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spk06: Good morning and welcome to the Hall of Fame Resort and Entertainment Company's first quarter 2022 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 will turn the conference over to Anne Grafis, Executive Vice President, Public Affairs. Please proceed.
spk05: Good morning. Thank you for joining us for our first quarter 2022 earnings conference call. Our latest press release, supplemental slides, and form 10-Q were posted yesterday evening after market hours. These documents can be found in the investor relations section of our website at hofreco.com. After this brief introduction, Michael Crawford, our president and CEO, will give an overview of the quarter's results and an update on our fiscal year priorities. Benjamin Lee, Chief Financial Officer, will then provide analysis of the quarter's financial results, as well as an update of our fiscal 2022 financial 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 your press release. Additionally, please note that the company uses non-GAAP results to evaluate performance internally as detailed in our press release. We have posted a supplementary slide deck summarizing the quarterly results. These slides can be accessed on our website and will be archived there along with a replay of this call. If you have any additional questions after today's call, please don't hesitate to reach out to me anytime. Now my pleasure to turn the call over to Michael Crawford.
spk02: Thank you, Anne. Good morning, everybody. I hope everyone is enjoying some spring weather. I know here in Canton, finally, the weather has broken, and it's being supportive of construction here, and we're excited about the progress we're making. I thought I'd start out by just talking a little bit about some of the macro trends that I'm sure we're all seeing and reading about. Clearly, volatility in the stock market. Excuse me, I've been fighting a cold. rising interest rates, inflation, of course, an unfortunate and sad war in Ukraine, and our pandemic, you know, COVID continues. All of this has caused pressures, as you can imagine, on the work that we're doing. Supply chain disruptions continue, and we're dealing with them on a daily basis. Now, here's the good news. When we went public, a great majority of those parade of horribles that I just talked about were already in motion. And so you're talking about a company that is used to operating in a very, very difficult environment. And I think, as you've seen by this quarter and previous quarters, the success that we're having is still very encouraging, and I hope you're encouraged as much by it as I am. A couple of key things, though, that are of note. that we take away as positives. Consumer spending remains elevated. Unemployment remains low. Consumer travel, entertainment experiences, those trends are continuing to improve and be highly demanded. Airline travel is growing and growing every single day stronger. And, of course, amusement parks, themed attractions, sporting events, all of these things are becoming highly demanded as we knew and predicted they would at this time last year as social beings like to be in these environments and certainly it's been very encouraging to see the uptick in all of those things I just mentioned. I think over the last quarter professional football has taken tremendous steps forward in terms of its popularity, not that it needed to because it's already the most popular sport in America. But as you watch the Combine, a multi-day event with multi-millions of viewers watching young men with their skills testing and their interviews and really trying to achieve their dreams of becoming an NFL player, it was a very compelling television show to be seen. I had the privilege of being out at the draft in Las Vegas this year. Las Vegas did a fantastic job. of putting on one of the best drafts that I've seen in recent years. The viewership of the draft averaged about 12.6 million viewers, at least in the first round or two. Let's compare that to other sports for a moment. And I don't mean this to sound like we're knocking other sports. I'm a sports fan in general. But 12.6 million viewers compared to 10 million average viewers per game last year for the NBA Finals. 12 million viewers per game last year for the World Series. I think it says something about America's hunger and passion for the sport of professional football. And as you look ahead, there is a television show that's going to be aired with the unveiling of the season and the schedules for all of the teams. And so this continued desire to understand better who is playing, when they're playing, and how the teams are progressing and maturing is something we take great uh, courage or excitement from. And we think that as we build our company, uh, it will benefit us greatly. We've talked a little bit about, uh, the USFL and the fact that we're going to be hosting the semifinals and championships here in Canton, Ohio at our Tom Benson hall of fame stadium. That league has been doing incredibly well with viewership as well, uh, on Fox 1 million viewers per game in its inaugural season. Um, and the XFL, of course, uh, with the rock and, um, multiple others that will be launching next year. It just speaks to the fact that people want to have access to professional football year-round. And so it's incredibly exciting for us as a destination and as a company building off of the power of professional football to see the growth and the excitement around how