Hall of Fame Resort & Entertainment Company Q3 2023 Earnings Call

Good morning, and welcome to the Hall of Fame Resort Entertainment Company third quarter 2023 earnings Conference call.

This conference call is being recorded and all participants are in a listen only mode. We will open the conference up for questions and answers following their prepared remarks, I will now turn the conference over to Anne graphics.

Executive Vice President Global marketing and public affairs.

Good morning, and thank you for joining us for our third quarter 2023 earnings Conference call. Our latest press release and supplemental slides are posted yesterday evening. After market hours. These documents can be found in the Investor Relations section of our website, which is H O F. R. E C O dot com.

After this brief introduction, Michael Crawford, our President and Chief Executive Officer will give an update on the Companys strategy and outlook Benjamin Lee Chief Financial Officer will then provide analysis of the quarter's financial results.

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 the company uses non-GAAP results to evaluate performance internally as detailed in the press release.

I will now turn the call over to Michael Crawford Michael.

And good morning, everyone. It is a it is.

Really nice fall day here, Jim in Ohio soon.

Great to have the opportunity to update all of you on what's been going on with the company over the last quarter and as we think about going forward.

We all know November 11th was veterans day. So we had a very nice day on campus at the village celebrating and thanking our veterans for their service both current and past.

There's been a lot of things happening over the last quarter and progress at the village some of the key highlights.

I'll start with attendance and.

Good very interesting for us on the attendance front, we've implemented a new tool sort of a geo tracking AI tool that allows us to understand guest arrival and departure patterns and also flow of guest traffic bullets on while they are on property as well and I'll talk a little bit more about that in a moment, but what we've realized is that attendances grew.

Boeing and we're actually exceeding our attendance forecast, which is great for us because it offers us an opportunity to monetize against growing attendance in the future.

We hosted multiple large events youll recall that the Usfl Championship game was played here I know many folks are still very curious about Usfl and XFL merger I can tell you that I am hopeful that we will play a role in that league in some way shape or form but as of now we don't have any relevant updates I expect to have an update.

In the very near term and of course as we do we'll pass that along to you as our shareholders.

We also hosted a variety of different types of events showcasing the diversity of events that we're striving to achieve here from our kids BOP event of course, <unk> the NFL preseason game.

The concert for legend Zac Brown did a fantastic job. We also recently hosted comedian Bill burst. So a lot of different types of events in the event slate is growing and we're continuing to look at not only sport related but non non sport related events to build a slate of events for 2024, our plan is to.

Prior to the end of this year announced a more robust calendar for 2024 as well, allowing our guests the opportunity to plan for the events that David so choose to visit and the experiences that they would have.

Talking about visitor growth, we are experiencing strong growth in visitation.

Our focus is now is people are coming to give them opportunities to understand what the village is about prior to arrival so that they can plan accordingly.

Also market to them, while they are onsite and create movement and opportunities for guests to experience not only the thing that they came for but the multiple other types of experiences that they can have all their here be it right experiences food and beverage interactive sporting experience those or been experiences and then of course, we continue to add.

To the types of things asset wise that our guests can choose.

Choose to experience while they are here as well we are.

Added new themed locations in ice cream and cookies and our solution location in Pizza oven recently opened we've also added multiple new office tenants and our constellation Center for excellence.

Those things represent lease revenue for us in revenue in terms of building out the facility, but they also represent uplift as those tenants come to life as those office tenants are present Monday through Friday for different meals on property potentially hotel stays and visits to the different events that were.

Hosting.

We're expecting to open later this month, our Donald driver driven elite experience remember there are two different business opportunities that we've signed with Donald.

One a retail facility fitness facility here in the constellation Center for Excellence and then also this higher end training opportunity that's driven the <unk> concept and our center for performance in both of those we expect to be opening in the next month.

These nut shop are also expected to open in the very near term probably within the next three to four weeks and so you can see the differences in experiences that we're creating for our guests and the opportunities for them to stay and extend in play.

There were five relevant key priorities for Q3, and I would say not only Q3, but this is the focus for our team our team did a great job I think in executing as you will have seen in our Q3 numbers. We did grow revenue and we also balanced that revenue growth with.

With expense growth and so our goal always has been to spend the dollars where they're going to have the greatest impact for us and we continue to manage the cost base.

In terms of what we're spending and how we're spending and also our staffing models to be most efficient.

We also expect to close the remaining financing required for the completion of our phase two assets in the very near term, but the point I'd like to make here is related to the cost base and as you may very well understand that every time, we close new financing there is cost associated with that there are legal cost or financing cost place.

<unk> costs and so those types of expenses I expect to not only be reduced in the coming.

