Q3 2022 Hall of Fame Resort & Entertainment Co Earnings Call
[music].
Paul.
Yes.
Good morning, and welcome to the whole thing resorts and entertainment company's third quarter 2022 earnings Conference call.
The conference is being recorded and all participants are in listen only mode.
We will open the conference for questions and answers following the prepared remarks.
I'll turn the call over and grabs executive Vice President Public Affairs. Please go ahead ma'am.
Good morning, and thank you all for joining us for our third quarter 2022 earnings Conference call. Our latest press release supplemental slides and Form 10-Q were posted yesterday evening. After market hours. These documents can be found in the Investor Relations section of our website at H O F. R. E C O dot com after my brief.
Introduction, Michael Crawford, our President and CEO will give an overview of the quarter's results and an update on our fiscal year Benjamin Lee Our Chief Financial Officer will then provide analysis of the quarter's financial results and an update on the company's financial outlook.
During today's call we will make forward looking statements that reflect the company's current expectations about future plans and performance. These statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties.
I encourage each of you to read the full disclosure concerning forward looking statements in the earnings press release.
Additionally, please note that the company uses non-GAAP results to evaluate performance internally as detailed in the press release, we have posted a supplementary slide deck summarizing the quarterly results. These slides can be accessed on our website and will be archived there along with the replay of this call. If you have additional questions as always after today.
Please contact me directly is now my pleasure to turn the call over to Michael Crawford.
Thank you Ryan and good morning, everybody I hope everyone is having a good week so far.
I think you probably saw yesterday, if you have on our Q3 earnings release I thought it was fantastic I really think what we're showing here is an ability to overcome a lot of adversity and I want to thank the team I think the team has done an admirable job in the face of adversity.
We talk a little bit about some of the things that are happening obviously, we've come through COVID-19.
I know COVID-19 is still around and something that's threatening People's health and safety.
Supply chain issues labor challenges.
Things with inflation, although we saw inflation moderate a little bit last week and so that's very encouraging we have had to overcome a lot of adversity and yet I think as you see the results quarter over quarter and you see the improvement and you see the execution of what was and what still continues to be our stated game plan.
It's pretty inspiring and I think investors and shareholders and partners should take great comfort in this team's ability to execute.
From a macro standpoint, we maintain focus on a couple of things number one consumer spending.
And while consumer confidence seems to have gone down a little bit and I think folks are focused on inflation or recession. The reality is the consumer is still spending and theyre talking with their wallets and I think for a regional destination like the village virtual gaming opportunities sports betting.
Those types of experiences are still very much in high demand and when you look at some of the evidence of that.
The Revpar for hotels are back to the 2019 levels business travelers are coming back we're seeing that in our own hotel and a fairly significant way entertainment theme parks Theyre, having record highs in attendance and people are spending money. While they are in those parks. So experiences are incredibly important and while you.
May defer buying a home in this environment, where you may defer buying a more significant item in this environment due to interest rates.
Still want to go out for meals and you still want to be entertained and I like to say escape reality.
<unk> operators are also seeing by the way record highs and it's especially here in Ohio as I watched some of the reporting over the last couple of months. It is incredibly encouraging to see that people are enhancing the way in which they engage with sport and we're very much looking forward to the launch of our sports betting experiences Jan one.
So from a company point of view I'd, just like to highlight some of the more recent news in some of the key areas of focus that we've had.
First and foremost, let's talk a little bit about financing.
We have closed over $180 million worth of new financing this year alone and this year is not finished by the way.
That is a big number for a company our size and in the environment that we're in I think people should say two things Wow. The team really had the opportunity to execute and to they didn't do it haphazardly. They did it very pragmatically and so what do I mean by that.
When we looked at the debt that we've added we've added longer term debt.
We've added that that is.
Not as costly as you made imagine it might imagine in this environment. So the average cost of the debt that we've added so far is seven 4% from an interest rate point of view I think that's a big win for us and our company in Q3 alone we did almost $64 million worth of new debt financing and we also were very pragmatic around that.
Use of our ATM, bringing in only $2 4 million.
Now one thing that I'd like everyone to remember because I hear a lot about this in questions isn't the company taking on too much debt.
If you remember the call that we had almost a year ago, we were in the phase of bringing in equity and so this company to date has raised over $130 million of equity, which has helped support the build of assets the creation of environments and experiences. We now are in a phase that we talked about it.
That time of needing to bring in the public and private financing to continue to build assets and build those experiences. So I don't think anyone should be concerned about the amount of debt. We're taking it's the debt that was needed in the debt that we stated we were going to target very early this year and the team has had great success in doing that.
Longer term lower cost and so that is a big win for us as I said, so the takeaway is.
We are all invested in the success of this company when I say, we've one of the biggest parts of what the recent transactions we announced we're about was the largest shareholder we have IRG.
