Blunderdome: silence in the house
It didn’t come as much of a surprise last week when we learned of David Podmore's upcoming resignation as board chair of PavCo. No one represented PavCo’s face more than David Podmore, and he, more than any other BC corporate leader, understood the power of media relations. By any objective standard his record is abysmal, yet he’s widely regarded as one of BC's most credible senior executives.
Such is the magic of PR.
Here, take a quick quiz. Which Vancouver venue booked Madonna, Metallica and Justin Bieber for their 2012 world tours? If you guessed BC Place Stadium, which was retro-fitted at a cost of more than $500,000,000 taxpayer dollars specifically to attract major entertainment acts, your dunce cap is over there in the corner.
Try Rogers Arena, the smaller privately run facility that is also the home of a major sports franchise team that sells out 40 home games a year. Which is how a real venue should operate.
Blunderdome: silence in the house
Despite a massive public cash injection, BC Place has failed to attract any more major acts and events than before. Of course this won’t come as news to anyone in the entertainment industry. Entertainment experts would have told PavCo that only about 10 acts in the world will play a stadium in a regional market like Vancouver, and they’ll rarely come here.
Here’s the August calendar for BC Place in 2012, showing a fairly typical month with two Whitecaps home games and one Lions game. That’s it. 3 events that will not reach 50% capacity and don't pay market rent in any event. And it doesn’t get much better.
In fact, the only new event at BC Place from here until 2013 is the first annual Housekeeping Challenge, where teams of 8 housekeeping members will represent organizations to compete for the chance to be Vancouver's Housekeeping Challenge Champion. Teams will face off against each other in a series of fun, collaborative activities designed to showcase numerous housekeeping and communication skills.
In the real world, if PavCo was a publicly traded company Messrs Podmore and Buckley would have been drawn and quartered by their shareholders by now, based on the fundamentals behind this absurdly lavish project. No formal business case was ever disclosed, as it probably could not withstand the light of day, but in 2011 during a construction tour (at 4:20), David Podmore said the half billion dollar project’s financial viability rested on three primary sources:
1. An annual $6 million lease to Paragon Gaming;
2. Naming rights;
3. 40 more major events in the building, with attendant concession revenues.
Notice anything funny here?
All of these conditions should have been locked down prior to proceeding with the costliest roof refit in the world, and not a single one of them has materialized.
Paragon never got its needed slot machine licenses, and the naming rights turned into a fiasco. But worst of all, only one major act, the Roger Waters' The Wall concert was booked into BC Place between its 2011 opening and 2013, and nothing is in sight.
Where's the ROI?
Where are those 40 events? The Housekeeping Challenge isn’t going to cut it.
There never were going to be any 40 new events a year--that was just flim-flammery. Most of the media were too star-struck by David Podmore to make the most basic inquiries. All the frailties of the business case were hiding in plain view.
BC Place has lost millions every year since it was built, and shoveling half a billion dollars into it only made matters worse. The retractable roof screams RISK to experienced businesspeople investing their own capital rather than somebody else’s. Any seasoned owner with their own skin in the game would have re-worked this thing and scaled back the expenditure by hundreds of millions of dollars. Or maybe gone right back to the drawing board.
They might have forced Podmore to look at London. With a climate similar to Vancouver, London hosted the Olympics in an open-air stadium with minimal audience coverage. Other options to consider were a simple replacement of the air support roof or a non-retractable fixed roof.
Or Podmore might have looked to Toronto's BMO Field, [pictured below], which has a capacity of 21,000 and was built in 2006 at a cost of $62 million, of which $45 million was paid by three levels of government.
But none of these were world-class enough for David Podmore, who’s like the dad who goes to the AutoMall to get a new mini-van and comes home with a Lamborghini convertible.
Yet far from being tarred and feathered for appalling judgment and profligate spending, Mr. Podmore is lionized as a stellar captain of industry. With few exceptions the media has been disinterested in such arcane concepts as balance sheets, income statements, financial projections, and the basics of due diligence. In the end it is their verdict that shapes public perception, and they are gaga for Podmore.
If all this is a mystery, Dear Reader, remember that to criticize PavCo is to criticize the BC Liberal Party. And if you are critical of the BC Liberal Party then you must be a crank or a socialist, so it follows that you have no concept of how to operate a business. The business sector itself has kept quiet as a mouse, unwilling provoke the ire of one of BC’s most powerful figures, or to raise voter questions about their patron party, the Liberals.
Ergo, David Podmore retires with distinction from his years of selfless service to the people of British Columbia, who may now humbly bend on one knee and thank him.
The Order of Canada can’t be far behind.