UT’s big arena loses over $1 million a year

School officials say the 24,535-seat arena would probably at least break even if it could keep the revenues generated from all events.

The arena makes most of its money from rental fees for special events such as concerts and conferences, and it gets part of the revenues from the events’ parking and merchandise.

The athletic department takes the revenue from ticket sales and parking for men’s and women’s basketball games, concessions from all events and advertising displayed inside the arena. The athletic department also pays $415,000 a year in debt service from the construction of the arena, which opened in 1987.

“I don’t want to say we are not losing money, but we are not losing as much as it appears, based upon the funding scheme we have,” said Jeff Maples, UT’s senior associate vice chancellor for finance and administration.

The athletic department budgets $1 million each year to cover the arena’s losses. The arena has had an operating deficit each year since it opened.

“I think, in some ways, it’s part of doing business,” athletic director Mike Hamilton said. “I certainly understand and agree we are the primary tenant and there is a cost to being the primary tenant.”

The basketball teams also use the arena for practice, which limits the number of outside events the arena can hold. That’s part of the reason why the athletic department is looking into building a separate practice facility.

Almost 750,000 people attended 77 events at the arena last year. The Church of God Winterfest Conference had the biggest attendance of 63,000 over its three-day event. The Kerbela Circus and Destination Imagination each drew 35,000.

The Lady Vols game against Vanderbilt was the biggest UT sports draw at 18,643. The largest attendance for a men’s game was 16,183 for Kentucky.

The biggest overall draw was the Lady Vols, bringing in a total of 204,712 fans for all of its games in fiscal 2005.

The arena has to compete with largest cities and newer facilities — some of which are smaller but with luxury suites — for big events.

“That 24,000 seats is a great thing when there is an artist that can sell 24,000,” arena manager Time Reese said. “The last sellout we had may have been in the heyday of the Backstreet Boys.”

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Information from: The Knoxville News Sentinel, http://www.knoxnews.com