A months and years, but to actually go away because we won't have the need to consistently finance new assets and so that will also contribute to our bottom line not having to have those types of expenditures.

We've had approximately one full year of operation through Q3, as a company and as I talked about this new attendance intelligence is showing us that our model is really working creating events, creating new opportunities for our guests to come and experience assets.

And we're excited about what's to come obviously are our waterpark is in full swing and in development and our onsite hotel is about ready to break ground. The reason that hasnt broken ground, we needed that space, it's a very tight corner in the village there the northern end, we've needed that space as a lay down area for all of the construction equipment in.

And all the materials for the Waterpark and now that that is coming to an end in terms of the outside core and shell being completed the actual work will start on the inside of that facility and hopefully continue to allow us to build the hotel.

Site just adjacent to it.

We're getting smarter at.

How guests are arriving and the timing of those arrivals.

By event and for a typical Friday night or a Monday afternoon.

It's allowing us to really evolve our staffing models and our expense base as well and so as I've always said it takes time to stabilize a operation I think we're actually getting there sooner than what.

<unk> is really <unk>.

It is too over the last year, but I think the influence that we're having now over the guests and as they arrive and expanding their thoughts around what the village can represent are all very important aspects of driving growth for the company.

Yes.

We are looking at increasing.

Efficiencies in every aspect we brought on not only in terms of expense management, but in terms of revenue growth. We brought on someone who has a lot of experience in revenue management, so things like packaging.

Pricing all of those types of things I think we're getting more efficient at that and we're seeing that in the context of revenue as well day to day in the event category as well.

Many of our assets have been completed and we are continuing to evolve our tenant mix. There are a lot of tenants that were in discussion with for the remaining boxes. The good news here is there's not a lot of remaining boxes, but we want to have a more curated experience and so we're really focused on putting the right tenants to come.

<unk> the ones that we have in place.

And we think that will have a good set of tenants over the next couple of months to talk about as well.

Synergy has been a big focus for ours continuing to influence as people arrive what they do people are coming for an individual experience, but we're now seeing them come earlier stay later theyre, having right experiences at play action Plaza their dining shopping and so thats a very good thing for us because.

We want to create the synergy between the assets and between the experiences for guests to expand and have unique offerings for them to enjoy while they're here the.

The double tree is a great example of that as we've continued to grow onsite events onsite business travelers etsy.

Et cetera, the double tree has continued to stabilize and probably even more quickly than what I had hoped for coming from the hotel business that does take typically take three to four years as well I think we've gotten there in a couple of years and it's now profitable asset.

It also ranks in the top from a financial performance standpoint at the very top in this region and more importantly, it ranks nationally from a customer service point of view and so I've always said everything we do it's important to create assets that are going to drive great experiences and memorable experiences for our guests to enjoy I want to congratulate the team.

Team there. They recently won the brighter together care award by Hilton, which is the award that recognizes the outstanding service and guest experiences by category or brand that they have in their family. We want that for the Doubletree category Snap salute fantastic achievement and we continue to be in the top service categories for them since we've.

Been open.

The second thing that we talk about a lot and I've talked about even on the last earnings call is restructuring our balance sheet.

We've had to make over the last three years decisions in terms of.

Equity offerings in terms of the type of debt that we brought on to finance each asset individually in a very difficult environment, starting with the global health pandemic, but moving through an inflationary environment Wars a lot of things are influenced how the lending environment has continued to evolve and frankly tighten up and so we <unk>.

Want to make sure that our balance sheet is structured in a way that it allows us for the right runway to stabilize the business, but also sets up long term success are good example of that focus in Q3 was the restructuring of the double tree.

Capital stack.

We looked at the senior construction loan there it was maturing we talked to the lender in every bank, we reduce that senior loan amount.

Reducing the interest rate and we also extended that maturity to be more favorable for us, we offset that reduced loan there by adding other really favorable financial instruments the property.

The pace of lending that we do the tourism development district bonding that we do we added small chunks of that to the hotel cap stack.

Allowing us to have a much more balanced sheet, there and also allowing us to increase.

The opportunity for us to drop more to the bottom line.

The refinance and the structuring of assets.

Really important for us and it is something that the team will continue to focus on not only were they doing it in Q3, but over the next couple of years as I talked about.

We have brought on a consultant that will also help us in that effort, taking a look at the types of debt that we have and then also thinking through how do we extend those or sort of remodel those.

To give us that better balance sheet profile, then I'll talk a little bit more in his remarks about the process that we're working on with the Waterpark in the hotel.

The public debt financing and how that's working to date.

I will say that that has taken a little longer than what we hoped but it is the right type of debt for us and so the process. While it has to go through the legislative process for approvals and it takes a little longer it is well worth the wait.

That we get the right type of debt profile in those remaining two assets.

