Regina outbid on two major summer stadium concerts: REAL

REAL explains financial shortfall WATCH: Officials from REAL offered explanations for its budget shortfalls to Regina’s city council. Donovan Maess explains.

The bell did not toll for Mosaic Stadium when it came to bidding on two major concert tours, according to REAL CEO Tim Reid.

Reid told executive committee Wednesday that “one country music artist and one classic ‘90s rock band” opted for other jurisdictions.

“The biggest challenge that we have is we’re a small market with a relatively big stadium. However, Edmonton is a bigger market and they have more seats in the stadium, so the math just seems to work better there,” Reid said.

“So we have struggled this year to put a stadium concert in place, and the two stadium concerts that we had were lost to other markets.”

Luke Combs is currently on a world tour, with Canadian stadium stops at Vancouver’s B.C. Place on May 27 and Edmonton’s Commonwealth Stadium on June 3 before returning to American venues, according to Ticketmaster.

The next stadium concert currently scheduled for Edmonton: Metallica, who will perform two shows at Commonwealth in Summer 2024.

COMMITTEE GRANTS REAL MORE CREDIT

Regina’s executive committee granted REAL the ability to tap into its line of credit at its Wednesday meeting.

REAL forecasted a $6.9 million negative cash flow by September if it could not access the funds.

“Because of the impacts of COVID-19, we simply found ourselves in a place where we needed to have access to that cash flow,” Reid said.

“We depend on large events in order to make our business work.”

As a city-owned organization, city council must approve the exhibition association to go into debt.

REAL has a maximum allowable line of credit of $21 million.

On Wednesday, they asked executive for $4.1 million which would have maxed-out their line of credit. City administration recommended committee approve $3.4 million so REAL can honour payment obligations, leaving $700k remaining.

Committee approved the recommendation.

“It’s no different that your own finances,” Reid explained.

“You pay down a credit card or line of credit and you have access to it whenever you want.”

Reid told councillors REAL makes profit of about $500k based on “one big event” per year. He said a large-scale concert can do that.

In debate, councillors were concerned the business model was unsustainable.

“I’m not sure REAL has done the work to find internal cost saving measures,” Coun. Shanon Zachidniak said.

“If they have, we haven’t received the report. What work have they done before we get to the point of restructuring their debt.”

“We need to make sure we are fiscally responsible for our tax dollars,” Coun. Lori Bresciani said.

“We have to look at changing the business model.”

REAL also said it discovered $44 million in deferred maintenance costs on city assets it looks after on its property.

“REAL has contributed in many ways to the city without sending the city a bill,” said Coun. Bob Hawkins told commitee.

“What would the city be like without REAL?” he asked. “This is short-term relief so a long-term plan can be developed.”

With the approval, there is no impact on the 2023 budget.

However, city administration and REAL will bring a proposal to council on the organization’s long-term financial sustainability as part of 2024 budget deliberations.