A conversation with Rob Cline

Posted on 30. Aug, 2009 by admin in News

by Yvette Davis

Rob Cline took on the job of managing the $52 million, 165,000-square-foot Town Toyota Center for developer Global Entertainment Corp. in September 2007, about one year before the event center opened. He was tapped for the job because of his 30-year involvement with youth and adult hockey in the Valley. During his tenure with Global Entertainment, the building opened and had many successes including the LeAnn Rimes concert and a well-supported first season for the Wenatchee Wild hockey team.

As Cline leaves the management post – he accepted a new job as principal of Cashmere Middle School in March, which he officially starts July 17 – he does not yet know who his successor will be.

Global Entertainment ran into trouble with the arena’s owner, the Public Facilities District (PFD) in May.

In a May 15 presentation to the PFD board, Mark Calhoun, finance director for the city of Wenatchee, advised the arena would not make its $840,000 projected revenue over expenses listed in the budget Global had presented to the city in July 2008. In a four-page document, Calhoun showed the arena would instead have a loss of $148,312. After the presentation, the PFD initiated a discussion with Global that resulted in the board terminating Global’s contract June 3. Global’s contract with the PFD officially ends Sept. 2.

Cline, who was involved with the PFD during the planning for the facility, said he was shocked at the board’s decision to fire Global. He said he knew the center was suffering some budget problems during its first year in business, but didn’t predict things working out the way they have.

Cline sat down with the Wenatchee Business Journal to talk about the work involved in getting the arena up and running, how it’s different and yet similar to running a school, and how the arena’s budget issues came to a head.

Wenatchee Business Journal: How did you get the job?

Robert Cline: The general manager Global was going to bring in didn’t work out. The person decided they didn’t want to keep moving their family, so they were kind of without anybody. I’d been involved at the PFD level so I said I’d be happy to help out. It just kind of went from there.

WBJ: That was a big switch for you, going from education to running an arena.

Cline: It’s a lot of the same skills and tasks though. You’re still managing people and I think that’s the key component, the people and relationships. I had some skills in that area.

WBJ: How is running an arena different from running a school?

Cline: Well you don’t get to work with kids as often. When you have a challenging day, you don’t get to walk down to a classroom and see the kids working hard with good teachers. When you do that, life looks pretty good again. In this position I don’t have that, so I have to go smack a hockey puck around a little bit!

The main difference is this is certainly a lot more high profile position. I’m in the public eye quite a bit more. It’s out there every day for good or bad.
One other major difference is with the school you never really have an opportunity to make more money. The state gives you the dollars and you do what you can with them. At the arena we have to be responsible for generating revenues, so that’s always in the back of your mind.

But again, that’s similar because as a principal I was always trying to sell the school and the value of what we were doing there and we do that here too. We try and sell the building and market it to people and make sure people are coming through the doors and having a good time. At the end of the day it’s a similar adventure.

WBJ: Did you know what the job would entail when you accepted it?

Cline: I had a pretty good idea. Director of Sales Linda Haglund and I visited Global’s Prescott Valley, Ariz., facility, when they opened up in the fall of 2007. I had an opportunity to talk to the people in the building about what their typical day looked like and what the events were like.

I think the thing that’s different in our building is we have our community rink here, and it operates seven days a week no matter what, and typically 12-16 hours a day. So when you throw that in and the fact that I’m a hockey coach, player and referee I guess I didn’t predict that I’d be down here as many hours per week as I have been.

WBJ: What didn’t you know when you took the job that you found out later?

Cline: I’d say the biggest thing is the entertainment industry is an interesting animal. I kind of like to be organized and plan ahead but with performers and entertainers you really can’t do that.

You get contracts late. Sometimes we don’t get the contracts until a week or two weeks before the show. So we have to figure out what size the stage is, what kind of catering to do, what the stage looks like, what the sound and lights look like — we have to coordinate all that stuff and make sure it’s ready to go. I function well on a last-minute basis, I keep calm and all that, but if I had my way, we would get those contracts a couple of months ahead of time and everything would fall into place in a timely manner.

WBJ: You have managed to pull off some pretty big shows though.

Cline: The quality of entertainers we’ve attracted has been terrific. It’s been somewhat challenging to get people in though because the building is brand new, it’s a new market and a small market. But everybody who has been here has loved it and is spreading the word in the industry so I think we will have a lot easier time booking shows in the future.

WBJ: What does it take to get an arena like this up and running? What did you do that first year?

Cline: Well, when I started we were still in construction so there was a lot of contract stuff and what we call FF&E — furniture, fixtures and equipment. We had to go out and get bids for everything.

