Monday 23 June 2008
Estimates Committee B
QUERY KEY ROLE OF SILVERDOME
Mr DEAN - The next one is on the Silverdome. There has been quite a lot of press in the last few months about boxing to take place there. Minister, my question is, it is great to have these wonderful facilities around the State and so on, but if we start pricing ourselves out of bringing that sort of activity into some of these centres, we are really defeating what it is all about. Where are we going with the fees for a structure like the Silverdome?
Ms O'BYRNE - I will take you through the particular instance in relation to the boxing first and then we can talk about the sort of cost structures that might exist for a whole range of things. Can I say that the key role of the Silverdome is to provide sporting participation opportunities. That is its job. When it does hold events that provide a commercial return, it needs to actually get a commercial return, because we provide supporting opportunities to local community organisations as an affordable opportunity as we can. There is an obligation for them when they can make money to make money in order to be able to do the things that we need to do for the people who participate there all the time. We all know that netball is there on an ongoing basis.
We were approached in February 2008, or the Silverdome was approached to hold a world title middleweight fight featuring Daniel Geale. Can I say that I think Daniel truly does want to fight in Tasmania. I know that there are suggestions that this might have been a bit of a furphy. I think that Daniel does want to have a home fight. Whether or not it provides the sort of returns to the sport itself in terms of their market, I am not sure, but I know that Daniel, as an individual, desperately would like to fight here, so I want to put that one clearly.
Following a meeting on the site, the Silverdome provided a costing estimate to the promoters based on their general outline of requirements to hold such an event. It was a general sort of response to the kind of things that they might need. Contained within the estimate were a number of variables, including security, medical coverage, venue setup, including in broadcast requirements, catering, cleaning and staff. We do not provide catering, so the catering cost came externally and, obviously, you could then negotiate with the caterers about how they provide the services, but we do not provide catering, so that is not an internal cost that we control.
These were to be refined with ongoing negotiations to the promoter once the venue providers were provided with more specific requirements. It was a rough, "Based on what you've told us, this is what we think it will be". That is not unusual when we get commercial opportunities. People give a bit of a scope; they get a bit of an idea and then they say, 'Okay, let's sharpen the pencil and we really want to do that here and we don't want to do that there'. These variations can significant lay impact the cost of hosting an event at a large facility like the Silverdome but are primarily determined by the number of patrons attending. The costs included in the estimates are in line with similar large events. I suppose the similar large event most people would think of would be Alice Cooper, which was July last year. That would be a similar large event in terms of the numbers of people who might come through.
At the meeting, the promoter was informed that any requests for financial assistance to hold the event would need to be submitted to Events Tasmania and should include a proposed budget with details of the level of Government funding being sought and also detailing the benefits to Tasmania through conducting the event. Although Events Tasmania received an initial request for financial assistance to bring the fight to Launceston on 9 April 2008, they did not get the further details that the promoter was required to give them. Following receipt of the Silverdome's estimate and despite several attempts by officers at the Silverdome, there was no further communication with Daniel's management for almost a month. That was around 26 days they waited to hear back from Daniel's management.
An announcement was subsequently published in the Examiner on 23 April 2008 declaring that the title defence was to be held in Sydney on 27 June 2008 rather than in Tasmania. In the broader sense, I think it is regrettable that Launceston people do not get the opportunity and Tasmanian people do not get the opportunity to see that in Launceston, but we would welcome further advances by Daniel's management regarding opportunities. They are not cheap things to run, and the Silverdome does have an obligation to ensure that we do not lose money on events such as this because we do provision of sport to local communities on a shoe string. There are a range of different fees that would be approached for different things, and they do depend very much on the type of infrastructure and support that is required. For instance, I think that the fee for having an ambulance on site was something like $4000 for the day for the actual fight. I can check that figure, but there are a lot of fees that would be additional that Silverdome could not create the cost around that we would be requiring to do. There was some criticism about the catering costs. What Silverdome did was ring the person who normally caters for events up there and said, 'Can you give us a quote based on these types of numbers, rough figures only'. We did not have confirmed numbers of how many corporate tables there would be versus how many other opportunities, so that caterer provided that quote, but there is no reason that those things cannot be negotiated further.
