Can the Amway Center Be Profitable?

As the City of Orlando begins to celebrate the completion of the Amway Center, many questions need to be answered. With city personnel losing their jobs because of the recession, the workload has doubled for the remaining city workers. The city is tightening its belt, but with the new arena, the city will have to spend, spend and spend some more.

It is too late to stop the construction of the new arena, but the first question after forty or fifty games played for six months is, “What does the city do with the arena for the next six months.” Hopefully, the arena will get concerts and events to generate revenue to help pay for the debt service and upkeep of the building.

But, the concert route is drying up, and those big concerts stop in Tampa and South Florida, because a larger wealthier population are in those markets. Also, the UCF arena has gotten very competitive for what business is out there, and they are willing to compete with the new Amway Center.

The debt service on a new $400 million arena is estimated that it will cost around $3-4 million a month, with operating expenses at around $3 million for the year. Therefore, it will cost around $39-50 million a year to operate the new building in the middle of a recession.

Since both mayors Dyer and Crotty, and both commissions signed off on the deal, I guess the taxpayers are stuck. Our leaders can always use the excuse that their projections did not take into consideration the recession and a slowed down economy.

Nevertheless, it appears that there was some backroom lobbying, because the Magic agreed to pay $1 million in rent a year for 25 years. They have pre-paid this rent up front as their contribution to building the new arena, and there is no more rent for the Magic for 25 years.

Our leaders also gave up many of the revenue streams that the city and the taxpayers could receive from the new arena. Cities usually generate revenue from an arena for debt service, but the leaders gave back arena rental, box office fees, parking, concessions, and advertising back to the Magic during games. This neat package has been keep extremely quiet even though the city will go into the red on this deal.

It appears that this was a great deal for the Magic, and a bad deal for the city. The new Amway Center will put the city deeper into debt.

Therefore, we have to begin to ask the question, “Who are our leaders working for and can the arena be a profitable deal for the city?”


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