As we got closer to the summer we spent a little more time onsite making last-minute decisions on things that could be changed before they finished all the drywall.

I worked with the hockey team on the hockey schedule after it was awarded the franchise. I worked on the entertainment schedule, too, and with the local user groups, and then I worked a lot on the quilt show, home show and basketball showcase. When I got to August I was doing a lot of hiring.

It was exciting every day. We moved in Oct. 5 and we haven’t stopped since.

WBJ: Did things go differently than you thought they would?

Cline: I think the thing that surprised me was all of the startup expenses that we had that I would have expected to be part of the pre-opening budget or construction budget. For example the matting down on the community rink over the concrete. That wasn’t here, so that was a cost the building had to bear after we opened. Things like that took me by surprise and hurt our first year budget. We found out we needed more radios and other things. There were about $50,000 of startup costs that occurred during this first year that won’t occur in future years.

WBJ: And that had a negative effect on the budget?

Cline: It did. Any business in its first year doesn’t really expect to make a million dollars. Certainly we’re not, we’re behind where we thought we would be. But we tried to present a more realistic budget last spring to the city and the PFD and they said “no, redo it,” and we redid it, but then we find out they are holding us accountable after we told them we wouldn’t make $800,000. That’s been frustrating to say the least.

WBJ: Was the city informed on the budget all along?

Cline: Global sent detailed month-end reports to the city from October ‘08 on.

WBJ: How was the initial budget determined?

Cline: We presented the original budget based on Global’s most recently opened buildings. The information was transferred to our budget and then we projected what we would do. At that time it was two years out. Six to eight months before we opened, the economies were going down and people that had been involved in the project that said they would buy suites and seats suddenly weren’t doing that, so we had to revise the budget. Our numbers weren’t going to be what we predicted. It’s nobody’s fault necessarily. Entertainment is a tough one for people to spend a dollar on in slower economic times.

Then we lost one of our tenants with the soccer team and you can’t just re-book those dates at the spur of the moment. Sometimes it takes us six or seven months to get an artist to agree to an offer and a date.

WBJ: When I talked with you in December ‘08, you had said the arena was behind revenue-wise on the concerts because of a delayed opening. Was that also a factor?

Cline: Yes, we tried to do an opening in September — a big show that would have really done well. But we just weren’t confident that everything in the “back of house” area where the artists would be, would be completed in time. We didn’t want to bring in that level of a show and have them say, “this facility isn’t up to our standards,” because once that gets out in the industry it’s pretty difficult to keep acts coming through. So we did lose one show that I think would have done extremely well for us.

WBJ: Are concerts big money makers for the building?

Cline: You think you’d make a fortune on these things but you just don’t. It’s always a risk, a huge risk, because we are guaranteeing a certain amount to the artist, so we have to figure out how many tickets that means and what price level and all those kinds of factors play into it. We haven’t co-promoted anything. The building has taken the risk on every show that we’ve done and for the most part we’ve done okay on the shows. But by the time you pay the artist and the agent and all the other expenses and labor, you just don’t make that much money. So you have to keep doing a number of those so you have the steady income coming in each month.

WBJ: So it’s about quantity?

Cline: Well, you have to be careful too. At some point you reach market saturation, especially in Wenatchee. People also want to be outside here, so I don’t think you can do as many events in the summer here as you can do during the fall, winter and spring. That includes hockey games and those kinds of things too. This year the team did well and as a result we did well. But we couldn’t have four concerts and eight hockey games in a month because people are only going to come to the building so many times in a month.

WBJ: Unless they are different groups…

Cline: What we’re finding is that a lot of them are the same. There’s definitely a core group of people in the Valley that bought into the building and whatever is going on they are going to be here. They bought their tickets and they’re here for everything. Then there’s certain other things like family shows or a country or rock n’ roll act, then you bring in some of those other people specifically to that event. But there’s definitely a nice strong core of people that are just really supporting the building and here all the time.

WBJ: Do you find those are the hockey people?

Cline: The funny thing is I didn’t think there were that many hockey people in Wenatchee but with the season the Wild had we definitely have strong community support for the team.

WBJ: Was that a big surprise?

Cline: It was a surprise. Being involved with the hockey program for as many years as I have, I thought we could probably fill 1,500-2,000 seats a night and we far exceeded that. I think it’s a credit to the building. And the Wild did a great job putting a great product on there and entertaining people when they were here.

WBJ: How much did losing Wenatchee Fire affect the budget?

Cline: Well, we didn’t get the ticket revenue anyway, but income isn’t just about selling tickets. Typically the tenant gets the ticket money other than when we sell our personal seat license and then we get a part of that sale. So, for us, the lost income was in the facility fee and the admissions tax that go back to the building, and in the concession revenue. There’s a lot more to it than just selling the ticket. Not having those dates affected the total amount of income we could bring in.

