AG 2002 03 18 (Regular) - Laserfiche WebLink

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~ Sent: Thursday, January 31, 2i202 9:35 AM ITc: Arno Fennel; Coy Privette; Robert Freeman; Robert Carruth; Richard D Suggs I Cc: Mark Chappuis; Susie Bonds; Fletcher Hartsell (E-mail) ' ]Subject: Arena Naming Rights Proposal GENTLEMEN: I will attempt to bdefly outline the parameters of the proposal and OUR potential compensation. ETIX.COM is a.n Internet based company that specializes in 'on-line' and 'telephone' event ticket. sales. (You are probably more familiar with a compa'ny called "Ticket Master". ETIX is a rival company.) ETIX is based in Raleigh and has accounts in minor league baseball and international auto racing venues. They want to use our arena to highlight their technology and publicize their brand name. The ETIX system allows customers to order tickets on-line and using the customers c°f~puter and printer to actually "print" the event ticket using a unique bar code system. Telephone sales are similar to Ticket Master With the buyer paying mailing costs for "true hard copy tickets" along with the normal processing fees. ETIX charges lower processing fees than Ticket Master. Ticket Master will not give us specifics one charges for processing tickets to each event. Their charges t:.end to vary by venue and over, t, but can be substantial. An event ticket that at the gate might sell for $25 could end up costing the customer buying on-line or over the telephone as much as $32-33. ETIX charges are based on telephone sales having a service charge of $2.00 plus 5% of the ticket face value and a $2.00 mailing fee per order (one or several tickets). A $25 event ticket · purchased over the telephone would cost the customer $28.50 plus mailing ($2) regardless of the number oi' tickets purchased. On-line purchases cost the customer $1.00 plus 5% of the ticket face value. A $25 event.ticket purchased on-line would cost the customer $27.50 and there is no mailing fee because the customer prints their own ticket. NAMING RIGHTS COMPENSATION: The county's compensation would be based on how many tickets ETIX sells on our behalf either on-line or over the telephone. (Keep in mind that we also get a labor savings that is not computed in this transaction because some one else is handling a large percentage of our major event ticket sales.) The county receives ALL fee revenue that ETIX collects related to event ticketing for th'e "ETIX Arena" at the Cabarrus County EXPO annually up to a base floor of $50,000 each year. Once the $50,000 base i'loor is reached annually, the county continues to receive the $1.00/ticket on-'. line fee and the $2.00/ticket telephone sales fees while ETIX retains the 5%.of face value .. revenue. (ETIX will retain the $2.00 mail fee to cover its mailing expenses.) How does this translate? Basically, we pay NOTHING for ticket sales on-line or over the telephone and receive those revenues that would have gene to a third party processing service. Our revenues grow as the number of events and attendance grows. Most importantly, the customer actually pays less for processing event tickets in advance of events. ETIX is the 'new guy' in this business and certainly much smaller than ticket master. But we or the promoters for events for the ETIX Arena at the Cabarrus County EXPO will advertise where customers can purchase advance tickets or order over the telephone so this should be a win-win expedence. The down side is there is no 'minimum' guarantee to the county fo.r naming dghts. If the Arena or EXPO does not generate events bdnging attendance revenues or if on-tine and telephone sates do not generate the expected activity levels then the naming dghts revenues will not meet expectations. However, similar existing facilities (Ticket Master' projections) show that established venues do as much as 40% of their ticket sales either on-line or over the telephone. If those numbers hold true for our facility we should do well over the long haul and we have a chance to 'grow' the naming dght revenues as the facility matures.