We did do a small equity raise.

We took down a portion of our existing shelf registration or previously talked about at the market offering.

And we did that for a few reasons one it allowed us to go back to institutions and increase their ownership in the company to it provided a little more liquidity in the stock the volume and the stock was trading.

At a very low volume after a reverse stock split youll recall, we needed to do that reverse stock split at the time to meet NASDAQ trading.

Requirements.

And while I know that that was difficult for some people to understand it was absolutely necessary for our company to have the opportunity to remain on the NASDAQ in court all of our shareholders to have access to that indices for trading purposes, and so the offering helped us increase the volume in the stock as well and provided a small chunk of.

Of additional equity for the company.

Yeah.

We are aware that we do have a complicated capital structure I've, just talked about that and strengthening our balance sheet and improving our financial stability is mission one.

Not only for the company, but to increase the types and profile of investors that we bring into our company. Both today and going forward. This is a company that is growing I think we're demonstrating that quarter over quarter year over year, but it takes time for real estate for media for gaming to all have the runway for growth till it can.

And be stabilized and so our stock is not in need of traders, we don't need day traders coming in trying to trade in and out of the stock we need investors, we need people, who understand the business model by end of the business model and understand that over time, there's going to be a lot of value here I think we're trading today.

Low asset value.

And there are a lot of reasons for that obviously the markets are in stress as well, but this is something that I feel very strongly about in terms of attracting the right types of investors into our company.

Thirdly, we are identifying the right deal and business partners.

<unk> vertical is a good example of that while it's still in early stages in terms of our pipeline development. We've brought in partners like Brink's television and we've actually produced.

<unk> produced and distributed multiple episodes of the Gulf Coast. This is a really cool show that talks to the.

Aspects of being a hall of Famer the sort of secret sauce. If you will as to how these greatest athletes to ever play professional football got to where they are at it also highlights our access to unique intellectual property to create media content like that and so.

A partner like Brink's, a partner like reach television.

A partner like Amazon Prime distributing a show that we have right now a dock your series out called NFL.

NFL Alumni Academy next man up.

I'm very proud of the fact that that really showcase the hall of Fame village it.

It also shows if you watch it and its a great show talking about these kids, who didn't make an NFL team and the sacrifices that theyre, making in training and developing and continuing to stay sharp so that if they get their chance to be called up theyre ready for it but it shows how far the village development has actually come this with season two of them.

That show and there was a lot of dirt.

Around in Canton and now it's a lot of buildings and experiences. It also shows the synergy right because the show was being filmed here on campus and Tom mentioned halting stadium. The athletes were staying in our hotels. There are a lot of meeting rooms being rented a lot of catering and so there was a lot of uplift created by that show not only from a revenue.

Point of view, but from a brand marketing point of view that you simply can't buy on a prime streaming channel like we have today.

Sports betting.

<unk> continues to be in line with our expectations.

I think theyre doing it no pun intended better than most in that category of online sports betting.

The micro bedding has been their focus or that prop betting, but they've now evolve their model to that more mainstream type of bedding as well and theyre seeing growth quarter over quarter, and we're really proud to have them as partners.

And we're also benefiting from the fact that we took a ownership stake in the company and so as they expand and achieve residency in multiple different states by gaining access to the licenses to allow for their platforms to exist in those states. So do we buy our ownership stake.

On site, we're looking for those retail partners, we're opening new experiences we're having discussions.

Discussions as I said earlier with many meaningful partners that will allow us to curate a great experience a differentiated experience here in the village versus in other places that you may visit.

One key learning is onsite sports betting.

It's the reality of.

Mobile betting versus retail betting and what we're seeing in the state of Ohio, which is consistent with what's being seen across the country mobile betting is just dominating the actual space, 90% of beds are coming through mobile betting. So 80 plus percent of revenue is also coming through mobile betting that's not to.

Say that our retail presence wouldn't benefit us we're in discussion with several partners that I think would be really great for us to have here on campus and partners for the company.

But the fact is this is more about an experience than it is about significant revenue growth for us we expect the revenue growth to come through mobile and we're going to continue to focus there as most of you continue your focus on using that platform as betting I think retail wise. We are different it is interesting we are seeing some retail.

Sports betting operators leave the partnerships that they have in Ohio.

It is a it is a fragmented group between sports franchises casinos <unk>.

And some of those don't have year round attendance some of those don't have attendant.

Attendance, all day and into the evening to have them for special event.

That's where we're very different in our business model. There is always something going on at our destination, they're always visitors here 365 days and so that's our focus looking at a great partnership that we can implement here at the village that we can add value to what they do and they can add value to our guest experience.

Sponsorship deals we did eight new deals in Q3 totaling over $1 billion of new value to the company.