the fans are engaging with all of these different events. I'll talk in a moment about the progress in Q1 across all our business verticals. But I'd just like to start by saying, you know, for us, success starts with adding team members or having team members, and as we put them on the field, giving them the opportunity to perform. And we were very fortunate in Q1 to hire Ben Lee as our CFO. You'll hear from Ben in just a moment, but Ben has been a tremendous add and already has contributed greatly to many of the things that we'll talk about. So it's exciting to have Ben on the call with me. To begin, I thought it was worth noting a couple of really big transactions that occurred in Q1 outside of the normal business vertical progress that we've been making, both with significant shareholders for Hall of Fame Resort and Entertainment Company. You may have seen the restructuring of and extending of debt to the tune of $38 million. This was done in partnership with our largest shareholder, Industrial Realty Group. This paid off short, near-term debt, expensive debt, and extended the debt profile for the company in a way that allows us to bring in other more reasonably priced debt and to have a payback profile that's much more manageable. So we're incredibly thankful to IRG for the support on that front. The second thing that happened is we finished a new licensing agreement with the Pro Football Hall of Fame. Again, one of our largest shareholders, and I believe this new agreement aligns our interest even more closely. Clearly, the Pro Football Hall of Fame is the cornerstone of everything we're doing here. It's an anchor attraction. It's a museum that celebrates the best that's ever played the game or contributed to the game. This new license agreement significantly reduces the cost of our annual payment to the Pro Football Hall of Fame. It expanded the fields of exclusivity, meaning our rights to use the brand and the memorabilia. And it also gave us a first right of refusal for those areas of development where we might not have had exclusive rights in the past. I think the key message or the takeaway here is the relationship with the Hall of Fame has gotten stronger and stronger over the recent months, and we are doing more and more together, and I'm excited about that, and I'll talk about that in just a few moments. Let me start with theme destination-based assets, one of our key verticals, and specifically the Hall of Fame Village. Construction is now in full swing. We had a difficult winter. The spring had a lot of rain, but let me just say this. The Center for Performance, on time, end of July, is our projection for opening that facility. Play Action Plaza, on time, substantially opened by enshrinement, certainly completed by end of summer. A brand new opportunity for guest experiences and a new opportunity to drive revenue for our destination. The expansion and enhancement facility of our sports complex on time and to be completed by early July. And then lastly, the infrastructure that has been necessary, so critical to allow us to continue to build our hotel and our water park, again, all moving and progressing on time. And we hope to be able to start our hotel water park combination over the next couple of months. And we'll talk about the financing that's going in place to support that. And then finally the fan engagement zone. We have completed that area. We are now starting the tenanting process. The tenants are starting to do their fit out in some locations and we're incredibly excited about the direction that that's going to be and how that is going to be an area that we can really energize during enshrinement. That's our goal to have that completed and up and running, at least substantially with several of the tenants serving our guests and fans during that critical weekend for us. I'll move to the Doubletree Hotel in downtown Canton. We were impacted by the COVID, the Omicron variant in January. No question about it. There was a surge. Having said that, if you look at occupancy and our ADRs year over year, both were substantially up. And so the trend line for our hotel is exactly as we had talked about before. It's headed in the right direction. This hotel remains in the top 5% of customer service for all DoubleTree hotels, which is incredible and a testament to how strong that team is there and how seriously we take the customer experience and will continue to do that. And it's a model for us. It really offered us an opportunity to prove out the synergy model. When we bring events to campus at the Village, our hotel is full. And we predict that same type of occurrence will happen as we build our second hotel onsite. The more activity events, the more assets that we create here, the more uplift we have in assets like our hotels, our food and beverage locations, and our entertainment locations. So very proud of the team at the Doubletree. The village itself, the Center for Performance, in Q1 we announced that we were going to be partnering with a local sports dome that has hosted many, many sporting events over the previous years. They're going to be closing, and we're going to be transitioning a lot of that business into our new facility here on campus. That's exciting for us because it's immediate business built in year one, and we're very fortunate to be able to transfer that business over. In addition to that, we've hired and brought on an experienced operations manager that is very savvy at attracting new business and running these types of