Now IRG not.
Not only is the largest shareholder from a stock point of view, but they have lent money to the company.
They have stood behind loans to the company as a younger startup company you need that sort of support from our more established entity.
They have now continued with that support providing a $28 million senior loan facility for our hotel onsite that we will start construction in the spring.
And they have also provided a construction guarantee for our water Park.
Completion guarantee I should say what that effectively means is if we werent successful in raising the money that we needed to build the waterpark IRG will provide the funding source thats needed to completed it's a guarantee the water Park is now guaranteed the hotel now has the senior lending that it needs to continue with <unk>.
Instruction. So again the takeaway is the largest shareholder here has had significant commitment to this project into this company and continues to do that one last point I want to raise.
When you talk about taking up residency.
Talk about the community support that's needed to do that.
City the county, a lot of leadership in this community with community foundations have also stood behind the company and provided low cost longer term debt financing that was needed at a time for infrastructure and infrastructure is this stuff that banks don't like to finance because they view it as non revenue bearing stuff.
And so that kind of support from our community everyone is going all in on the success here. This is not an option to fail from the perspectives of our largest shareholder and our community. So we are incredibly appreciative of that and excited about the level of support.
Let me talk now about the topic that I know everyone gets worked up about the reverse stock split.
And so I've gotten many notes and many points of feedback about how horrible it is to consider a reverse stock split.
Let me say a few things number one.
The perception of a reverse stock split is one thing the reality of what it does is very much different.
A reverse stock split is a tool that if needed allows us to maintain our listing on the NASDAQ I think everyone would agree that it's much better to have access to liquidity, it's much better for our shareholders to have the ability to actually trade the shares that they are holding today and it's much better for us as a company to be.
At the right valuation from a stock price point of view.
And today, we're not.
We're not at the right valuation at 60 or 70 the.
The company has much much greater value than what the stock prices reflected.
We are at the Mercy of the indices themselves. We are at the mercy of the inflationary environment consumer sentiment.
But at the same time, you see execution and you see assets being created both physically and virtually and the revenue that's now starting to be generated quarter over quarter year over year shows the ability for growth in the business plan that we've put in place. So let me just give everyone. A couple of things to consider here number one.
If you haven't followed we did file an extension with NASDAQ for 180 day extension.
And an extension request for that 180 day extension, we don't have a ruling on that we won't have a ruling on that until later this month, but we are confident that we meet all the criteria for that extension and will continue to work very closely with NASDAQ on the same thing.
We then had a special shareholder meeting because we can't just do this on behalf of the company from a management point of view, we got to align with the shareholders. The shareholders voted in favor of that reverse stock split.
So it gives us the tools that we need to have confidence that if we need to do something we can to maintain our listing status and I won't go back through the positives of that but I will just say everyone needs to understand we are aligned in this collectively together I hold shares in this company management holds.
Tears in this company the board holds shares in this company no. One has sold a single share.
I'm going to repeat that no. One has sold a single share in this company and in fact people have added shares in this company because of the belief of where we're at because of the execution and because of the valuation. We think there is a lot of upside in 'twenty three I believe will show that.
GCI mediation is the next big topic that I'd like to talk about and I know that there has been some time that has passed since the last update we provided.
I have with me in the room, our general counsel.
Our karnes and so I'll ask her to give just a few brief updates on this as well, but here's what I would say we've taken the step of mediation.
I think the outcome of that is yet to be determined but the good news is Johnson controls and the hall of Fame resort and Entertainment company have come together at the table and there is a sense that both sides are looking for a resolution Sarah would you.
Yes, Thanks, Mike.
I think that that is a.
In summary, as I previously stated.
Again in <unk>.
Recent filings there is an ongoing disagreement between our company and GCI relating to the naming rights agreement.
Great Matt and the parties have agreed to proceed with the dispute resolution that is provided for in the naming rights.
And that includes as a first step.
Media with a neutral third party var, we have commenced that process.
Discussions are ongoing and if for any reason the mediation should prove to be.
Our successful then either party May then.
I refer to Q.
To binding arbitration and the CMO.
Thank you Tara for that so we're looking forward to we presented a proposal to resolve this.
I think we will continue to work through the mediation process. We are prepared to go to binding arbitration. Our hope is we don't get to that point, but as I said and I'll repeat the good news is both sides seem to have a desire to resolve this from a productive and positive outcome point of view.
The last thing I'll talk about before I start to go through some of the more specifics.
By our business units is the construction update and I think the reality and the construction environment in everyone is facing this with inflation things are slowing.
Things are getting canceled we are not and we hope to benefit from other projects around the world not just in the United States and certainly not just in Ohio, slowing down or stopping and when I say benefit I don't mean because of those projects not having success I really just mean because that should free up some of the <unk>.
Fly chain constraints around critical construction elements and Thats, what we have been facing all year long, we've been very creative I give a lot of credit to our construction and our project management teams.