That's very impressive again in a difficult environment, where marketing dollars from companies are tightening in terms of their spending you see all across the country in the world frankly companies cutting back on labor cutting back on spending because of the inflationary environment that we're living in.

But we've recently announced in Q3 and at the earliest in Q4, some significant partners Piaggio Coke, Jim beam, Ohio Lottery, a lot of these partners not only enhance our capabilities in terms of the guest offering but again drives significant revenue for us long term to the bottom line.

I know one thing that is on everyone's mind I get a lot of questions. About this is where are we at in the Johnson controls arbitration process, Here's what I can tell you. We finished the arbitration process in early October.

There was a three arbitrer panel, we presented our case Johnson controls presented theirs.

Expect to have a ruling on that by the end of this month.

Other than that I don't really have any updates I'm hopeful based on the case that we put on that we will receive a favorable ruling.

As I've said before what we were in the rate we were good partners to Johnson controls and I think.

Their termination of the agreement was wrong, but we'll leave that up to the arbitration panel to decide and as I said, we will have a decision by that by that panel by the end of the month.

The fourth thing is we continue to work and develop new assets. The water Park has been in full swing. This year, we've been very lucky with weather.

That asset will be completely enclosed by the end of the year, but we've also been able to parallel path. Some of the water work development on the inside which is unique we've worked a lot with our contractors to be able to start that work and so we're still targeting a Q3 opening of the water Park next year I talked about the hilton's tapestry starting very.

Very soon.

We'd like to believe that we can open that on or around the same time of the waterpark. The reality is it's probably going to trail that by a couple of months.

But again, we needed to slow that development down so we had the appropriate area beside the waterpark for laydown of materials and construction equipment.

The last thing I would say that we've done is focus on unique guest experience.

We want to put together an itinerary for guest we don't want guests to come in for an event or come for a dinner, we want them to come stay in play and so we talk a lot about unique experiences, but we also need to think about how do we communicate those and how do we make those easier for our guests to access.

So we hired a new position as I said in charge of revenue growth optimizing pricing up in optimizing packaging opportunities and really helping us think about growth and synergy between all of the assets that we have to sell in for our guests to experience. The other thing that disposition is helping us do is build our concession business.

This and our merchandise business, we have a small merchandise business that I'm hopeful can grow over time, meaning selling shirts, and hats, and hoodies and different things like that that we've got a really unique concept and brand and we want to be able to monetize that and so we're hopeful that as we create more unique experiences more guests come.

As I said, we're seeing the attendance growth in that attendance growth is leading to revenue growth and we're managing our costs accordingly.

I'll now turn it over to Ben and have him take you through our financial review.

Thanks, Mike and good morning, everyone moving on to financial results.

Third quarter total revenue was $8 7 million, which represents an increase of 8% from the same period in the prior year.

Third quarter revenue growth was primarily driven by increased event in rental revenue at the hall of Fame village and higher operating revenue at our Doubletree Hotel.

Third quarter, adjusted EBITDA was minus $5 5 million compared to minus $7 8 million in the same period last year. The change from the same period in the prior year was primarily driven by decreased operating expenses related to lower event costs and reduced sponsorship expenses.

We continue to gain efficiencies and improve profitability as we work to reach stabilization.

The company posted a net loss of $16 4 million in the quarter interest expense increased to 6.0 million, resulting from higher debt balances and lower capitalized interest as assets are placed into service.

This was partially offset by $1 3 million in other income representing a combination of the change in fair value of our warrant liability and interest rate swap.

And the gain recognized on the sale of certain property.

Moving to the balance sheet, we finished the quarter with a cash and liquid investment balance of approximately $12 million compared to $29 million at the end of the prior quarter.

The company's uses of cash it was attributed to operating activities already highlighted and construction expenditures, which totaled approximately $17 million during the quarter.

Our net debt balance increased to $202 million compared to $195 million at the end of the prior quarter.

The increase in notes payable during the quarter was primarily due to accruals of paid in kind interest and new drawdowns under the fan engagement zone senior loan reassigned to CH capital lending.

Recent macro trends in credit conditions have resulted in significant tightening in lending markets and higher borrowing costs. However, the support from our largest shareholder industrial Realty group and our ability to source capital with the support of local municipal and state funding programs has provided us the opportunity to raise funding and investment.

As operating needs arise we.

We remain intensely focused on taking on the right kind of financing, while optimizing the capital stack for each asset.

This focus is demonstrated in October as the company completed several transactions that Mike discussed during his remarks with the completion of the doubletree refinancing and the recent equity offering.

We continue to work towards closing all of the necessary financing required for phase two construction, including multiple financing transactions related to the Waterpark and onsite hotel.

