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"Not remotely viable": Govt-owned event manager warns on profits, jobs

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Saturday’s AFL Showdown at Adelaide Oval “would have lost tens of thousands of dollars” if not for the Commonwealth JobKeeper subsidy, according to the Adelaide Venue Management Corporation, which says it would be “unviable and irresponsible” for it to stage similar events – a decision it concedes will cost event staff jobs.

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AVMC, which runs the Entertainment Centre, Convention Centre and Coopers Stadium, was not eligible to receive JobKeeker for its 850 casual staff, most of whom have been unable to work for the corporation since March, even before the COVID-19 lockdown.

CEO Anthony Kirchner this week updated staff in an email – seen by InDaily – which paints a bleak picture for the corporation’s short-term prospects, but nonetheless enthuses that “AVM has not put its hand out for any State Government assistance at this time”.

“We’re in reasonable shape to get out the other side [of the coronavirus pandemic] without being a burden on the taxpayer which, if achieved, will be quite extraordinary,” Kirchner wrote.

“However, it will come at the considerable cost to many of our Event Staff, which is not lost on the AVM Board or me.”

He said “numerous event staff have contacted me to get an update on when AVM’s venues may be in a position to reopen on the back of noting that Adelaide Oval hosted the Showdown on Saturday night”.

Kirchner attended the event, which saw Port Adelaide defeat the Crows in the long-delayed round two fixture, “at the kind invitation of SA Health and the Adelaide Oval Stadium Management Authority… to view the measures that had been put in place to deliver a ‘COVID-Safe’ event for the 2250 in attendance”.

“It was a worthwhile exercise, and AOSMA’s planning and execution of the event was faultless… however the event would have lost tens of thousands of dollars had it not been for the hundreds of AOSMA event staffers being subsidised by the Federal Government’s JobKeeper payment,” he said.

“As you are aware, AVM and more importantly its employees, has been deemed ineligible for JobKeeper, and therefore it would be completely unviable and I would suggest irresponsible for AVM to run a similar event.”

AVMC-run Coopers Stadium is likely to host A-League matches later this year, with the soccer set to resume next month.

“We’re likely to stage a couple of matches in late July/early August to enable Adelaide United to complete its 2019-20 A-League season,” Kirchner writes.

“The capacity of these matches, should they eventuate, is yet to be determined, but AVM will likely incur losses on these events in order to assist Adelaide United complete its season, such is the club’s importance to the social and sporting fabric of the state.”

But he suggested there would be even less capacity to reopen for “viable events” at the Convention Centre and Entertainment Centre under current and forthcoming coronavirus restrictions.

No promoter is going to bring an arena act to Adelaide under the restrictions – it’s just not remotely commercially viable

“Current restrictions allow for one person per four square metres, 75 per room and 300 person venue capacity [while] from 29 June, there will be no maximum venue head count, but the one person per four square metres will continue to apply,” Kirchner said.

“What does this enable the AEC to do? Current restrictions provide a maximum capacity for an Arena-end stage concert of 670 when under ‘normal’ circumstances we’d have a capacity of approximately 8000…

“No promoter is going to bring an Arena act to Adelaide under the restrictions – it’s just not remotely commercially viable, let alone the indifferent concertgoer experience.”

He said the Convention Centre would have a capacity “of just 520 in the East Plenary Building when the ‘normal’ capacity is in excess of 3000”.

“Again, the viability of ACC core business events (conventions and exhibitions) is just nowhere near where it needs to be for venue hirers or AVM at this time,” he said.

He said AVM “risk management planning” had “ensured that we’ve been prepared for downturns”, but the coronavirus pandemic had been “far more devastating than anything we’d anticipated”.

While he didn’t directly address how many staff he expected to be offered future work, Kirchner said he was “hopeful that we’ll be open for business at the ACC and the AEC in some shape or form within the next few months, subject to the further significant easing of restrictions to a point that we can achieve break-even events at the very least”.

“AVM understands that the health of South Australians needs to remain the first priority,” he said.

Asked about Kirchner’s comments, the Stadium Management Authority said in a statement: “We were delighted that Anthony and other representatives from government, health and sporting organisations could attend Saturday night’s event so we could all learn from the experience.”

“We had approximately 200 staff in attendance to ensure it ran smoothly in line with our COVID-Safe planning… JobKeeper has been enormously important for us; it helped offset the significant costs involved in running Saturday night’s game and, more importantly, it has been pivotal in helping us retain our professional and highly-trained team.”

The SMA said while it does not comment “on the profitability or otherwise of any event… staging that game was never about making money – it was about starting the process of getting fans back to the football”.

Treasurer Rob Lucas, however, queried the suggestion taxpayers were not subsidising AVMC’s operations, saying all such major event locations “are clearly not making any money at all at the moment, and taxpayers are through various forms or other subsidising them”.

He said, though, this was likely in the form of insurance through SAicorp, the SA Government’s captive insurer.

“Ultimately if you’ve still got no revenue going in you’re still running up deficits [so] there will be an ongoing requirement to continue to fund them – otherwise they’d totally close down,” he said.

“Clearly the state’s not going to close down its Entertainment Centre and Convention Centre.”

Asked about subsidising casual staff, Lucas said “all of the operations are required to make whatever savings they can in terms of their operating costs [and] there are certain costs they can’t remove without sacking people”.

“If you’ve got casual staff there’s no legal entitlement to employ, for example, car park attendants or service attendants if there are no functions where car parking is going on,” he said.

Lucas, who today also flagged that the Marshall Government was pushing the Commonwealth to extend JobKeeper post-September to assist tourism-related industries, conceded international tourists and delegates were the main game for seeing the Convention Centre and Entertainment Centre brought back to significant use. The Federal Government warned just yesterday that international border restrictions were unlikely to be waived until at least next year, while just today Qantas cancelled all overseas flights, other than services to New Zealand, until October.

However, Lucas added, “clearly with [increasing] interstate travel we’re going to have an increasing capacity to do functions and events”.

AVM has been pushing for a new inner-city covered sporting and entertainment venue, which was to replace the Entertainment Centre and Coopers Stadium, which would both be sold off.

Lucas has now confirmed such a proposal was off the table for the foreseeable future, saying today a “$1.3 billion covered, city sports stadium won’t be able to be afforded”.

In a separate statement, Kirchner told InDaily that decision doesn’t affect AVMC’s future plans, insisting the corporation “will always continue to advocate for investment in infrastructure that we believe is in the best interests of the social and economic benefit of South Australia”.

Lucas told ABC radio today his “best estimate” for this year’s state budget was “about a $1.9 billion deficit for this year”.

“Next year is much more problematic because it depends on GST collections etc, but at this stage, Treasury’s best estimate is the deficit next year will be around about the same size as this year and we’re also indicating that at this stage, by the end of the forward estimates which is four years away, we’re probably looking at a total state debt of around about $30 billion – so a very significant increase in the deficit but also in the level of the state’s debt,” he said.

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