WBJ: Anything else that affected the budget the first year besides startup costs, the Wenatchee Fire and a late opening?

Cline: Those are the major ones. We’ve really only lost one concert but I think any time there’s a new venue artists aren’t just going to phone you up. You have to sell it a little while, and you have to do a big show successfully. LeAnn Rimes was the perfect example.  We sold more tickets to her show than any other show she’s had since she started this tour. Once we did that and we showed we could fill the building for an event like that, the booking agents started to call us and say, “we’re routing so and so through the northwest, are you interested?” Before, it was us making the calls and saying, “Hey we have this building,” and so on, and you have to do that numerous times before you can get some of these artists to come. Now that we are on the radar we don’t have to prove ourselves again this coming year. It will be a lot easier to get acts on the dates we were dark this past year, and work with agents we were not able to work with before.

WBJ: So there’s a lag time in between when the building opens and when you start to get the events where it’s difficult to go out and sell a new building?

Cline: We never really knew what the finished date was so we didn’t book a lot in the fall. But as you look past January and through December on we had a pretty full calendar. At the beginning the hockey team was carrying the load for us but once we hit January we were booked solid.

WBJ: Do you perceive that if Global were to run the center another year they would have an easier time booking and the arena would be full for the next year?

Cline: Yes. In fact we have enough stuff on the books right now carrying us through January of next year. We are also working with the Wenatchee Wild who’d like to bring in the Robertson Cup next spring and that’s typically a slow time for us. So all the sudden we’ve got that opportunity to generate revenue in the building where we had basically nothing this year. Some of this stuff just takes a little bit of time. So, disappointed would be my reaction to the PFD’s actions. I think the second year will be a different story.

WBJ: So the next management company will have an easier time?

Cline: Yes. And that’s the sad thing for me. We’ve spent a lot of time booking for the next season …

WBJ: But Global is being judged on this one …

Cline: Yes. And somebody else is going to be judged on the work that we’ve already done. I don’t want to speak poorly of anybody but I do think it will be easier next year and I do believe the building will make money next year. There’s no doubt in my mind that you could make money in the building.

But I think you’d be hard pressed to find a startup company that made $1 million this year on anything.

WBJ: Did you see this management change coming or no?

Cline: I knew there was dissatisfaction but I was shocked by the decision, especially when they met with the Global representatives and came up with a list of things that they wanted to see happen and the company did meet all seven of those things as was brought out in the meeting. So it was a shock when they decided to terminate the agreement.

WBJ: What kind of feedback did you hear from the community?

Cline: The biggest thing I heard in the community was, “What’s going on?” That was the first reaction. And secondly since most of the staff grew up here or went to school here and have local ties, their next question was, “Do you still have a job?” People are worried about us.

WBJ: So is everyone here a Global employee then? Do they still have their jobs?

Cline: Yes and yes. And the city has come in and said they are happy with the performance of the local people, which is important. Their concern is with Global corporate. We still get a paycheck!

WBJ: And do you know what will happen to these positions?

Cline: Well, we’re working with the PFD and the city right now on a transition plan so that will all be determined shortly. Things are in motion.

We just don’t know at this time exactly how things are going to look.

WBJ: What are you proudest of?

Cline: For a person who grew up skating on an outdoor arena that was an old city of Wenatchee swimming pool to have my sons be able to play in a building like this, it’s pretty gratifying. It makes me feel good when I hear someone standing in line at the box office saying, “We wouldn’t be able to go to this show if it weren’t in Wenatchee.” So I believe we’ve brought something to the area that everybody can benefit from and be proud of.

WBJ: What was your biggest accomplishment here?

Cline: I don’t know. I don’t look at it as me. I didn’t do anything alone. Everybody worked together on the project. We have a small staff that has just been wonderful — nobody had done this in Wenatchee before, so we all learned together. It took us a little while longer to learn things but it was important to me to hire local people. Our operations crew is amazing. And Linda Haglund has just been terrific. She generated over $1 million in contracts for this startup business, and in these economic times, and in a building people hadn’t even seen.

WBJ: Anything you want the community to know?

Cline: The building is still going to be here. The building is a success. I believe this building is going to be not only a success by public opinion but also an economic success.

Do I think we’ll make a $1 million profit every year? No. But do I think we can cover the debt service on the building? Yes.

At the end of the day we’re not going to add any money to anybody’s purse, but I think we can cover the costs to pay for the building.

Read more about: Conversation, featured, Town Toyota Center