To reiterate we are in a very challenging and restrictive credit environment. We are working diligently to close the remaining construction financing needed to fund these critical assets.

More broadly and as noted in prior quarters, we are working to restructure and optimize our overall capital structure in a way that provides the company the best opportunity to.

Efficiently towards continued stabilization of all facets of our stated business model the.

The company has recently engaged a financial advisory firm to assist in these efforts and to help us as short term liquidity needs.

Moving to guidance, we are reiterating our 2020 forecast of revenue growth in excess of 50% when compared to 2022 and adjusted EBITDA in the low to mid $20 million range as we have highlighted with the company and village in very early growth stages, we expect revenue growth to accelerate and profitability to improve as he.

Move towards stabilization.

Longer term, we continue to target $150 million of annual run rate revenue and approximately $50 million of annual run rate adjusted EBITDA across the key pillars once stabilization and achieved.

As key pillars again, our destination based assets, our media platforms and our gaming vertical.

The revenue and EBIT generation will be diversified across multiple streams with each one driving synergies to support the ecosystem, we're working to build.

In closing the company is mindful of the current economic environment, and we remain intensely focused on driving profitability through diversified revenue streams, and very disciplined cost management, while making strategic investments to support our continued growth and finally as you've come to expect we will continue to provide transparent and timely updates to all of our shareholders.

As we move ahead.

Operator, we would now like to open the line for any questions.

Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the part D. One of them.

While we poll for questions.

Thank you. Our first question is from Jack Vander Ark with Maxim Group. Please proceed with your question.

Okay great.

I appreciate the update on the capital structure in the Johnson controls update.

The record quarterly revenue.

So maybe I'll start with a question for either maybe Michael or Benjamin just because they don't have the financial statements in front of me.

I'll start with a question on the third quarter revenue drivers.

Which is obviously a record quarter sounds good to see but maybe just more specific on the drivers and the breakout between events and hotel revenues.

Just given it wasn't such a nice jump from the second quarter.

But I think you had the same kind of the same existing activities and infrastructure in place so over the over the more specific drivers of the revenue.

Yeah sure Jack Good question.

<unk>.

We've continued to see success with that hotel.

We had a meaningful increase about 10% or sell in hotel revenues.

Quarter over quarter from the prior year about the same amount third quarter here. We also had a really good bump in event revenue.

Versus prior year. So those are this talks a little bit to the synergies that Mike talked about as we have those larger more profitable events onsite in the village here. We're also seeing the synergy of driving additional revenue to the hotel so.

From a breakout standpoint, those are really that's really attribution of this quarterly revenue between those two sources.

The only other thing I'd add Jack and Vince cover the major points.

Im very focused though on.

One the shoe is restaurant that is owned by the whole theme resort and entertainment company growing that revenue can be meaningful for us the top golf swing suites is owned by US we have outdoor rides and concessions. So we're really focusing on the things that we have driving more people into those and making them more efficient and certain.

With event growth you have that opportunity, but I think we're getting smarter at the Monday through Friday day to day growth as well and so I expect that to be a more meaningful contributor as we move forward in the coming months and years.

Okay, Great that's great color. Thanks.

And then.

Michael you did touch on in your opening remarks strong attendance in visitor growth has been better than I guess, you guys were forecasting which is great to hear.

Are there any specific or interest rate interesting trends youre seeing with regard to your visitors.

R&D visitors are they mostly first timers.

Any repeat visitors.

Do you get a sense that youre going to have repeat visitors just what are you seeing in the data.

Yes, I think as we develop more what I would call day to day use assets restaurants, waterpark things that people will want to come back to and do over and over again, we are seeing an increase in repeat visitation.

An interesting thing is we're also seeing an increase in event repeat visitation or what I mean by that is.

Big types of sporting events lacrosse tournaments football tournament, we're seeing those organizers because of the growth in our facilities and because of the experience, we're offering and frankly, they're excited about coming back year over year.

I would say new visitors are all about events.

And as they are coming for events, our opportunity is to convert them from a first time visitor to a multi use visitor and so frankly I spent a lot of time walking around during major events and festivals and things that we're having and listening to guests in the words that are coming back or we didn't realize that you had so much here and it's fun.

To see the growth that's occurred here in a very short period of time, we will definitely be coming back. So I would say that the split right now is probably more repeat visitation with first time visitation on the rise over the course of this past six months and certainly that's what we expect as we continue to build out more.

Like the water park or more events that are going to be occurring on property as well.

Okay, great great color there.

And then maybe let me shift gears I understand your perspective and focus.

<unk> spending is on the mobile front.

First the retail which makes sense just given the marketplace dynamics, but can you maybe provide.

Some additional color on your mobile sports betting roadmap.

As youre heading into 2024.

