an October 6 letter to Obie Wilchcombe, minister of tourism, warned that the $70,000 stadium rental fee stipulated in the deal with Conference USA would only cover event security and staffing costs.
He thus called for “initial funding for the event” to be provided to the National Sports Authority, meaning that the taxpaying Bahamian public - via the Government - will be called on to underwrite the event.
The documents also reveal that, despite National Sports Authority objections, the contract with Conference USA, the Bowl promoters, has given away 100 per cent of the event’s most valuable income streams for he entire six-year period covered by the deal.
These are the TV, radio and all media related rights, potentially a multi-million dollar income stream that could have financed the National Sports Authority and removed it from the Government’s ‘subsidy list’.
Sponsorship and advertising rights for the games, which are contracted until 2019, have also been made the exclusive preserve of Conference USA, despite pleas by Mr Archer that these revenues should be shared.
Commenting on he Government’s seeming commercial naivete, Mr Archer told Mr Wilchcombe: “It appears that all potential revenue rights for the National Sports Authority and the Bahamas have been forfeited in favour of the client and organisers of the Bahamas Bowl.
“This is an extremely important component that could have provided the National Sports Authority much-needed income, and should be visited so that there is greater equity in revenues to be earned.”
And, stunningly, the National Sports Authority chairman also warns Mr Wilchcombe that the contract with Conference USA could be declared “null and void”.
This is because the person who signed it, Calvin Balfour, permanent secretary at the Ministry of Youth, Sports and Culture, is “not an authorised signature” for National Sports Authority contracts, and therefore cannot bind it.
“National Sports Authority also seeks to ensure that the actual signing of this contract by acting PS Balfour does not create unnecessary exposure/liability to the National Sports Authority,” Mr Archer wrote.
“Some may deem the contract null and void based on the fact that PS Balfour is not an authorised National Sports Authority signature for contracts.”
Mr Archer, when contacted by Tribune Business yesterday, referred this newspaper to Daniel Johnson, minister of youth, sports and culture, explaining that all comments should come from him because his Ministry signed the contract.
Neither Mr Wilchcombe nor Dr Johnson returned Tribune Business messages left on their cell phones seeking comments.
All efforts to contact Mr Balfour proved fruitless, too, because he never replied to this newspaper’s detailed e-mailed questions. Attempts to contact him at his office were futile, because every time Tribune Business rang it was out through to a voice mail box that was full or did not work.
The Government’s desire to carve out a sports tourism niche for the Bahamas is understandable, but in its eagerness to do so it is sacrificing much-needed income for the National Sports Authority that could prevent it from becoming another ‘drain’ on the Bahamian taxpayer.
It is also unclear how the Government can justify giving so much away, and adding to the taxpayer burden, given its present financial circumstances and demand that Bahamians ‘pay more’ through Value-Added Tax (VAT).
While the Bahamas Bowl may provide a boost to some Bahamian hotels and tourism-related businesses, it is unclear whether this will offset the burden being placed on the public purse.
Still, one person who may not be entirely unhappy with the contract is Prime Minister Perry Christie. For it commits to allocating 330 tickets to the game to himself and his guests.
Referring to the National Sports Authority’s ticket allocation, the contract states: “This allotment shall include approximately 330 seats in the stadium below the Prime Minister’s luxury box for use by the Prime Minister and his guests.”
Tribune Business’s analysis of the documents shows that Mr Archer was warning that the Bahamas Bowl contract was a ‘bad deal’ back in May
In a letter sent to Dr Johnson on the 13th of that month, he recommended several changes to the draft contract with Conference USA.
Most significantly, referring to the paltry ‘rental fee’ the organisers will pay for using the Thomas A. Robinson Stadium, Mr Archer warns: “As it is evident that the fee of $70,000 will not cover all National Sports Authority costs, we would like to meet to discuss how the above costs can be covered and funded.”
He called for several clauses in the draft agreement to renegotiated and changed, repeating twice: “National Sports Authority cannot assume all costs.”
And Mr Archer also urged that the National Sports Authority “wants to share in the revenue” from the retail sales; media and commercial rights; and sponsorship rights.
