Hall of Fame Resort & Entertainment Company

Good morning and welcome to the Hall of Fame Resort and Entertainment Company's First Quarter 2021 Earnings Conference Call. This conference call is being recorded and all participants are in a listen-only mode. We will open the conference up for questions and answers following the prepared remarks. I would now like to turn the conference over to Anne Grafis, Executive Vice President of Public Affairs. Please proceed.

Good morning and thank you for joining us for our First Quarter 2021 Earnings Conference Call. Our latest press release, supplemental slides, and 10Q were posted Friday evening after market hours. These documents can be found in the investor relations section of our website at h-o-s-r-e-c-o.com. After this brief introduction, Michael Crawford, President and CEO, will give us an overview of the quarter's results and update on our fiscal year priorities. Jason Crum, our CFO, will then provide detailed analysis of the quarter's financial results an update of our fiscal 2021 outlook. During today's call, we will make forward-looking statements that reflect the company's current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. I encourage you to read the full disclosure concerning forward-looking statements in the earnings press release. Additionally, please note that the company uses non-GAAP results to evaluate performance internally as detailed in the press release. We have posted a supplementary side deck summarizing the quarterly results. These slides can be accessed on our website as well and will be archived there along with a replay of this call. If you have additional questions after today's call, please contact me directly. It's now my pleasure to turn the call over to President and CEO Michael Crawford.

Thank you, Anne. Good morning, everybody. Great to be with you today. I thought I'd start by speaking to just some broader business indicators we've experienced throughout Q1 and into Q2 that really continue to allow me to have a very positive outlook on the future of our company. Firstly, in Q1 and Q2, we're seeing significant improvement in leisure travel, which we had hoped would be the case. The US Travel Association is reporting Nine out of 10 people surveyed plan on taking a trip over the next six months. Hotel operators are reporting improving trends in rep are occupancy advanced bookings for leisure travel and some business travel as well. Live entertainment and events are coming back strong bookings are happening. They're being sold out in locations that are now allowing max capacity. I was very pleased last week to hear Governor Mike DeWine, the Governor of Ohio, talk about eliminating all of the COVID-19 health restrictions, related restrictions, the mask mandates, the reductions of capacity on indoor and outdoor events. This is all very positive for a couple of reasons. One, for our business, we're clearly wanting to welcome back and engage with guests and in social environments. seeing the COVID cases being reduced, watching vaccines being rolled out, and frankly, getting excited about people having the opportunity to protect their health is something that we're thrilled to see and excited to welcome those types of fans and activities back to our property. You'll recall a couple of weeks ago, I talked a little bit about the NFL draft and how successful that was, having a chance to meet with Commissioner Roger Goodell beforehand and talking about future partnership opportunities. And, in fact, in the coming days, we plan on meeting again to discuss those even further. But, you know, very proud of the fact that the NFL had an incredible 2020 season, playoffs, Super Bowl. The popularity of football has never been stronger, and we intend to leverage that in our business as we go forward. Also worth reminding everybody, we are a sports and entertainment company focused on investing at this time. We're investing in product. We're investing in experiences, relationships, partnerships, physical and virtual assets that will drive incredible new guests and fan engagement and shareholder value. You know, we entered 2021 with some very specific stated goals. We wanted to strengthen our balance sheet. We obviously wanted to obtain a construction loan and round out our capital stack to allow us to continue to build all these wonderful assets in Phase 2, but also run our business more broadly. Creating a destination, the Hall of Fame Village powered by Johnson Controls in Canton, Ohio, was a very high priority for us, and we started that. Building out our portfolio of media product, launching our gaming division with our Hall of Fantasy League, Continuing to build our slate of on-site programming, both sport and non-sport, and we've seen great progress on that, and I'll talk about that in a moment. And successfully building our hotel business and drive synergies with our on-site programming. The premise of our company is we drive synergy from one business unit to the other, creating uplift across our entire portfolio. And then lastly, we're a team and a team can be nimble and we can call audibles. And so we wanted to be flexible. And we wanted to focus on new business opportunities that create one of a kind experiences and product for our fans and guests to enjoy, while driving significant revenue and shareholder value for our company. And remembering, all of this was being done. And you know, the fact that we were focused on these things, in the middle of the world's most difficult time facing a global health pandemic, probably the most challenging time in the history of the world. The good news is we executed on many big plays in Q1, and we have continued that success entering into Q2. Before I talk about some of those accomplishments, though, I do want to just take a moment and talk about the recent SEC directive regarding the accounting treatment for all company warrants. We know this has caused a little bit of confusion for our investors. And while Jason will talk more about this, I'll just note a few key points. Number one, when this directive came out, the team was very proactive in making appropriate adjustments. We have always abided by SEC regulation, NASDAQ regulation, and we're a company that believes very much in transparency around what we do with our shareholders and investors. And so those warrants have been and will be converted into the liability section, and that's how we'll handle this going forward. The financial stability, though, of our company, its cash flows, our overall liquidity remain unchanged. We were the same company today as we were 15 minutes before that directive came out from the SEC, and we're very proud of the fact that, you know, while we restated earnings today, We did it in a very transparent and proactive way, and that's