But we're also being very prudent about timing of construction, because we don't want to overpay for something versus the loss of revenue by having a slight delay so the waterpark in the hotel or the remaining two assets to be built for.
For phase two as I said, the Waterpark will break ground. This week, which is great news and we have line of sight on all funding as we have said publicly for that particular asset and we will be closing on additional funding over the next couple of months for that the hotel, we have decided to pause.
Until next spring the hotel is a less construction period of time and so we have more time to watch the commodities markets come down hopefully as other projects are delayed or canceled and items start to free up and supply chain constraints start to free up as well. So we will break ground on the hotel sometime.
Late spring as we come out of winter and then we anticipate both of those assets opening in 2004.
The last thing I'd say is the <unk>.
Fact that we have completed assets in phase II right now.
Has been very important but we're working closely with a lot of our third party partners and so you may recall some of the experiences that will be contained in areas like our fan engagement zone are really unique and different third party brands like top golf in Peru, Kettle and switch cookies insurers and others.
And in fact, we just signed a great deal.
With Donald driver to bring his driven elite fitness program here, which is really innovative and.
It speaks to what we need on property, which has an ability to help create athletes on and off the field and help them further their goals.
Both mentally and physically.
So we're excited about those operating parties and operating participants opening and in fact, you should start to see some of those openings very early in 'twenty three with a continuation throughout that entire year.
From a business unit point of view the village.
It has had a lot of success. This year, we built great assets, but recently, we've continued to talk about how do we position the village is the destination.
We were able to host the Ohio Governor here Governor, Mike Dewine, and Senator Curt sharing a few weeks ago I can tell you that they were both.
<unk> by the progress that's been made and there was a lot of positive energy around how the state and community could continue to support what we're doing that kind of support is irreplaceable and so we're very appreciative of the opportunity to meet with both of them and other community leaders to talk about where things are going.
Our stadium, we hosted record number of events in Q3, <unk> and whole Fame stadium record revenue for that quarter as well I think youre going to see those types of events continuing to grow throughout the year in Q4, we have the Ohio High School Football Championships for the state of Ohio being hosted here and we're also.
Going to be launching a brand new winter holiday festival called the winter Blitz.
With more to come on that but really unique offering an opportunity for our community and others visiting to be in to have and enjoying experienced throughout the holiday.
Center for performance are brand new.
Dome destination, we hosted our first events there during <unk> and we've hosted multiple since then Big Wrestling tournament.
Other sporting events. The center for performance is now filled on a daily basis and this is an amazing new asset as we've talked about that gives us that year round capacity that is very much needed.
The fan engagement zone build a bear is open we will be opening shoeless with a soft opening late December brueck hurdle in top golf will be opening hopefully in late December early January as well and then Youll see others switch cookies visit canton and.
And others being opened over the course of Q1, two three of next year, and we're really looking forward to bringing that asset to life and driving revenue in experiences for the destination play action Plaza.
We kicked off that entire area with <unk>.
The NFL preseason game that occurred here on property I thought it was incredibly well received we have one attraction opened we will have another attraction opened the red zone are giant wheel.
Here in a another week I believe is what the construction timeline is saying and then we're going to start to add a lot more outdoor programming and ambiance for the holidays as well.
And then lastly, our Doubletree hotel downtown occupancy and ADR is are up year over year.
The hotel remains in the top 5% of customer service business travelers by the way are coming back on a very steady pace now which is great for us that Monday through Thursday business and it really does continue to prove our synergy model, where we host large scale events, where we have supporting tournaments.
And people just coming in town to visit the destination or the pro football Hall of Fame, they're staying at our hotel, which is driving revenue and frankly driving revenue growth and.
And amazingly enough that synergy model has allowed this asset to become operating profitable within one year of coming out of Covid, which is fantastic. So the team. There has done an excellent job. We've positioned is the right way and we have the asset that will allow that synergy to occur.
We also have.
Had that hotel become the official hotel for the Pro Football Hall of Fame.
<unk> continued to grow the hall of Fame business, there as well from a media perspective lots of new deals being done.
To be announced in the near term, but as I talked about very early on in our company's.
Launch media takes up to three years from the time you create something you develop it you produce it and then you distribute we're now seeing media content all through those phases and so we've as we've said we sold the rights to the perfect 10.
Fox Youll see that Super Bowl week on Fox, which is fantastic National TV, there a lot of revenue opportunity for us. This week launching football have in podcast. This is a really unique video podcast that will include special guest hall of Famers.
And I think will really tell stories that are very different and unique it shows our access to exclusive content can help us in creating one of a kind.
Media content.
When we look at the NFC space, we're still very optimistic about what we can do there.
Are going to be announcing over the next week or two a unique opportunity for fans.