facilities. And again, as I said, the Center for Performance is on time, and we're looking forward to opening that in late July. This gives us the opportunity to build business year-round, and that's what we've been missing in the winter months. And it expands opportunities for not only sports but entertainment as well, and it offers additional synergies, as I just mentioned, across campus. during those non-peak months. In terms of our stadium, the Tom Benson Hall of Fame Stadium, we are beginning to host many outside events. In fact, as I look out today onto the field, I see a skills test challenge going on out there. We've had multiple private bookings in Q1, 14 to be exact. We've got multiple more on the books for Q2. And so our goal is to continue to operationalize our number one asset here, which is our stadium. And you will have seen and I'll talk in a moment about the multiple different events, concerts, sporting events, et cetera. The event slate is really, really growing over the course of this year as we come back to a more normalized version of the world that was monopolized by COVID. Moving on to our media vertical. While we're still in the early stages, I think you probably have seen we have really started to build key partnerships and branded content. And media for us I think will be a significant addition in terms of our guest and fan experience, but also synergy with onsite activity and with our gaming division. And you can see from what we did last year as we broadcast a streaming show on Twitch for our Hall of Fantasy League. Our goal is to think about how we synergistically develop business and media offers us that opportunity. In Q1, we signed a partnership agreement with Rashad Jennings. The show that is in development right now is a show that we're calling What It Takes. And Rashad really goes and explores with different athletes that have excelled in different sports and what it takes physically, emotionally, mentally to be successful. We think this is going to be a really interesting show and one that sort of bridges the gap between football and other sports and talks to the commonality of the different attributes that athletes need to be successful. We've talked a lot about a couple of big shows for us, the Perfect Ten show, and the Academy. Let me give you an update what has occurred in Q1 on The Perfect Ten. We completed filming in Q4 of last year. In Q1, we've gone into post-production, and now we're in discussion on distribution over the next couple of months. We anticipate this show airing on a key distribution channel early next year. And so we're excited to highlight the story of those 10 gentlemen who've won a Heisman Trophy and gone on to be inducted into the Pro Football Hall of Fame. The Academy, the Developmental Academy, we run here in partnership with the NFL Alumni Association, finished filming its last season in Q1. And now we are wrapping post-production and starting distribution discussions. We have had those distribution discussions going on for the past couple of months. and we anticipate launching that show in parallel with this upcoming NFL season. So it's very exciting to see in a very short period of time some of this media content coming to life. You may recall the typical pipeline is about a one- to three-year process, and our media team is really hitting on all strides and getting some of this content out in partnership with other key development partners and distribution partners. We've also had a key talent acquisition hire in Q1, bringing on a new head of business development. Again, business development in any company is critical. We think we have a strong business development leader now that will come in and help garner new shows and grow our portfolio and our pipeline of content. Speaking of that, while not in Q1, Hopefully you saw the recent announcement with Hall of Fame coach Jimmy Johnson and a show that we're calling Gone Fishing with a Hall of Famer. I can tell you personally, I think this show is going to have a lot of legs. Jimmy is an incredible personality. We were very fortunate to partner with him and we look forward to getting into shooting this content in the very near future. Also in our media division is the work that we're doing on NFTs, the non-fungible tokens. And I realize that, you know, we have had multiple discussions about NFTs. That space is continuing to evolve and grow. But one significant milestone, again, strengthening our partnership with the Pro Football Hall of Fame. This is a community-based league that is focused on franchises. The feedback that we got was it would have been great to have more ongoing engagement activities. It would have been great to be able to come in throughout the season versus you had to be a part of the league at the start of the season. We've listened to all of that. And by the way, we've hired an incredibly experienced and passionate leader in Rob Borme to now take this on and evolve this product to an even higher level. More events, more fantasy challenges, more ways to win, while still maintaining the integrity of what we've established and leveraging our intellectual property that no one else has access to. By the way, look forward to the expansion of the league and an announcement of that coming very soon. We've talked a lot about sports betting. The goal for us in Q1 was to position ourselves to be fully ready and capable of the application process being successful for us. There has been a lot of discussion between our team and the Ohio Casino