going to allow us to continue to build our company based on trust in the future with our shareholders and our investors. It's important to note that this was not only a situation that we faced, but hundreds of companies faced the same type of restatement. You know, rules change, regulations change, and we will always be on the forefront and understanding how those impact our company and communicating those to our investors and shareholders. So let me talk now about our Q1 accomplishments. And I'll start with our theme destination-based asset division. Look, the trend line for our hotel, our Hilton Doubletree, is progressing very well. We're headed in the right direction. Our synergistic business model is really starting to prove itself out where we have events and business travelers and others coming to the property, the destination, the village. We are allowing them to stay and eat and be accommodated in our hotel, and we expect that to continue to grow. And, in fact, we're seeing many now weeks and weekends throughout the summer and into our enshrinement events and a lot of the programming we'll be doing in Q3 and Q4, selling out this asset, which is fantastic. And so, you know, as I said earlier, the trend lines for hotel stays are improving with many across that industry. And it's also allowing us to create experience where we're hosting events and activities on-site on the Johnson Controls, the Hall of Fame Village powered by Johnson Controls, and still maintaining that very high-level guest experience in our own asset, our own hotel asset. Our Constellation Center for Excellence continues to progress with on-time and on-budget construction. And now we're in the tenanting process and the programming process. Very important we put the right companies in there to create an environment of excellence. Also the right programming, so clinics, coaches clinics, health clinics, things that will further the sport of football sport in general and create an environment for fans and guests to enjoy not only from a place to work and play but a place to be educated as well. And so look for more updates coming on that in the future months. But our plan is to have that open q3 by enshrinement and allow our guests to enjoy that experience in the western zone of our Tom Benson Hall of Fame Stadium. New fan events were booked, we announced several for the Hall of Fame village like the Women's Football Alliance Championships, our Highway 77 Music Festival, and many others. And we continue to hire top-notch talent focused on creating event opportunities, both leisure and business events, leveraging our assets on campus to the maximum. We started construction on a new fan experience. That's in our east end zone of Tom Pinson Hall of Fame Stadium. And this is a really important new experience. It provides food and beverage opportunity, sponsorship opportunity, event revenue. We can reorient the stadium, hosting content and concerts in multiple different ways that just didn't exist before. The goal of the company from our perspective is to always have an ROI mentality towards every investment we make. And so as we think about investing in one business vertical, we're always asking the question, How do we synergistically drive value through the other business verticals as well? Just another couple of things. We've started construction on the required infrastructure to support the other assets being built in Phase 2. That's stuff that you don't necessarily see but is critical for the long-term success, so roadway alignment, sewers, water, everything that you need to see that costs into the millions of dollars that sets up our ability to create the assets that we will be building the remainder of this year, our retail promenade, our center for performance, another hotel, our water park, our play action plaza, all of the things that will be built over the course of this coming year and into 2022 as well. In addition, our youth sports complex is being expanded with additional facilities to accommodate athletes and fans. and also allowing us to host even bigger tournaments and events, driving greater revenue and profitability in this line of business. Speaking of youth sports, I will just mention that Q1 was still a fairly restricted environment for our youth sports business. We did, though, see a significant increase in bookings for Q2 and beyond, and over the last several weekends, it's been amazing to be out at our youth football and sports complex watching thousands of athletes, families, and community members participate play at an extremely high level major events in the fields in the sport of soccer and cross and flag football. We even hosted a flag football event on behalf of the NFL as part of the NFL draft in Cleveland just a few weeks ago. Let me move on to our media business because this is really really taking off and you may have seen an announcement just a few moments ago a brand new partnership with Tupelo Honey, World Chase Tag, and ESPN to produce this tournament, this tag tournament that has become such a cultural phenomenon. We will be producing it around our campus, live to air, Q3, and that will happen around our enshrinement event in early August. So we're excited about yet another new partnership, leveraging our content, allowing us to bring expertise to bear, and creating value for our shareholders. But in Q1, we did sign several new media partnerships and have started the process of production and distribution of those previously announced deals, those things like the NFL Alumni Academy, our Inspired series, the Perfect 10 documentary that documents or depicts the 10 gentlemen who have won a Heisman Trophy and also went on to be inducted into the Pro Football Hall of Fame. And there's many more in the pipeline that we're excited about talking about in the near and long term. You know, the other thing that we continue to make great progress on with our media division is we have the ability and we've shown the ability to leverage our access to great content and intellectual property and be flexible and nimble in creating new product and experiences for our fans and guests to enjoy. And I'm talking about the non-fungible token business. There's been several releases that we've put out depicting how we engaged Dolphin Entertainment as our partner, how we signed a deal with Elite Holdings to begin our first non-fungible token releases to be centered around those 10 athletes that I just spoke about. And in fact, today, I'm very pleased to announce that later today, this afternoon, our first two assets will go on sale centered around one of the best wide receivers to ever play the game, in my opinion, Tim Brown, or touchdown Timmy, as people like to refer to him. He'll be on ESPN today talking about that. We have created, I think, with