Do you expect material is there potential for a material contribution from it just anything additional you can provide on mobile sports betting.

Yes.

Well I think the way in which we've structured our partnership with better we wanted to be good partners and give them an opportunity in the early years of the partnership to really stand the platform up gain users and drive growth into the platform.

So over time the deal that we struck with them does create more value guaranteed value in the 10 year deal that we have and so yes, you will see increased bottom line contribution from that deal, but I'm also encouraged by how they are evolving the platform itself and how they're continuing to evolve their thinking around marketing.

They are they are an early stage company just like we are and so theyre competing against big brands in the draft Kings and the Caesars and the Mgm's, but I think what they're doing is finding this following that really does lay can appreciate the difference in the platform and so I'm hopeful that thats going to really help it grow and add a <unk>.

<unk> revenue source for us in terms of percentage of the overall, but I mean recall our deal with them as a fixed.

A fixed contribution sponsorship and that had certain thresholds, we get a percentage of the bad as well.

We will reach that as they continue to mature and advance their audience and the users of their platform.

Okay, great. Thanks, Michael and then just one more question from me and ill hop back in the queue.

I believe I heard you guys are reiterating your 2023 guidance, which is good to hear so I have a good read through on the fourth quarter.

It sounds like the water Park remains on track to open in the third quarter of next year in 'twenty four.

Just wondering if.

At this point in time, maybe it's too soon to talk about it but given the magnitude of the water Park, obviously, but is there any initial outlook you can talk about 2004 2024, just relative to 2023.

Are we is it too early days to talk about that thank you that's it for me.

Jack This is it's a little early we are in the final stages right now.

Capping our annual operating plan for 24 will give us that we'll be presenting that to our our board in the next couple of weeks here for approval.

So a little premature to provide anything at this point I will say we are expecting continued revenue growth as you would expect continued improvement in EBITDA.

And expect that we'll be generating positive operating leverage next year.

As you mentioned.

Waterpark expected to come on late next year that will certainly contribute to both top line as well, so, but we will be putting guidance out as we get through this operating plan review with the board in the next couple of weeks I think I think Jack just the last thing I would add.

One of the things that being a early stage operational company.

We're learning how to be more effective in reaching the guest and creating opportunities for them to have multiple experiences while they're here and so the pre packaging opportunities. We did take some small pricing increases that our concession in food and beverage locations.

Given the environment, we're living in but we're trying to balance that with.

Creating value for our guests and so even as recent as last month, we have started to implement packages for food and beverage and tickets and I think that's going to create more uplift for us and create more value for our guests. This technology that we're using this AI technology that we're using in the company that is supporting us all.

Also allows us to monitor guest flow and so we can see exactly where guests are going from the timely arrive. The first experience they have and how they're sort of creating other experiences throughout the property and their movement by that it allows us to get smarter at marketing onsite as well so I am hope.

Will that will get more efficient look we're going to add more experiences to our retail fan engagement zone will continue to drive greater profitability from expense management, and then of course, adding the water park is going to be a significant revenue contributor as well the second hotel you already see the off site hotel.

And what that's doing in a few short years I can tell you from my experience with Disney the onsite hotels command, a higher premium and they command a much higher occupancy rate as well because you want to stay where you play and so our expectations are very high for that.

Okay, Great I really appreciate the time and thanks for taking my questions.

Thanks, Doug.

Thank you. Our next question is from David Maris with singular research. Please proceed with your question.

Hey, guys. Thanks for taking the questions.

Yes.

Yes, the last analyst kind of implied.

Yes, it's a little bit challenging gas real pointed questions without the financials. So I guess my first question is when do you plan to file the Q. So that we can get kind of a.

Full look behind the kimono here, what exactly are the financials look like.

Hey, Dave This is Ben.

Our plan is to file the Q Tonight.

Based on the way calendars lined up for us this quarter.

Just a little off our normal cadence, but yes, we'll have that filed this evening.

Okay that sounds good.

And then Michael I really appreciate your comments with regard to the XFL extra failed merger about being hopeful that you'll all play up.

Apart.

But obviously that introduces.

Any significant amount of uncertainty.

You guys were able to do $6 million in revenue in the second quarter and I think that a big part of that was around the us fulfill games I guess.

My question is twofold.

One how much revenue in the second quarter is directly associated with the SFO.

Games that we are on campus and then secondly.

You guys, obviously have to plan for the.

For the.

The potential worst case scenario, what would the plan be to backfill.

Those events in that revenue.

For for whatever reason you guys arent. Unfortunately part of the plan for the merged <unk> going forward.

Yes, that's a good question. So let me just start by saying we are and I am personally in constant communication with the leadership of Fox.

