Despite the presence of several big names like Madonna and Metallica and attendance records to junior hockey, the first four months of the Vidéotron Centre have resulted in a heavy operating loss. Quebecor has lost at least $ 1.4 million in the adventure, a bill that will be borne 50% by the taxpayers of Quebec.
This information, revealed Monday morning by the Leader of the Opposition in the City Hall of Quebec, far exceed the forecasts made by Mayor Regis Labeaume. He had instead predicted a bill of about $ 600,000 per year to the City, without the presence of a team of the National Hockey League (NHL).
“If 2016 is a reflection of what have been the last four months of 2015, when there was still a lot of events, there is talk of a potential deficit of 2.2 million a year,” denounced La Presse Councillor Paul Shoiry, Québec Democracy party leader.
Under an agreement with QMI Entertainment – a subsidiary of Quebecor – for the management of the amphitheater, the City of Quebec must assume half the operating deficits of up to 2.5 million per year. The municipality owns the building, financed with 370 million in public funds.
“Things have to hide?”
How to explain the losses incurred since the inauguration of 8 September 2015? Impossible to know it. The Labeaume administration signed a letter agreement with Quebecor in February to keep confidential the financial statements of the amphitheater.
Representatives of the city – including the Treasurer – visited the offices of QMI few weeks ago to read it. They were allowed to take “personal notes” but no official document is kept in the town hall. This allows Quebec to evade the law on access to public documents.
“We must trust the treasurer of the city, but it still would have been interesting to know which is expensive, and making it so there is an operating deficit. It makes us just say: Is there something to hide in there, “says Shoiry?.
Michel Magnan, financial accounting professor at Concordia University, is also “amazing” the veil of secrecy surrounding the activities of Videotron Centre.
“What made the losses? Is the level of spending is appropriate? Is there any charges that are imposed by the parent company Quebecor Centre [Vidéotron]? Nor was any kind of idea. Hopefully the City staff will review the information is fairly rail in financial analysis, “said Mr. Magnan.
Without assuming any wrongdoing whatsoever, Concordia expert believes this approach raises several issues about “accountability, transparency and good governance.”
The executive committee and the city council of Quebec approved Monday night the payment of a check for $ 729,167 to QMI, to cover half the operating losses incurred during the first four months of exercise of the amphitheater.
The City had expected a flow of money of $ 1.3 million for the first months of operation of the amphitheater, but she ultimately had to settle for $ 370,000. This amount was drawn largely a fee of $ 4 on ticket sales and parking revenues ($ 36,000). QMI Entertainment has not paid rent in Quebec because of its operating deficit.
Régis Labeaume has not shown at all worried about the deficit of the first month. “We can not think that in the first four months, a start-up will make surplus, he told the council Monday night. I’ve never seen that. ”
The mayor recalled that Quebecor had already paid 33 million Vidéotron to display the logo on the arena, and he repeated that the city “is never at risk” in the context of the agreement with the company .
At Quebecor, spokesman Martin Tremblay was also keen to defend the record of the group to date. He believes it is “normal and expected” that a company take a few years to return on a new project.
“It was clear that the first of Videotron Centre operating year would require non-recurring start-up costs, he said. It was also predictable that the operation of such amphitheater requires adjustments in the first months to optimize operations. ”
Anyway, Quebecor – and Quebec City – will likely adjust the financial model Videotron Centre to achieve profitability without a professional hockey team in the short term at least. Unless a major turnaround, the Governors of the National Hockey League will announce tomorrow that they have retained one city for expansion or Las Vegas.