Dolphin, two amazing products, two different types of products. for fans to enjoy and own. The first of which is an original one-of-a-kind piece of digital art created by our artist Shane Griffin. And this will be a one-of-one, and it will be distributed through the OpenSea distribution channel beginning today, an auction style of distribution, and it will be on auction for several days. The second we're referring to is a digital player cart. And we've named this card Playbooks, right? Playbooks and football are very important. They create an opportunity to succeed. And as you see these products, there is a lot of movement. There is a lot of direction and focus. Playbooks puts you in the helmet of the player and shows you the career that that player has had. And by the way, it's not only showing you, it's being narrated by that player. So I could not be more excited about these one of a kind products. There's really nothing like these out on the market today. I think they will bring great value for our fans. It's always our goal to create product that no one else is doing. And I think they'll create generate and generate great revenue for us as a company, a new model of revenue that frankly, we never counted on as we conceived our business strategy. But again, to the credit of the team, we have been able to pivot and I believe deliver something that will be spectacular. Again, these go on sale today and will be on sale for the next several days. But we don't finish with one. Our goal is to launch two of these a month for the next several months and into the next several years. We think this is a new pipeline of creative product that is being highly demanded in the digital art space. And we are working with one of the best partners in that space in Dolphin Entertainment and hiring some of the best artists out there to help us create this new product. By the way, as I said, we have two new products. We're looking at a third new product. And so, always we want to be creative and give our guests something to be amazed by and something that they'll be proud to own. Moving into our gaming division, our third business vertical, as promised, we did launch our Hall of Fantasy Football League. It is the first franchise-based fantasy football model where participants can back or take a stake in a team. We announced our league with 10 teams. It'll be a 13-week season, three weeks of playoffs, and a championship game. I can't even begin to tell you how excited we were to get those out. I think the team locations, the names, and the brands have been amazing. very well received. They're very fun and engaging. We had staking start. The first day we staked out two of our teams three times and one of our teams two times. So we've actually had to stop the staking of a few teams multiple times, which is really encouraging given the fact that we haven't even announced the front offices or drafted the teams. And so there's a lot more that we're going to be doing to activate this league. Over the next couple of months, we'll be announcing those front offices. We'll be announcing the commissioner of our league. We'll be launching our mobile app and a lot of other activations. By the way, worth mentioning that we also launched our online merchandise store for this league. So yet another way for fans to own a piece of the league and support their team and drive revenue for us as a company. As I said, we have more big activations coming, and frankly, we're really excited about the direction that this league is going and the way in which fans are appreciating the difference in the model, allowing fantasy to become a team-based sport and allowing them to cheer for a team and own a piece of merchandise and really feel part of a community. Our goal is to continue to allow these communities to be built, and I think we're off to a very strong start in terms of how those communities are growing. You know, we've talked a little bit about this gaming vertical and what else could be included here. Obviously, esports is something that we're keeping an eye on and how we can be a host of tournaments and how we can leverage those to drive visitation to our destination, but also allow us to add value into our youth sports component of our business. and our media component of our business. And so we continue to take a look at that. But the next probable stop for us in gaming is sports betting. And you've heard me talk about this before. We have engaged with multiple different consultants, lobbyists, legislators to really understand the dynamic of sports betting. It was exciting to see last week the bill being introduced by the Senate that would allow for a vote to be taken on legalizing sports betting in Ohio. And as I previously also stated, we have been in very detailed discussions with potential sports betting partners. Our goal is to allow fans to engage in ways in which they want with the sport of football and other sport in general and sports betting just enhances that engagement from our perspective. We look forward to having potentially an on-site presence, a sports betting presence at our destination in Canton at the Halton Village Powered by Johnson Controls, our Fantasy League where teams can play each other virtually, potentially sports betting around that, sponsorship activity, a lot of different ways in which we can bring value to a sports betting partner and a sports betting partner can complement and enhance what we're doing as a company as well. Finally, over q1, we continue to sign new partner and sponsorship deals. But we were very pragmatic around these types of deals, meaning when we need to have engagement with companies throughout the company's lifecycle, we want to have meaningful discussions and sign partners that will help enhance and strengthen our service and complement the product that guests will experience as they visit our destination. And, frankly, now we're beginning to focus on strategic sponsor partners across all of our business units, media, gaming, and the destination-based assets, with many more of those to come. We're looking forward to announcements around new retail tenants, sponsor partners, operational partners, and I think that will only enhance and strengthen our company's core capabilities of execution and delivering a one-of-a-kind product for our guests to enjoy. So a very exciting Q1, a lot of production, and heading into Q2, we see that momentum growing even more with those broad global indicators that I talked about with people's desire to get back out and be social in destinations and engage with great product, and there couldn't be more excitement around the 2021 NFL football season. So let me now stop for a moment. I'll turn it over to Jason and have him provide our financial result updates for Q1 and beyond.