Hartford Business Journal

www.HartfordBusiness.com • May 28, 2018 • Hartford Business Journal 17 The admissions tax, which kicked in Dec. 1 for the XL Center, is expected to cost the venue about $300,000 this fiscal year, contributing to a projected operating deficit of $3 million — which would be the venue's worst operating performance since 2014, and a tab the state is required to pick up. In the full fiscal year to come, the tax impact on XL is expected to be ap- proximately $400,000, Freimuth said. Of that amount next year, $200,000 will come from Hartford Wolf Pack hockey games — a cost XL Center must eat, under its af- filiation deal with the team's owner- ship. Meanwhile, UConn hockey and basketball games at the XL Center remain exempt from the tax. The levy also makes it tougher for the arena to turn a profit on events it does book. Freimuth said some promoters, mostly for concerts, have demanded that the venue split the added costs, either by agreeing to take less revenue or more risk. "They say 'you just took my margin down, split it with me,' " Freimuth said. "If we can, we do it. To the extent we can't do it, we may lose an event." He declined to name particular events XL Center has missed out on this year, for fear of damaging future prospects and relationships with promoters. "We're constantly negotiating with these guys," he explained. A promoter adjusts The tax levy on the XL Center fol- lows an unsuccessful attempt this spring to convince lawmakers to repeal it. Among those who lobbied for the tax repeal in March were XL Center operator/manager Spectra Venue Management, Webster Bank Arena operator Harbor Yard Entertainment, and Live Nation, the world's largest concert promoter as ranked by con- cert trade publication Pollstar. They told lawmakers the venues would be at a competitive disadvan- tage to Connecticut's casinos, which don't pay the admissions tax, as well as Massachusetts and New York, which are among a minority of states that don't levy an admissions tax. A Harbor Yard representative didn't respond to a request for com- ment for this story. But Jim Koplik, Connecticut and upstate New York president for Live Nation, said he has slowed the pace of his Connecticut events, particularly in Bridgeport, which also assesses a 5 percent local option admissions tax, authorized by the legislature in 2016. "We have nothing scheduled at Webster," Koplik said, adding that Live Nation had recently pro- moted three to five events there per year. Koplik said he has also been forced to be more selective about the XL Center, where he's expecting to promote six to eight shows this year. "It would be more and has been more in the past, if it weren't for the tax," he said. On May 21, Live Nation presented a Journey and Def Leppard concert at XL, which Koplik said was booked prior to the tax taking effect. He estimated the show grossed over $1 million in revenue, which would generate $100,000 for the state's coffers. But if those bands tour next year, a Hartford visit might be less certain, Kop- lik said. "We really haven't seen the full impact yet. Some of these shows were already scheduled," he said. Meanwhile, Koplik said he has been trying to convince Trans- Siberian Orchestra to return to the venue this Christmas, where it has played a number of times over the past decade. But he is skeptical about his prospects because of the tax. And while Live Nation routinely tries to get Paul McCartney to play the XL Center (where he last visited in 2002), Koplik said the tax has reduced his confidence. This year, he decided not to put in an offer with the musician's management bookers. Koplik said Connecticut is a sec- ondary market where artists might need some enticing to perform. He thinks it's ironic that the state would add a tax to a venue in which it has invested tens of millions of dollars in renovations and upkeep. "As a businessman, I would never fund a business and then cripple it by putting a tax on it," he said. Journey lead singer Arnel Pineda performing at the XL Center. Fans rocking out at Journey's recent XL Center performance. Thank you, Sponsors: You are cordially invited to attend The University of Saint Joseph IMAGINE … THE SKY'S THE LIMIT 2018 Gala Friday, June 8, 2018 Cocktail Reception at 6 p.m. Followed by Dinner, Dancing, and Exclusive Silent Auction Connecticut Convention Center 100 Columbus Boulevard, Hartford Black Tie Optional Proceeds will support financial aid and STEM programming Honorees Karyn Bonnell Cahill '83, Ph.D. Senior Scientist, EnviroLogix Pamela E. 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