Actually own some type of pass that isn't an FTE that allows for experiences unique experiences exclusive experiences and youll have the opportunity to buy in at different levels and so we think this does take in ftes through the next.
Generation for us and encompasses our business along with making it a digital collectible and something that is usable by the guests coming in.
And so it just really speaks to the breadth of what our media group can and has already done and we're excited about where 23 is going to go there with multiple new development deals in the pipeline gaming.
Gaming of course, you know we launched our second season of a haul Fantasy League, we launched a pay for play service and legends locker room. This is a space where you can go and get the most updated information about your fantasy team and all the players that are there you don't have to go to multiple different websites and try to aggregate. This on your own we felt.
This was a really important tool for the success of fantasy players and again, our fantasy experience is very unique and different in that you can back teams or you can now select your own teams and compete against experts in the industry and so thats done very well sports betting we've talked about I couldnt be more excited about our two partners there Rush Street interac.
<unk> and better.
I think better is going to change the face of mobile sports betting now and forever with mobile betting I can tell you that I have that app use. The app you are not legally allowed to bet currency right now, but they've got a coin based betting platform. It is absolutely what we always talk.
About engaging to the Instagram being able to bet on the next step back. The next run the next play the outcome of a series.
To me it allows the support to continue in a way.
And enhances the way in which I engage with the support that was never there before.
I've had the opportunity on several occasions to meet with a better team I know Jake Paul himself is very interested and focused on Ohio, and we look forward to announcing some activations in the near future that may or may not include Jake and so I'll leave that to your imagination.
We are now also hosting esports tournaments esports will become a bigger part of what we do virtual gaming, we're building onsite virtual gaming as well and so in 'twenty three our plan is to launch that in an even bigger way.
And host large scale fantasy events here as well we've already hosted fantasy events in our stadium at our hotel and fantasy. We think we have a unique environment to host multiple different types of <unk>.
Tennessee experiences.
Lastly, partnerships and sponsorships.
We are clearly trying to maximize each and every category. We want this to be a win win for both sides. We've employed a company called Allied sports, they're working with us to bring in sponsor partners and our media Division, Our gaming Division and of course here at the village as well and so we're being very thoughtful of.
About the types of partners that were bringing in and the timing of those partners in order to maximize the revenue each category has to offer and also to maximize the brand partnerships and the uplift that both sides can experience. There we talked about GCI Im confident GCI will continue Johnson controls will continue.
<unk> to develop they've been a good partner in the past I anticipate the opportunity for us to settle this and move forward.
And look forward to continuing to grow our sponsorships.
<unk> and a very big way in 2023, and we've got multiple conversations going on to that effect right now let.
Let me pause there and I'll turn it over to Ben to take us through the financials from Q3.
Thanks, Mike and good morning, everyone.
Moving on to financial results and as Anne mentioned earlier, we filed our third quarter 2022 Form 10-Q post market yesterday that document is available on the SEC website as well as our Investor Relations site.
Third quarter <unk> revenue was $8 7 million, which represents an increase of 149% from the same period in the prior year and an increase of 223% on a linked quarter.
Revenue growth was primarily driven by higher event revenue, Tom Benson Halloween Stadium and significant increases in operating revenue at our Doubletree Hotel, while sponsorship revenue was down from the prior year due to the previously disclosed dispute with Johnson controls revenue growth and diversification have improved.
Third quarter, adjusted EBITDA was minus seven $4 million.
The company posted a net loss of $11 $1 million, partially offset by the change in fair value of our warrant liabilities, which increased by $1 8 million.
Under U S. GAAP the fair value of these liabilities will decline and income will improve the company's stock price declines the company would experience the opposite effect when our stock price is higher.
While this line item in the financial statements will vary based on the Companys stock price. It does not impact our cash flow from operations cash and cash equivalents or liquidity for all prior and future periods.
Moving to the balance sheet, we finished the quarter with a cash balance of approximately $33 million.
Compared to $18 million at the end of the second quarter.
Values are inclusive of our restricted cash balances. The companys primary usage of cash continues to be driven by construction expenditures with approximately $31 million spent during the third quarter.
This cash usage was offset by proceeds obtained from various financing instruments during the quarter.
Okay.
Our net debt balance increased to $181 million compared to $123 million at the end of the second quarter. The increase in notes payable was primarily due to principal amounts related to a $33 $4 million pace loan related to comments on holiday and stadium and $12 5 million raised from the city of <unk>.
Stark County, and start counting community foundations. These.
These dollars will be used to fund destination infrastructure and site work both areas that traditional lenders do not typically provide financing for the.
The financial support provided by the local community reflects our common goal of driving significant economic impact in any area.
I'd like to go.
A little bit deeper on the detail on financing as we've continued to make significant progress subsequent to quarter end.
In October the company closed on a seven 5 million dollar.
Tourism development district financing through the state of Ohio Enterprise Bond Fund.