And Youll recall, there the owner of the Usfl and where our partners last year.

I'm getting very positive indication.

We really like what we were able to do for them here.

Hopeful that theyre going to be back that revenue for us came in multiple different ways. As you can imagine it created hotel stays it created catering certainly tickets concession some merchandise and so while the Q2 revenue was higher I would say.

6% of that maybe was attributable to Usfl, we have gotten a lot better though at creating other events and selling private events and functions and my expectation is even if the <unk> were not to happen.

We're going to be releasing a calendar of planned events that don't just start in June and September but start in February March April and allow us to take full advantage of our indoor dome or center for performance and we have more of those events on the challenger.

Than what we've ever had before again, one five years of operation right. Now we're now working closely with multiple different promoters concert promoters event Bookers Festival bookers, and we're creating our own events I've, often said that it's great to play host to big events, but we got to create our own tent pole events because.

Those are going to drive significant revenue for us as a company as well our team has been focused on that and I think people will see that as we release our calendar more towards the end of the year youre going to see multiple tentpole events throughout the year.

It's important though for us to be part of sports landscape, where a sports and entertainment company. So we continue to have conversations outside of football.

Soccer and lacrosse, and other rectangular field sports to really think about how do we drive opportunity for ourselves here, how do we create opportunity for bigger tournaments or leagues or professional teams to practice or play here and so those are always things that we're focused on I'll give you. One example.

No.

Q4 December right, it's cold in Ohio in December.

We're hosting the seven high school State Football Championships here and Tom Benson Hall of Fame Stadium.

That in perspective, those state High School football Championships will attract as many guests as our entire Tremont weekend now what we do with those guests when we get here, we need to give them a warm place to tailgate. So the center for performance, we need to give them an opportunity to have dinner before after brunches or cocktails.

However, the case may be we need to enhance the offerings and thats, what our intention is to take better advantage of large populations of guests visiting and to monetize in different ways than what we've had the ability to do in the past. So so long winded way of saying I am very hopeful Usfl returns and allows us the opportunity to be on national.

The vision to attract sponsors to have opportunities for visitors before and after but in the meantime, we're trying to continue to create more and be more of a place where we host multiple different types of events to drive greater revenue growth in Q2 versus just sustained revenue that we've had over the past couple of years.

Alright.

Thats good color.

So.

Sure.

Two other questions first.

With regard to.

Your your recent.

We have seen that.

And I think that was in the studio, but with regard to your comments around.

Don.

If you were to host events.

Like.

Headlining comedian or something of that nature, what would your capacity be in that venue and.

In terms of the events that you may have already had in there.

How have you done in terms of driving attendance relative to the capacity.

Yeah. So the dome is in full swing right now a lot of the indoor leagues that we've developed and built over the last year on a daily basis. The dome is actually very activate it and it's exciting to see we've hosted large scale dinners up to 1000 people we've hosted Mega <unk>.

Gate experiences during <unk>, we can couple thousand 3000 people it depends on what kind of configuration youre talking about if it's a sit down dinner. It's around 1000 capacity may be a little more.

Sorry, if it's a sit down dinner, it's around 3000 in capacity, maybe a little more if its a standup comedic act or if it's a.

Our concert that we can do we can put in over 4000 people in that venue, we want to make sure. It's a great guest experience first and foremost and we also want to make sure that it's safe for folks, but we have the opportunity to expand that footprint into several thousand folks. The other thing that I really like about it is we've created is a space.

Where you can do sort of these big shows right you can do home and garden shows, which we've done you can do car shows you can do boat shows, which we're hopeful that we're going to be able to do in the near term and you can expand the capacity outside of the dome and we have a way to connect those experiences in the parking lot adjacent to the dome and inside as well so.

That's what a lot of convention halls do.

But I think the dome provides us really nice indoor capacity for any number of events and types of events that we want to host.

Yes.

It makes a lot of sense.

That's good to hear because you can probably get a lot of bands.

Bands that might.

Might not be able to fit in their fill a big amphitheater or something like that.

That could be a nice a nice revenue stream.

And then just my last question.

Focused on the on the retail.

The on site retail center.

How many businesses are actually open for business right now.

Whats your kind of what's kind of the near term rollout look like or are you fully built out at this point there.

Yes, the facilities are fully built out right.

Approximately eight businesses that are open.

Well nine if you include the two for business, where we have brew kettle in top golf swing suites, all in one facility.

We will be opening two more and Donald driver driven elite experiences that he has in huggies candy and nuts shop opens in the coming months as well. So it will be up to 10 ish experiences and the goal will be to have the rest of the boxes tenant it out by next.

Year.

And we have one really significant footprint down at the north end of the property across the street from the Waterpark that we hope to have a pretty special indoor entertainment experience that we can talk about in the future.

