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A reduction to the Advertising Fee section of the existing Facility Use Agreement between the Hinton Timberwolves Junior A Hockey Team and the Town of Hinton was denied by committee.
After a long discussion at the standing committee meeting on Jan. 28, council decided to uphold its current facility use agreement.
Dino Buttazzoni, owner of the Timberwolves team, and Town administration had explored a re-negotiation of the Advertising Fee section before the meeting but didn’t reach a mutual agreement.
Buttazoni requested to reduce the 2019/2020 season payment by 50 per cent and the 2020/2021 season payment by 25 per cent.
The Timberwolves current advertising fee amount is $8,000, which is still outstanding for the current season.
Buttazzoni claimed that the town has only received the $8,000 from the previous Junior A Hockey Team, the Hinton Wildcats, and two years prior when Buttazzoni organized minor hockey with a huge sponsor for centre ice.
“That $8,000 the town wants for advertising, I think is a little much. Maybe back then, I did it for minor hockey and we got all that sponsorship money and it wasn’t a big deal, but right now we don’t have that money,” he said.
He added that they are currently bringing in about $4,000 in sponsorship revenue and asked for some leeway to get the team going.
The town explained that this revenue source is a significant factor in achieving the Town’s budgeted advertising revenue of $15,000 for 2019.
Revenue is generated through the sale of advertising space in arena facilities to help minimize taxation support needed to operate the facilities.
Town-managed advertising agreements in both arenas generated $8,864 for 2019.
This revenue stream is managed through the Recreation Administration Office as part of the operating budget and fluctuates between $9,000 to $13,000 per year, stated the report by administration.
A bulk payment of $8,000 was established when the Hinton Minor Hockey Association (HMHA) started advertising in the Bill Thomson Arena (BTA) around 2012.
“The moment minor hockey started this as a fundraising activity, we took in consideration at the time the amount of money the BTA boards, wall, and in ice advertising takes on average. At that moment it was about $8,000,” said Hans van Klaveren, manager of parks, recreation, and culture.
The town is responsible for all direct expenses impacting the arena budget for services related to advertising, such as installation, maintenance, repairs, and storage.
Existing and long-standing advertising arrangements between the Town and local businesses continue if they are renewed each year.
Any Town-established advertising contracts that are not renewed, automatically become part of the team advertising spots as per the exclusivity clause of the Timberwolves contract.
Eventually, all contracts will become part of the team as part of that clause, which was first established by the Hinton Wildcats.
“For the BTA, we’re asking $8,000, which is what the average was for all these years. [If] we’re going to maintain and keep that rollover forever, it’s setting up potentially for failure. Potentially, I’m not saying it is, but it makes it hard,” commented Mayor Marcel Michaels who voted against upholding the current agreement.
He added that the current agreement isn’t intuitive mathematically to maintain a good partnership.
“History demonstrated that there was no contract of this nature that has lasted longer than I think four years, that’s the longest with minor hockey to my knowledge. Maybe it’s not a perfect contract,” said Michaels.
Coun. Dewly Nelson also stated the contract contained gaps and didn’t feel there is a current uptake in advertising from local businesses.
He pointed out that discussions between the two parties can continue while upholding the current contract.
Coun. Albert Ostashek stated that the Town has an obligation to make sure their incurred costs are still collected and maintained, while giving the contract holder the opportunity to generate additional revenue.
“The way it is, it’s a good opportunity and beneficial to both parties. I’d be concerned about changing this to negatively impact the town, which could force an additional subsidization of taxpayers onto a team that has already gotten significant subsidization through decreased ice rental rates,” he said.
Coun. JoAnn Race pointed out that any reduction would take money from the more than $9M recreation centre operating budget.
Around 2012, the HMHA had an advertising agreement to facilitate the BTA advertising as a service to the facility and a fundraiser for the HMHA, administration explained at the meeting.
The agreement provided the Town with reliable funding to maintain previous and current advertising revenue levels, and the HMHA was able to keep all excess funds to support their non-profit organization.
When the Wildcats Junior A Hockey Team took over during the 2018/2019 hockey season, their agreement contained advertising rates and similar conditions as the HMHA agreement.
The Wildcats also included a clause to generate revenue for their for-profit organization, and a lump sum advertising fee was established, which they paid for the 2018/2019 season.
The current Hinton Timberwolves team took over that same agreement, but Buttazzoni indicated his intent to challenge the practice ice user fees and the advertising rate at a future date.
He challenged the practice ice user fees in October 2019 and the team received a reduced hourly rental rate for Adult Non-Prime Arena Use by 75 per cent for the 2019/2020 season and 50 per cent for the 2020/2021 season.
Administration and the Hinton Timberwolves can continue discussions around the advertising fee section of their agreement, but will continue to owe the $8,000 advertising fee per season until any changes are made.