We have previously highlighted we are in a tourism development district that allows for the collection of additional sales taxes in the district and support future development <unk>.
Additionally, we closed on the final components of the capital stack for the fan engagement zone, along with $50 million financing necessary to begin construction on the indoor waterpark the marquee asset of our world class destination.
Similarly, we announced the restructuring of a portion of our balance sheet extending maturities, while securing lending commitments that will allow us to complete construction of all remaining phase III destination assets.
As you can see we've been laser focused on building a capital structure that allows the company to reach its long term financial goals.
In total this year, we've completed financing tracks transactions of approximately $180 million as we align financing needs with construction scheduled just as importantly, we have maintained a weighted average interest rate of seven 4%, even as credit markets tightened as evidenced by the rising interest rate environment.
Our ability to complete these transactions at favorable rates.
Thoughtful and pragmatic approach is allowing us to position our balance sheet for future growth.
Likewise, our ability to secure this critical financing and supported by our largest shareholder industrial Realty group and all of the active stakeholders throughout the local area and the state of Ohio.
This continued support will help drive long term success of the company.
For the rest of the fiscal year, we expect similar seasonal trends to last year for revenue and expenses.
Looking to guidance for next year.
We're expecting fiscal 2023% revenue growth in excess of 75% when compared to 2022.
Adjusted EBITDA is expected to improve by 60% driven by our focus on monetizing existing and newly developed physical and virtual assets.
The company is intensely focused on expense management, and staying lean where possible while at the same time balancing the need to invest to support our continued growth.
We expect increased diversification of revenue and EBITDA across multiple streams with each one driving synergies to support the exciting ecosystem, we're working so hard to build.
In closing, we remain committed to maintaining a balance sheet that provides financial flexibility through our growth phase to deliver long term value to all of our shareholders finally, and as you've come to expect we will continue to provide transparent and timely updates to our shareholders as we move ahead now.
Now, let me turn it back to Mike who will provide some closing comments. Thank you Ben a great update and really when you look at the numbers in Q3 and you look at the growth year over year, you have to walk away very encouraged and Vince's point about staying laser focused on cost is exactly spot on when you think about growth for next year.
Revenue at a 75% projected level EBITDA at a 60% projected level you don't usually do that in a startup company environment you have to add resources you have to construct you have to invest in marketing and sales we're doing all of that but we're doing that with an eye towards being business savvy and pragmatic around matching expenses.
And lowering expenses versus revenue growth.
What are the key takeaways for me for this quarter number one we have the financing that we need to complete phase III, that's what everybody's been waiting to hear that's what I've been waiting to tell you you have it. So that's a big takeaway you should stand behind and feel very comfortable about.
You not only have the financing you have project completion guarantees from our largest shareholder you have community investing with low cost longer term loans very committed to the success of this project. We have also worked as Ben stated very hard at realigning or restructuring almost our balance sheet working.
With IRG to extend debt so that our debt profile matches, our revenue profile. So that there is no issue about or worry about can we repay debt at the timing that it comes due.
The shareholder support the largest shareholder support that we've gotten is unprecedented and I would say in gambling terms going all in they have committed that this cannot fail. We are committed as a management company that we will not let it fail and that we're excited about the growth, but we're excited even more about the future.
When I think about the hall of Fame village.
Revenue is now coming from multiple different areas. When I first started in 2018 predominantly coming from sponsorship now it's events and event growth now it's sporting tournaments directly created by us and revenues generated by our rental of our assets like our stadium liquor forever loan sports.
Looks like our center for performance, we now have full year round revenue coming in for different types of events with an indoor asset. We have attractions that are going to generate and are already generating revenue, we have food and beverage but is generating revenue we have our hotel, but is now growing in profitability.
Generating great revenue and we now have multiple tenant leases, where we either have a base rent or a percentage of revenue coming in.
That only gets stronger in 'twenty three so the diversification of revenue from our village point of view is very exciting from a company point of view, it's even more exciting I want to reemphasize. The conditional approval. We received from the Ohio Casino Control Commission was Paramount to the success of our sports betting efforts.
Two partners. We've selected are great at what they do we think as I said better is going to revolutionize the way sports betting is done mobily with micro bedding is the primary focus and so we're encouraged in 23 by the revenue uplift that we will see in the bottom line contribution that sports betting will may.
And also the others.
Pieces of our.
Of our gaming industry as well our gaming unit media is now starting to sell we have a very robust pipeline of assets that we are either developing signing deals with or getting ready to sell for distribution. So I think 23 will be a breakout year for media.
And we're creating exceptional experiences across all of our platforms and I think when you create exceptional experiences both physically and virtually to host and entertain and more importantly engaged audiences.
You have to believe I, certainly do that revenue growth and bottom line contribution will start to exponentially grow I've said I feel we're undervalued. We are undervalued, we will correct that in 'twenty three maintaining listing compliance is important but we will be smart about how and what we do to do that and so investors.