Control Commission, the consultants that we've had on, the legal support that we've had on, and the application window we now know opens in June, June 15th to be exact, and we've had the right advisors to best position us for success in obtaining the two necessary licenses that we will need for retail outlet and for mobile gaming. So stay tuned on that front, but we are very focused on the next month, ensuring that our application process goes well. And lastly, in gaming, we spent a lot of Q1 talking with different esports tournament hosts, and we think we're going to position ourselves quite nicely with the Center for Performance and some of the other assets that we're gonna be opening to host multiple esport tournaments here this year and in the coming years, bringing a different type of crowd to campus, allowing us again to re-energize in peak and non-peak periods. I'll conclude just by talking about partnerships and sponsorships before I turn it over to Ben. As we've spoken in the past, this is a company that has the luxury of being affiliated with professional football. It also has brands like the NFL Alumni Association and the Pro Football Hall of Fame and an indirect opportunity to partner with the NFL itself on these types of activities. In Q1, we signed five new sponsorship deals, substantial deals. And we are continuing to strategically maximize the sponsorship or partnership dollars in each category, which means we're not really inclined to engage on everything until we have the critical mass in terms of assets, media content, gaming content, and events that will allow us to maximize the revenue achieved in the partnership category. While we were thoughtful about those categories, we did sign for Everlon to a naming rights partnership for our sports complex. We signed the Cleveland Clinic, a world-class healthcare provider that will provide healthcare for our stadium and sports complex. Both of those deals were not only partnerships, but they were sponsorships that netted the company substantial revenue from those sponsors as well. And we continue to look at new opportunities to increase the volume of sponsorships with events. And I think we've done a good job of that in the past. And our team now, we have brought on team members that are very focused on creating the value that we need and outside consultants that have great experience in bringing the best possible sponsors for us to partner with that will leverage their expertise and subject matter in our end service and combine it with our intellectual property and the experiences were created. So very exciting Q1, lots of progress. And as you've seen in our financials, we continue to grow. We continue to grow revenue. We continue to build. We continue to grow in our other two business verticals with media and gaming, and I'm proud of the effort that the team has put forward. And more importantly, the trend line that we're seeing is one that's very positive and one that we look forward to driving value for our shareholders for years to come. Let me stop now and turn it over to our new CFO, Ben Lee, for our financial review, and then I'll come back and kind of talk about the next coming quarter and some exciting things that we have going on. Ben?
spk04: Thanks, Mike, and good morning, everyone. So I'm excited to be here on my first earnings call as chief financial officer. At this point, I've only been with the company for a very short time, but already two things really stick out to me. First, I'm constantly amazed by the strength of the team, which explains why this group's been able to accomplish what it has thus far, even in the face of a global pandemic. And then second is the pace at which the team works towards achieving our short-term, long-term goals, which again, to me, speaks to their motivation and belief in the vision that we're working so hard to accomplish here. For me, I really look forward to being part of the leadership team as the company moves ahead. Moving into results, and as Anne mentioned earlier, we filed our first quarter 2022 Form 10-Q post-market yesterday. That document is available on the SEC website as well as our investor relations site. First quarter total revenue was $2.1 million, which represents an increase of 10% from the prior year. Revenue growth was primarily driven by the Double C Hotel and event revenue at Tom Benson's Hall of Fame Stadium. Sponsorship revenue was down from the prior year due to the Johnson Controls partnership, as Mike discussed in his comments. First quarter adjusted EBITDA was a minus $6.9 million driven by operating and hotel operating expenses. We remain diligent in our balancing operating expenses while investing in the future across all three of our business verticals. The company posted a net loss of $8.1 million, partially offset by the accounting treatment
spk06: Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from Jack Van Ender with Maxim Group. Please proceed.
spk00: Great. Good morning. Hi, Michael. Hi, Benjamin. I appreciate the quarterly update. Thanks for taking my questions. Mike, I'd like to start with a few questions on the major recent sports betting partnerships you've announced, you know, the 10-year agreement with Genesis and the 10-year with Rush Street Interactive. Do you have any updates on the general Ohio sports betting licensing process? And once licenses are officially granted, any visibility or thoughts on the timing and initial rollout of the retail betting operation and the mobile betting operation?