It is clear that all these requests and warnings went unheeded, as the same concerns were expressed by Mr Archer in his October 6 letter to Mr Wilchcombe, clearly hoping to catch the eye of another minister.
And, seemingly unknown to Mr Archer at the time he wrote his May 13 letter, was that Mr Balfour had signed the contract with Conference USA on May 7 - some six days earlier. And the Bahamas Bowl promoters applied their signature just one day later, on May 14.
Mr Archer, in what appears a ‘fait accompli’ by the Government, was sent a copy of the finalised agreement with Conference USA on May 23.
“Please note that this Ministry, in collaboration with the Ministry of Tourism, agreed to the terms and conditions of the Agreement,” Mr Balfour informed him.
It is unclear why Mr Archer seemingly waited almost five months to contact Mr Wilchcombe, but his letter expresses the same concerns as the ones outlined to Dr Johnson.
Warning that the set-up costs for the Bahamas Bowl would be “significantly higher” than for the previous HBCUX football game, Mr Archer said the contract gave no timeline for when the promoters had to pay the $70,000 rental fee to the National Sports Authority.
He said this should be paid no less than 60 days prior to the Christmas Eve event, and added that there had been a “material change” to the selection of the two participating teams.
Mr Archer said the “initial impression” was that the two teams would be chosen using the existing National Collegiate Athletic Association (NCAA) system, yet the contract said they would now be selected by Conference USA.
Among the costs that the National Sports Authority will have to absorb, according to Mr Archer, are utilities; staffing and security; the provision of event booths; video boards and a sound system; partitioned team areas; training and locker rooms; and media areas.
Explaining that the $70,000 stadium rental fee could never cover these costs, Mr Archer said it was unclear whether the National Sports Authority or promoters would have to cover the $28,000 cost for upgrading the video boards.
“This clause also provides that the National Sports Authority surrenders all the video boards, which would greatly reduce our ability to sell ads if Bahamas Bowl is to control content,” Mr Archer warned.
“This is unprecedented in stadium operations and requires further clarification.”
He added that the clause suggesting the National Sports Authority cover ‘production expenses’ was “vary ambiguous and requires a full explanation”.
“As it reads, it says that the National Sports Authority could be responsible to a very limitless price tag,” Mr Archer warned.
The National Sports Authority is planning to place its 6,676 ticket allocation for the Bahamas Bowl on the market on November 17.
However, Mr Archer warned that local ticket sales might be “greatly impacted” as a result of a clause that prevents it selling beer and alcohol within the stadium unless approved by the game promoters.
Tribune Business sources, though, have suggested that the Christmas Eve data for the Bahamas Bowl is not the best timing, and it will be a struggle to maximise the game’s economic benefits.
Hotels and airlines are not interested in short-term stays over the Christmas period, while shopping and family time might dampen Bahamian interest.
Tribune Business previously revealed how the National Sports Authority has effectively been forced to write-off $237,000 due to “non-compliance” by users of the Thomas A. Robinson stadium in paying rental fees.
They are the Local Organising Committee (LOC) for the 2013 Carifta track and field championships, and the promoters of the soccer match between English Premier League side, Tottenham Hotspur, and the Jamaican national team, the ‘Reggae Boyz’.
Throw in the Bahamas Bowl, and the danger here is that the National Sports Authority goes the way of multiple other government agencies and becomes an ever-increasing financial drain on the Government - at a time when the Bahamian taxpayer can least afford it.
The National Sports Authority was created to specifically prevent this from happening, with the medium to long-term goal that it would be financially self-sustaining and no burden to the taxpayer.
Tribune Business understands from sources close to the situation that there is frustration within National Sports Authority management that the Government has yet to ‘take the gloves off’ and allow them to run it as a business.
To-date, the Government’s position appears to be that it is more important for the sporting event and its promoter - as opposed to the National Sports Authority - to be successful. Even if this means the latter giving up stadium rental fees, plus its share of other revenue streams - ticketing, parking and concession booth rentals. This then has to be picked up by the taxpayer, but the Government is able to bask in the limelight and look good.
Some $3.735 million in taxpayer funds were pumped into the National Sports Authority over its first two years.