Should take that as a net positive.
And by the way, we're already thinking about phase III and the planning of phase III for the village destination here. So I want to thank the team I want to thank our shareholders. I know 22 has been a bumpy road from a market point of view from an inflation macro point of view, but this company continues to execute.
And show that it can grow in every way that we talked about over the year and show that it can execute and obtain the financing and the financing doesn't just come people don't just give you money. It comes because of the belief in the strategy and I think the execution by the team chose the strategy is a winner.
Ill now stop there and open it up for any questions that folks attending the call may have.
Thank you now begin the question and answer session.
Ask a question press Star then one on your thoughts around Paul.
Using a speaker phone please your handset before pressing the keys.
So all of your questions.
We will pause momentarily to assemble the roster.
First question, John Excuse me, Jack Vander Ark Maxim Group. Please go ahead.
Okay, great. Good morning, Congrats on the continued momentum.
Strong execution.
It's yeah, it's fortunate to see you guys continue to execute in that type of environment, So great to see Michael.
Michael <unk> third quarter results.
Revenue really uptick this quarter.
Biggest driver of the revenue it looks like it was uneven.
Can you remind us.
What the key drivers are of those events and looking forward what kinds of events are you excited about that are also key drivers of revenue.
Yeah. Thanks, Jack Good question and I appreciate it.
Appreciate it Q3, obviously as highlighted by our <unk> event on property. We did this year take over there is an event.
Part of that in <unk> that the hall of Fame is typically run called the concert for legends.
We took over that concert this year journey it was very well attended.
Very profitable for us as well and so that we can represent from hotel stays to food and beverage rental for a center for performance.
Other assets, creating uplift for rides on our attractions or visits to Starbucks or other things that have been open that's a big weekend for us outside of that you had the Usfl, which I hope everyone saw a nationally televised two weekends in a row the playoffs and the championships being held here absolutely fine.
Nominal events for us our hotels were full for two weeks, our restaurants were sold for two weeks.
Yield rentals the percentage of the ticket revenue that we got the concession revenue that we get and so a lot of uplift by those events, but frankly there.
There is direct revenue and indirect benefit the amount of national exposure that the village Canton, Ohio, and our company got by.
By Fox, providing that was in the millions of dollars worth of what we refer to as earned media. So we looked at that as a very big win we had women's football Alliance Championships again, we're diversifying the types of entertainment that we have Dave Chappelle is a comedian was here so a ton of differences and events. We also added sponsors.
The hotel.
Revenue was up as we talked about and so we're diversifying where revenue is coming from but a lot of Q3 was driven out of that event cycle. What I can tell you going forward. We have now a much more robust plan around our event calendar maximizing all of the assets indoor and outdoor from everything ranging.
From private events, and weddings and conventions and meetings to large scale football non football sporting events that we hosted here played here and some events that were going to create ourselves that I won't talk about today, but that will generate even greater revenue opportunity for us.
Of course, we will always continue to balance the calendar and I think our team is starting to do that now with assets. The expanded asset base that we have and then as we continue to grow events sponsorships, obviously grow right along with those sponsors get very excited about the number of events you have and the opportunity to showcase their.
Product or service at those events and so I think what we've done is set up a really unique venue that has a lot of adjacency in terms of assets restaurants experiences indoor outdoor gaming those kinds of things that will attract even more events over the course of the next year and for years to come.
Got it that's helpful. A lot of helpful color there Michael I appreciate that.
And then next question just.
I also appreciate the color on <unk>.
Construction roadmap.
Sounds like you expect the new hotel in the water park to both be opened for business in 2024.
Great can you just share your perspective for us on the value of the water Park and what it brings to the village from a strategic perspective.
Absolutely well look we are in Ohio, and if you took a look outside the window today its pretty chilly.
Gloomy and so I think the region itself I can't tell you the number of people that come up to me and say we have needed something like this for a very long time, a high quality entertainment in a box.
A destination and team or our water parks in Ohio.
Are frankly quite profitable and well attended Youre talking about assets that generate usually between I'll call. It 800 to a 1 million five attendees per year and so for us. It's a strategic attendance driver the revenue and EBITDA associated with that asset are very strong maybe the strongest of any of the app.
So it's we're creating.
The hotel allows for that stay in play kind of environment to occur it already is happening with our downtown hotels, just 510 minutes away and so when we built and I've done. This a lot in my past when we build these two assets now you have a more complete.
Collection of experiences between the pro football Hall of Fame outdoor attractions indoor gaming sports betting different big large scale events concerts comedians sporting events.
And indoor water Park, you can now really bundle a lot of these experiences together sell them as packages. It enhances the length of stay and the repeat visitation when those things occur the dollar value to the company goes up the longer people stay the more they planned spend and enjoy themselves the more they come.