spk02: Maybe what we could do, and I apologize, it appears as though we've cut out a little bit. I think Ben is still in his comments and I'm going to be wrapping up. So, If we can wait for questions just for another few minutes, we'll absolutely be prepared to answer that if that's okay.
spk00: Absolutely. Go for it.
spk02: Thank you.
spk04: I'm not sure exactly where we cut off, but I was on the balance sheet, so I'll start there again. Moving to the balance sheet, we finished the quarter with a cash balance of approximately $13 million compared to $17 million at the end of the fourth quarter. Both values are inclusive of our restricted cash balances. The company's primary usage of cash will continue to be driven by construction expenditures with approximately $20 million spent during the first quarter. This cash usage was offset by proceeds from the sale of common stock under the ATM cash flow from operations. Our net debt balance increased to $104 million compared to $101 million at the end of the fourth quarter. The increase in notes payable was primarily related to increased principal amounts, related to the Constellation Center for Excellence construction draws for tenant build-outs. Regarding debt, we recently closed a $4 million loan with Midwest Lender, an entity controlled by board member Stuart Lichter. The company's largest shareholder continues to invest in the company with the recent loan, debt restructuring in March, and purchasing shares in the open market following the fourth quarter earnings call. These actions show confidence the company continues to execute on its near-term goals and the expectation that the company will create shareholder value over the longer term. I'd also like to give a bit more detail on construction financing. We highlighted on the fourth quarter earnings call that we have received multiple millions of dollars of term sheets this calendar year. More specifically, $75 million in PACE financing, over $65 million in senior construction loans, and $13 million in ground lease financing for multiple financial institutions. Over the next couple of months, we will be closing those loans and will provide updates as financing gets finalized. We found an ATM, or at-the-market offering, in the third quarter of 2021, offering for up to $50 million. We've primarily used this tool to round out the necessary equity needed for construction finance. As we disclosed in our Form 10Q, we've raised approximately $19 million for 38% of the offering. We've been prudent in our usage to maximize shareholder value. The expected Phase 2 total construction spend is not material that changed, and we're working to make sure that we have the right financing with the ideal structure for our company and shareholders. In fiscal year 2022, we expect construction spend to average in the mid-teens millions of dollars per quarter. We are reiterating our fiscal 2022 guidance with revenue in the mid $30 million range and adjusted EBIT up expected to be in the negative mid teens and millions. This accounts for continued investment across all verticals as we add capabilities and expect to open some of our phase two assets here on campus around mid 2022. Sports betting was not legal in Ohio at the time of our initial guidance and with the procurement of the necessary licenses, that will either provide upside potential or risk mitigation to our targets. I want to reiterate that our longer-term goalposts have not moved, and by the time construction on Phase 2 is fully complete and operational, we continue to target $150 million of annual run rate revenue and approximately $50 million of annual run rate adjusted unit up across the key pillars. Those key pillars, again, are destination-based assets, our media platform, and our gaming verticals. The revenue and EBITDA generation will be diversified across multiple streams, and each one will drive synergies to support the ecosystem that we're building. In closing, the team continues to execute on the financial priorities that we've communicated. We also remain committed to maintaining a balance sheet that provides financial flexibility through our growth phase to deliver long-term value to all of our shareholders. Now, let me turn it back to Mike, who will provide some closing comments.