But again, we're curating.

The collection of assets and brands and experiences that we have there we could have had that all tenant it out already but we're not interested in just having a barber shop.

Our mail location or something like that it's not what we want we want unique experiences that complement why people come here to play in dine in and have entertainment. So our expectation is over the course of this coming year will be fully tenanted and we're going to do some enhancements to that area as well.

Outdoor bar area sort of.

Sort of an area, where we can have outdoor concerts and we did that for the Usfl Championship, we had bill and Scott There I think we learned a lot about that so adding the infrastructure there to be able to do more of those in a smaller confined space that enhances for our tenants the opportunity for business is really smart but.

It's a good question and as we open the waterpark, we'd like to have the rest of the facilities fully tenanted and opened as well.

And do you still have.

Print for a retail sports book in that facility is I mean, you are still planning to move forward with that at this point or is.

Thinking about maybe shifting away from that at this point.

No we do.

In fact, we have a fantastic footprint.

Say right on main and main.

The balcony of that footprint looks straight into Tom Benson Hall of Fame Stadium. So it has great views sheds, we have three different companies that we're talking to right now.

About a a sports book opportunity. The one thing that I should say is our sports our retail sports license had.

<unk> had a one year shelf life to it and we're working now with the Ohio Casino control Commission to help extend that opportunity to close on a retail sports book operating partner in the meantime, we've also explored a really high profile food and beverage operator in that local.

<unk> as well and so we're trying to create multiple experiences out of that sports book footprint to allow for a unique dining a unique betting environment for our guests to enjoy so our plan is still very much to try and find that right partner and get them in place.

Yes.

Got it thanks very much guys. Appreciate it appreciate the insight.

Thank you.

Thank you there are no further questions at this time I'd like to hand, the floor back over to management for closing remarks.

Thanks, very much and thanks, everybody for joining the call hopefully.

Do you understand where we're at it I'd love to just recap a couple of things as I've said before we're continuing to create experiences that are unique and we are committed to excellence you see that in our doubletree you see that.

What we're doing in our stadium on our sports fields, the types of restaurant and other experiences that we're opening we can't do anything less than that guests will pay for and come back to experiences that exemplify excellence.

Don't do that for things that are just one off experiences and so that remains one of our focuses.

We're already seeing results of our strategy in terms of our revenue growth our expense reduction, yes, we're not profitable yet, but if you are reading the tea leaves the team I'm very proud of the fact that they are managing the cost as we are growing revenue and so after only a year and a half of operation, we're starting to trend in the right direction and as I.

As we stabilize we will definitely be able to monetize and grow bottom line contribution as well, we're adding new sponsors and partners and those new sponsors and partners are not just about revenue, but they're also about enhancing our capabilities to deliver excellence Coke Jim beam <unk> all of these companies.

<unk> represent excellence in what they do and they gave us they've given us an opportunity to enhance the offering and the service that we're providing to our guests we're creating new experiences that are unique for our guests to enjoy the five priorities that I talked about balanced expense with revenue growth restructure our balance sheet continued to identify.

Significant new deal in business partnerships to enhance that product offering and increase our operational capabilities complete the financing and development of our remaining phase two assets, our waterpark in our hotel and complete the construction of those things.

And then again continuing to focus on events and really growing sort of the lifeblood of the property pulsing in new people over and over exposing them to everything that we do is really important for us driving visitation from outside of Canton, Ohio Regional visitation in the last two.

I will leave you with is we're not only focused on doing this in canton, Ohio. We're also focused on outside asset growth outside of Canton, Ohio, and so we have brought on a consultant that will help us think through a very small representation restaurant bar representation that we can activate.

Potentially with the brand of the pro Football Hall of Fame.

And think about how do we take a business model that allows for low capital investment on our part.

Enhanced visibility outside of Canton, Ohio in major NFL cities are major tourism desk.

Destinations as well and so we've done a lot of work on that front. We've created a concept our board has seen that and we're really interested to move forward with this as an opportunity.

To grow our company outside of Canton, along with media growth and gaming growth so more to come on that but something that can present, some opportunity to expose our guests to our brand outside of the state of Ohio, and really incentivize them to want to come to the football Mecca.

And to see the pro football Hall of Fame to see everything that we're doing and experiences that we're having here as well.

We're looking forward to a really good Q4, we've got Vince on the slate. We've got revenue that is being generated in multiple ways and as we've talked about synergy is a really important part while at the same time managing our expense base. So want to thank everybody and thank all of our shareholders, our board and especially our team.

We certainly appreciate I do all the hard work, it's a great team. They work tirelessly to try and make this company great for our guests to enjoy and one for our shareholders to invest in so thank you.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Okay.