Back and do the same thing so it's a direct revenue driver that we're excited about in the tens of millions of dollars on an annual basis.
Both from revenue and EBITDA, but also it's an indirect driver of attendance for all the other experiences which will create a larger linked to stay in a greater repeat visitation and honestly coming from Ohio I can tell you people live for these kinds of experiences and there's six months out of the year, where theres just not a whole.
Lot to do you either have to fly south or west to escape and get into entertainment experiences. So we're excited about the waterpark in the only football themed water Park in America. In fact, I just visited Disney This past week and walked with their waterpark operators such high quality assets. They have they're a fantastic company.
It was great to see a lot of what we're doing is in line with the very best out there in the industry, so more to come but exciting to get the groundbreaking underway. This week.
Excellent and then if I could just get a couple more questions on one last topic.
Take care.
License from Ohio, Ohio Casino Control Commission.
Just to clarify are you still waiting for an official license <unk>.
Help us understand what else is left to do besides just waiting for Jan one.
Now you got to start getting activity.
And then also do you have any initial expectations for your sports betting operations, whether it would be.
Wagers number better place gross gaming revenue whatever you could share there would be helpful. Thanks.
Yes, not anything we can share today about the expectations I think we have worked with our partners on pro forma for those things I can tell you that I am excited about the opportunity, but not prepared yet to share the expectations around numbers, we will be the only retail sports book in Stark County.
Which is a fairly big county in Ohio.
And the immersive environment that we're going to create there we haven't talked about the food and beverage side of this experience yet it's going to be really high quality and one of a kind and I'll tell you a brand that people are going to be excited about I know I am.
I think what youre going to see.
From a bedding point of view is Ohio is very favorable towards this and the rules and the taxing and everything that has been set up is.
It is really exciting to the sports betting partners one thing to note. When you when you say congratulations on obtaining the licenses. Thank you very much for that but I don't think our shareholders really understood that there were only a few at large licenses to be obtained.
<unk> the sports franchises the sports tournaments, we're already guaranteed sports betting licenses and so I think in total there was 25 roughly that were available. We are the only one that I know of right now outside of those guaranteed licenses that was approved by the state of Ohio, which really goes to show you how it.
Impactful what we're doing in this community and in this state is it's an economic driver not only for our company, but for our region and I think the casino, Ohio Casino control Commission saw that value that and wanted us to have those licenses now to your question about conditional approval, yes, it's conditional approval because.
As you go through the process you still have to meet.
The stipulations around the rules and you have to show that the experience and the security of the experience and everything else. We have absolutely no concerns about that at all we're working very closely with our partners.
You can imagine from a mobile technology point of view they want to make sure that guest data and information is very secure so it's the you have the approval. It's just conditioned upon all of the things. The checklist items that you have to have in place just like launching any new business and our partners are all over it we're all over it.
So we expect come Jan one we're ready to go.
Yes, I would just add to that Mike.
Our retail sports betting operator partner has also received conditional approval at this point.
As far down that track and continuing to work very closely with the commission.
First of all.
Excellent.
Really appreciate the color guys. That's it for me thanks.
Thanks, Jack have a good day.
Thank you guys you have a question. Please press Star then one.
Our next question will be from David Maher singular research go ahead.
Hi, good morning, Thanks for taking my questions and again congrats on the.
Good momentum.
Just one quick little housekeeping either one.
Sports betting side.
It seemed pretty clear in the press release.
Online sports betting with the railroad we're gen. One the retail also be ready to go Jan one.
No. That's a great question, so here's how I would think about it retail will be ready to go in the context of engaging with guests in.
Showing them the kind of experience that roche will be able to offer and bringing them into their ecosystem signing them up offering opportunities.
For them once the retail sports book is open we've just completed the core and shell of that building.
I anticipate the interior fit out to start in the very near term.
I'm guessing it's going to be Q2 before it'll be open, but we will keep everyone apprised of that and I know rush and Hall of Fame Resort Entertainment company are incredibly focused on getting this open and having this experience live for people to enjoy as quickly as possible.
Okay. Thanks.
And then just.
More of a process question around <unk>.
The GCI situation is there are there any kind of like heart timelines in terms of medium term completion.
Arbitration completions, so that this thing doesn't drag out forever.
Well, yes, I think there are look the reason why we went down the mediation path. So that we could have a third party and by the way our mediator very experienced mediator has done over 4500 mediations.
Understands what we're dealing with and look when both sides.
Have a desire to resolve something it can get resolved. The reason the whole reason for the dispute resolution mechanism that we had in our contract is.
If there is a difference of or a difference in perception around how the business has progressed or not progressed and I think that's where we've been there what was publicly.
<unk>.
Johnson controls, who said they didn't feel as though we met our financial timelines, we absolutely do we have all financing in place.
