Hall of Fame Village CEO provides updates on Johnson Controls dispute, sports betting and restaurant openings during earnings call
CANTON, Ohio – The Hall of Fame Village announced its second quarter results and provided an update on many different issues surrounding the company Friday morning.
CEO Michael Crawford said he wants shareholders to hear from him on several issues, including an ongoing dispute with sponsor Johnson Controls, a warning from NASDAQ about its stock price being too low and an opening schedule for the tenants.
Crawford said the station team has worked extremely hard in the face of the challenges of inflation, a potential recession and supply chain issues. Still, visitors head to the Village.
“The one thing I know is that people are resilient, and you can never bet against the consumer,” Crawford said on the call with investors Friday.
Ongoing Johnson Control dispute
Johnson Controls, the title sponsor of the Hall of Fame Village, announced in May that it wanted to end two agreements with the station. One was related to his sponsorship. The other was a technology supply agreement for station buildings.
Both companies said the other was in breach of contract.
Crawford said on the call that the two companies will soon go to mediation. If it doesn’t end in an agreement, he said, the station will pursue binding arbitration.
“We can’t just accept that this relationship is broken,” Crawford said.
He said on the earnings call that the station has increased its sponsorship revenue, striking deals with companies like Molson Coors and Sugardale.
Tenants will begin to open
Crawford also provided an update on the resort’s tenants, who he said will open soon and start generating revenue.
Don Shula’s restaurant, the Brew Kettle, SMOOSH Cookies and Top Golf are all expected to open in the last three months of 2022, Crawford said.
A Build-a-Bear workshop and a Visit Canton office will open by October, he said.
Crawford said more businesses will open, creating a day-long experience for visitors to the Pro Football Hall of Fame, events or the resort’s sports complex. The Ferris wheel, which was moved from the IX Center, is also expected to open by the end of the year.
The Nasdaq put the village on notice in May. The station must get its stock price above $1 per share or face the possibility of being delisted.
Crawford said the Village could handle this in a number of ways, including trading above $1 for ten straight days, which it nearly did. The stock traded above $1 a share all Friday morning.
He said the station’s management team continued to discuss with experts the best way forward. The station has a full year, if it asks for an extension, to increase its share price.
Crawford also explained why he and the executives aren’t buying stocks themselves when they’re trading so cheap.
He said that the complex offered shares to board members as compensation and that he sold some shares to pay tax liability, because shares are considered income when distributed from this way. This practice prohibits them from buying shares for a period of six months.
Crawford said the station is changing that policy in the future so the management team and board members can trade more freely. He said he currently owns hundreds of thousands of shares in the company.
Sports games and media
Crawford said the Village continues to grow its gaming and media businesses.
On the media side, he said, there are many shows in development and a few in distribution. The Village is creating new shows and hiring talent.
He also hired an NFT developer and strategist to continue working in the digital collectibles industry.
In games, Crawford said, the station continues to expand its fantasy football offerings. He said they wanted to create a service that fantasy gamers can pay for, giving them information that makes them better gamers.
As for sports betting, the station applied for a Type A licensee to open a mobile bookmaker and partnered with Betr, a company founded by Jake Paul, to create the station’s sports betting app. .
The app is expected to go live Jan. 1, when sports betting will be allowed in Ohio.
Crawford said the retail sports betting site plans to open in the second quarter of 2023, which would be later than the universal start date.
The Hall of Fame Village recorded revenue of $2.7 million in the second quarter, driven by increased attendance and hotel revenue. Turnover is up 14% compared to the same period last year.
The station lost $9.2 million in the second quarter as it continues to build its campus.
Chief Financial Officer Ben Lee said the station expects revenue of around $20 million. Tips were reduced due to sponsorship money not coming from Johnson Controls.
Crawford said the station team continues to look for ways to generate revenue, but is focused on building right instead of building fast. The long-term business model has not changed, he said.