spk02: Thanks, Ben. Very good update and appreciate you being on board. As Ben said, I'll just say this again. The amount of construction financing that we have now executed and will continue to close over the next, I'll call it month and a half, two months, really does give us the ability, as we've talked about, to create all of the assets, build the media content, and create the gaming environments that we have promised to our shareholders. One thing that is a recent development and I'm incredibly proud to talk about is we work a lot with our local community. Our community here is incredibly supportive. They are always looking for ways to help support our destination in Canton. Whether people know it or not, Stark County, where our destination is located, does about $1.8 billion in annual visitor spending from a tourism point of view. One in 13 jobs in Stark County are tourism jobs. 8% of the economic activity in Stark County is attributed to tourism. So we have a very strong relationship with our regional tourism and visitors bureau. And they have agreed to a seven-figure retail presence here where they will contribute and pay in advance 10 years of their lease obligation, their retail fit-out, and become part of the fabric of what we're doing here, allowing our guests and fans to understand and be a part of the Visitor Bureau experience, giving them more access to things throughout Canton and Stark County. So an incredibly exciting new deal that we're looking forward to closing next week, and thank you to our Visit Canton partners. The second thing that is exciting from a community point of view, we've been working closely with the Stark County Community Redevelopment Fund. And as of this week, they have agreed to and approved a $5 million at market rate loan for the continued development of assets here at the Village. What both of these things speak to is the commitment by our community to make us successful and to stand behind us as a company. They are incredibly invested. in what we're doing, they see the value, the economic growth for the city, the county, the region, but more importantly, they just believe deeply in this team and the accomplishments we've had has been said in a very difficult environment. We came into 22 with several key objectives, construction financing obviously one, construction schedule two, building our media pipeline, building and developing our gaming vertical, adding more sponsors and partners, creating an even bigger event pipeline, which I think we're showing we're doing with both sport and non-sport events, and then teneting and growing the experiences in both the Center for Excellence and our fan engagement zone, which we've also had great success at. And certainly last but not least, achieving our financial objectives, which Ben just reiterated that we are still very focused on and reaffirmed our previous numbers that we had announced. The village itself, revenue growth is coming. It's coming in multiple ways. Certainly attendance to the destination, bigger events, our F&B and entertainment experiences as those open, things like Play Action Plaza, our fan engagement zone. Sponsorship growth is something that we're projecting for this year as well, and then the Center for Excellence tenant leases and other types of programming. We're creating a destination for everybody, for all occasions, something that is year-round and something that's been needed, frankly, in Ohio and this part of the country for quite some time. And I think as we continue to do this, we are committed to excellent experiences, committed to excellent service, and committed to creating unique opportunities for our guests and fans to enjoy. The Center for Performance, on time, July. But here's something that is another piece of great news. With our strengthening relationship with the Pro Football Hall of Fame, they have agreed to host multiple major enshrinement events, creating immediate revenue growth for us as a company in this new asset. This is a testament to the synergy that can be achieved between events that we host, events that the Hall of Fame hosts. Our goal, drive attendance to them. Their goal, drive events and attendance to us. And I think this is a prime example that we've just now talked about as an immediate source of revenue, and more importantly, a way to keep fans on our campus eating in our restaurants, enjoying our destination. So I'm very appreciative to Jim Porter and his team there for that type of support and partnership. We continue to bring Tom Benson Hall of Fame Stadium to life. We have now a stadium tour that also generates excitement for our guests going through the 33rd NFL-certified football stadium. And this year we're going to be launching a skills test attraction inside that stadium as well where fans can come out and run a combine on their own. Again, engaging with sport and a revenue opportunity that has not been previously communicated. We have a lot of upcoming events inside the stadium. I talked about the USFL semifinal and championship games. We have a fatherhood festival. I think this is a great community event, but it's a big community event. Several Hall of Famers, Mike Singletary, Anthony Munoz, Kurt Warner, all participating in one shape or form. We will be showing Kurt Warner's recently launched movie, American Underdog. We will have Jordan Davis here performing a concert. This is an exciting three-day event that will generate revenue for us, but just as important to that, create magical and wonderful memorable experiences for guests, families, fathers, children to come for years. The Women's Football Alliance Championships, this is our second year with the intention of growing this event, coming in the very near term. Of course, enshrinement. I talked about more events on campus leads to more guests and higher guest experiences and more revenue for us as a company. This is the first year, again, with the strengthening partnership with the Pro Football Hall of Fame that the Hall of Fame Village will actually take over and lead the concert for Legends. Hall of Fame band Journey playing for Hall of Fame, Hall of Famers, Pro Football Hall of Famers and their fans. Who could ask for something better? This is going to be a fantastic concert