Our contract allowed us to have a day for day extension, while Covid was going on and so we're working very professionally and amicably with them, but it is a very confidential process. What we've said publicly is basically what we can share as I said, though I do anticipate getting a resolution around this and I think both side.
<unk> are going to work towards that we've made a proposal the mediator in Johnson controls has that we're expecting a response in the very near term and then we'll go from there.
Yeah, David I would just add to what Mike said.
Sure you can appreciate.
So does the underpinnings that mediation is that it is a confidential process. So while the process plays out we're somewhat limited in terms of what we can provide in terms of interim update but certainly as a public company.
And at time, when we have more concrete.
Concrete updates to share.
In that context.
Great. Thanks.
But just.
Just kind of to wrap that up.
You guys are still a little bit held back.
In terms of your ability to realize sponsorship revenue.
Phil This is resolved is that an accurate statement.
No.
It's a good question, though because it's one that helps us clarify for folks we're actively pursuing.
Sponsors in all categories.
And part of the strategy has always been as the category presents itself and we can grow our business to really.
Take full advantage of the category in terms of monetization we will as an example, this year, we added forever lawn as a sponsor of naming sponsor of our sports complex forever on sports complex.
10 year $5 million deal.
Which was a very big deal for US we have other sponsors that are deep down the path of <unk>.
Conversation and opportunity to work with them I think what with Johnson controls they represent several categories of business for us and so we still have the opportunity to look at sponsors that could be in those categories and we are.
As responsible stewards of business, we always need to do that and build a pipeline of potential partners. In every category. Even when you have existing partners and so we've continued to do that.
I can't really comment on how it would work if we were to get a sponsor in similar categories of Johnson controls that would have to also be part of the mediation process and we'd have to understand how that would work in the context of the existing agreement.
Great.
And then just lastly.
And the last quarter call you guys had guided.
A little bit more precisely.
To revenue in the $20 million range, an EBITDA loss in the $20 million range for the year.
The guidance is a little bit more opaque and I understand with.
Yeah.
Market conditions in that.
Labor conditions and all of that is.
Is there any way that you guys could.
Fine tune that a little bit or just reiterate or let us know what your thoughts are with regard to.
A comparison to the guidance in Q2.
Yes, Dave this is Ben.
I can cover that one for you. So yes, that's where we got a pretty good presence.
Just a little bit because of seasonality here in <unk>. So.
We expect it to have a couple of more events lined up for Q coming off what you see is a very very strong third quarter.
So slightly below that and Youll see similar to an uptick in what we had in <unk> last year.
Put us somewhere between 17 and high teens this year.
For full year, and then of course as we look to next year very strong growth in 'twenty three.
Versus 2002.
Yes, the only thing I would add I think that's very well said.
You sort of said this I think as we add new assets and as we start to diversify where our revenue comes from.
Selling media selling partnerships.
Creating bigger events.
These things are coming.
On a more AD hoc basis now as an example, our center for performance. We've now been approached by multiple outside entities to host bigger events in there that we couldnt have anticipated two weeks ago, even so it's a very fluid and dynamic environment that we're facing.
Im encouraged though about inflation moderating I am encouraged about the fact that consumers are still spending on experiences.
Even though they may be laying off the big ticket item purchases and so for regional destinations and great experiences virtually in terms of gaming and media I think that there is going to be a net positive for us as we move throughout this year and into 'twenty three.
Sounds great guys. Thanks, so much for taking the questions and again congrats on the great momentum and progress.
Thank you. Thank you.
Thank you.
At this time I would like to turn the floor back over to management for closing remarks.
Thank you we do have a few other questions that I'm willing to share with the group.
First being.
Coming in saying or asking rather why are you using the ATM at current prices can you give a little bit more of an explanation surrounding that.
Yeah, I'll just make a couple of remarks member and you should also comment on this first of all when you say using the ATM, let's be clear a little over $2 million in the quarter from our perspective is not using the ATM.
It is there to help with the equity that's needed to entice other forms of financing.
We did that on a very small scale and we will continue to do that if needed right now we're trying to be pragmatic about engaging the ATM because of the pricing, but it is there is a vehicle to allow us to manage the business more strategically and so while we used it we used it minimally over there.
Last quarter I don't know if you want to add any yes, I'll just add I mean, Mike Mike hit it when we add the depressed stock price with you right now we want to be really thoughtful dilution.
Away from using the ATM, where at all possible.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Yes.
Okay.
Thank you.
[noise].
Okay.
Yes.
Okay.
Okay.
Okay.
Yeah.
Yeah.
Okay.
Okay.
Yes.
Yes.
Yeah.
Yes.
Okay.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Yes.
Great.
Okay.
Yes.
[noise] [noise].
[noise] [noise] [noise].
[noise] [noise].
Yes.
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
[noise] [noise].
Okay.
Okay.
Okay.
Okay.
Yes.