After being in the red for a short time since its opening in 1999, the Schottenstein Center has been seeing an upturn.
Although it lost money in its first two years in business, the Schott has been making a profit since 2001.
The ending balance for the operating year of 2001 was about $950,000, and in 2002 it was approximately $850,000. In 1999, the Schott lost about $1.5 million, but it lost less in 2000 with a debt of $940,000.
“The building came in over budget when it was originally constructed,” said Xen Riggs, assistant vice president of student affairs and director of the Schott. “The budget was about $111 million, and the total came to $116 million.”
When the venue was completed, Ohio State set up a plan so the Schott could pay off the debt in loans and bonds over a 30-year period, in which time they would be in the clear.
“We front-loaded the debt, so that it was higher when we had extra revenue coming in,” Riggs said.
That extra revenue came from sponsors such as Huntington Bank and Kroger, who provided gifts of money in exchange for naming rights for parts of the building. The total sponsorship money came to about $24 million.
“The naming rights money was supposed to go towards the debt,” Riggs said.
“The university put it towards paying the construction deficit, until it was paid off,” he said.
University officials realized there was a problem with the budget after the second year of operation.
“Once we found out there was an issue, Bill Hall, Andy Geiger, Brit Kirwan, Bill Shkurti and I met, and put together a long-term plan to restructure the budget,” Riggs said.
The plan was simple. They restructured the debt so that they would pay the same amount over the next 30 years.
“There was an internal system set up with the treasurer’s office, whereby a certain amount of funds would be transferred from a central account to the Schottenstein account,” said Bill Schwartz, associate vice president for the Office of Student Affairs. “The amount would make up the difference between the higher level of debt at the beginning, and what the average was.”
It has the same effect as if even payments had been made from the beginning.
“The Schott then has to pay those dollars back to the university,” Schwartz said. “Basically, the money goes back and forth. It was a temporary adjustment to even things out.”
The Schott also pays an overhead sum of about $500,000 a year to the Department of Athletics.
“We pay a percentage of our gross earnings back to them for central support,” Riggs said.
Riggs said the Schottenstein Center and the Department of Athletics have a symbiotic relationship and are close partners.
“We depend on their success, as they depend on ours,” Riggs said. “If we have a year when we are down, Andy (Geiger) will help us out. If there are years when we’re up, we’ll do the same for them.”
One such occurrence was when the Department of Athletics renovated the women’s locker room in the Schott, as it was not equipped for a male coach.
“It was designed to accommodate only women coaches,” said Susan Henderson, associate athletic director. “We had to reconfigure it last year so male coaches had a locker room.”
All revenue from the three sports that play in the Schott — men’s basketball, women’s basketball and men’s ice hockey — does not go to the arena.
“All ticket sale money goes to the athletic department,” Henderson said. “The revenue from the teams helps support the 35 sport programs we have here.”
The success of the teams playing in the Schott has very little bearing on the budget of the building.
“If the teams are drawing bigger crowds, that helps athletics to be able to help us,” Riggs said. “We want the athletic department to be successful. We want the teams to be successful and for people to be excited to come to games.”
“The more successful the team is, the more people there are coming in and out of the building,” Henderson said. “More concessions are sold. Sponsorships are easier to maintain.”
When Nationwide Arena opened, it affected the number of professional acts, such as concerts, the Schott was able to book. In 1999, the Schott hosted 31 professional acts. In 2000, that number jumped to 43.
“Even if Nationwide didn’t exist, I don’t know if we’d ever have 43 again,” Riggs said. “That was a remarkable year.”
Riggs said most arenas are happy booking 30 to 35 acts a year. The Schott budgets for less than 20 nationally touring events.
“We have been self-sustaining for the past three years now,” Riggs said. “We’ve built up a reserve and a surplus from the past couple of years. Things are going real well right now.”
“It takes a few years for a new venture like that to be self-supporting,” Henderson said. “They’re on a good footing now where they can maintain a good financial balance.”