Mr DEAN - The other concern was that Silverdome, I think, is quite happy to have retail activities within the centre from time to time, but it is folly that they did not negotiate in the right way in relation to this event, which is a sporting event, and it involves a lot of people.
Ms O'BYRNE - I am not making a judgment on whether it is boxing or anything else, Mr Dean. We would treat each opportunity as an opportunity in terms of usage. We do have an obligation to give first opportunity to sporting organisations. That has been the case, and I have had conversations with local businesses about the commercial opportunities that have been used. We have not knocked over major sporting events in order to have commercial opportunities. The sort of pricing structures that we would have, we have a type of price for local season rosters, a regular sporting use, so primarily you would be thinking netball, a round-robin series, these sort of things. They would have a session cost, usually per court per game cost. Bearing in mind, they do not require massive security and ticketing and all of those sorts of things, so you can actually charge for the service that is being provided.
When there is statewide and national rosters, they can have venue hire fees, depending on the type of audience there is often a recovery of cost figure for goods and services, catering, wages, power, generator, if they use it, first aid, emergency coverage, cleaning, consumables, and they are negotiated by contract and are represented as either an hourly or daily or event rate. For larger sporting and sports-related events, competitions and carnivals, we have venue hire fees and the on-costs I talked about before. Where tickets are sold on a hirer's behalf, there can be a fee for managing the ticketing and credit charge opportunities as well. They are based on the sort of event where you get 3500 or 4000 to the cycling carnival, for instance.
For professional sports entertainment, go-karts, professional boxing, professional wrestling, there are venue hire fees, the on-costs that apply, an in-house fee for tickets that are sold, credit card changes, but, once again, things like security and equipment hire and catering will have an impact on that. For non-sporting use, for expos and exhibitions, for instance, the home renovation expo, we negotiate prices around security, catering, beverage services. That usually goes for three days. Concerts tend to be based on audience size of roughly 1500, that is probably the average size. Extra requirements with regard to pre-event ticketing, security and such things must also be taken into account. For not-for-profit and community groups, charges are once again negotiated by contract, and, once again, recovery of costs is the aim. For example, religious groups regularly use the facility as well. So we do respond to the needs, but the needs are generally about the recovery of costs. We do not make a bundle of money out of the Silverdome, as you would have noticed from the budget papers, but we do need to run it at a level that allows us to make sure that we can provide local sporting community opportunities at the most cost-effective way.
Mr FINCH - That explanation was fulsome, and thank you, but it just concerns me that you said that you suspect that it may have been a furphy in respect of arrangements for the fight.
Ms O'BYRNE - No, I am saying that there had been suggestions raised locally that it was not really going to happen. I wanted to put on record that I actually think Daniel was absolutely passionate about fighting there.
Mr FINCH - Okay.
Ms O'BYRNE - I was actually trying to put on the record that there had been some suggestion that this was just a local thing, but I think Daniel really would like to fight locally, not only in Tasmania but in Launceston.
Mr FINCH - He made that clear.
Ms O'BYRNE - Yes. I did not mean to misrepresent that. I think Daniel was incredibly genuine and he really does want to fight here.
Mr FINCH - I think they were frightened off by that $50 000 figure, and I think just that initial thing just set them back and that was why they did not pursue it more.
Ms O'BYRNE - We would be happy to take further representation from them in future times and work with them. But the figure that they got was very much a case of, 'This is roughly what it is going to cost you, given all the costs that we actually have to outsource. We have to bring the services in order to provide them'. We are not a function centre that has catering and health facilities and all of those sorts of areas on site. We have to pay to get those in, so there is a whole host of costs that we cannot control. But those decisions could be made by the promoter. They could say, 'Okay, yes, we talked about doing this kind of catering, but maybe we don't want to do it that way. Maybe we've got another way, or we want to use another caterer'. There are no preclusions around that, but they are conversations you generally have after your initial quote. I really wanted to indicate that I was trying to be very genuine in saying that I think Daniel does want to fight locally.
Mr FINCH - Yes.
Ms O'BYRNE - I think he would love to fight in front of a home crowd.
CHAIR - Minister, I am conscious of the time that we were going to attempt to finish this particular output group, but that is not going to happen as committee members have more questions.
Ms O'BYRNE - Sport and recreation is something that often gets sidelined, and I think that this is something that is intrinsic to the way we live our lives and the opportunity that we give people. I am very happy to keep going.