and in fact, ticket sales have been tracking considerably favorably ahead. And we are ahead of our ticket sales projections, and we think this is going to be a great evening here on campus. And it's the first time, as I said, that we have taken over this event as part of an enshrinement weekend celebration. The stadium has announced many other big events, and we are in the process of finalizing several more. Our goal is to, quarter over quarter, continue to grow sporting events, non-sporting events, private functions, And we think we have the team now in place that can continue to help us do that. For the Center for Excellence, teneting is our goal. We have several large tenants in the final throws, hopefully to be signing in the very near term. Again, I apologize for my cold. We have tenants that have started their fit out. And so this facility is coming to life very quickly. It's an incredible facility. For thought leadership, we've had multiple different events here as well, and we'll continue to grow those events in our Chalk Talk facility in the coming months. Play Action Plaza, we talked about this in Q1, but in addition to our football-themed water park, our talk golf experience, and, of course, our Pro Football Hall of Fame museum attraction, we are going to add two new rides to Stark County. the red zone, and the forward pass. These two new attractions for our campus represent incremental revenue. They represent also an opportunity to mitigate risk where we may miss revenue in other areas. We'll have an outdoor bar area. We'll have a gaming area. We'll have an amphitheater that we can program with smaller concerts and events. This will be an area that will engage fans and allow them to have outdoor activities fun with their family and their friends, and we're very excited about this. This will bring consistent revenue year-round to our destination. In terms of media, I talked about Perfect 10, the Academy, and Gone Fishing. We will also be launching in a very short period of time a show called Inspired. Great athletes doing great things for their communities. The pilot episode of that will be aired in early June, and this is a an executive produced on our behalf in partnership with Tupelo Honey. This will air on great television channels, picked up over 100 different channels across the nation. So again, media is really starting to come to life and generate some great content for us. And out of that, we believe that sponsorship and direct distribution revenue will grow in the near term. And then lastly, gaming. Our Hall of Fantasy League, I'm excited about Season 2. I think it's going to be bigger and better. You'll have a chance to double down in Season 2. The league will expand by two new teams, and we will continue to have our franchise model, but we will host more events, more fantasy challenges, and really more ways to engage throughout the season and more ways to win. I talked about sports betting, but let me just be clear again. Sports betting application process opens June 15th. We are well positioned to take full advantage of that application process as soon as it begins. We have the right consultants and advisors on board to do that. Our team has done an excellent job in preparing all the information. That application process closes in July, mid-July, August 15th. And we will then look forward to a positive outcome in the near term, hopefully after that, We don't have any more line of sight on when actual betting will begin. We're hopeful before the end of this year, but we know for sure by January of 23. And so we would like to be able to be in a position to take full advantage with partners that we have talked about to be able to create great sports betting experiences, both from a retail presence and from a mobile point of view as well. I think I'll just close by saying a few things. I've talked about creating exceptional experiences across multiple platforms and the synergy that we have the ability to drive through those platforms as a company. And I really believe, unlike any other, the access to intellectual property and content is a luxury that many companies do not have. I think as we execute this strategy, we're already showing revenue growth. We're already showing how we can be successful in terms of the synergy that we're driving. But communication and transparency are critical during difficult times. I've said before, we're used to operating and growing in one of the most difficult environments we could have imagined, and yet we're still operationalizing more assets, we're still bringing to life more media content, and we're providing our guests more opportunities to gamify the fan experience in a very positive way. revenue, assets, all of those things, this team has done things that, frankly, I am incredibly proud of, but also this is a never-quit attitude that this team has, and I'm very proud of them because I think we're demonstrating across many fronts our ability to be successful. And as we emerge from these difficult times, the optimism that we have that we can really take off running as we stand up all of that content and the assets that I've talked about with events and sponsorships, this is gonna be a successful company for years to come. Look for the huddle in the very near term. We'll be taking a stroll around the campus and giving you a very close up view of construction and the progress that's being made asset by asset. Again, transparency and communication. We want our shareholders to know what's going on and we wanna be realistic in our achievements but also excited about the future. So I'll stop there. Thank you all for tuning in, and we'll open it up for questions.
spk06: Thank you. To reopen the queue, we will start with Mr. Jack Vander Aert with Maxim Group. Please proceed.
spk00: My question is, I think, on the sports betting front. So I'm going to move on, and that's exciting to hear that that's on track. In your prepared remarks also, Michael, you mentioned air travel has rebounded across the country, which I certainly agree with. I think you also mentioned a couple of interesting stats on local partnerships and tourism. Maybe can you provide some color to what you're seeing and hearing in terms of demand and general sentiment from potential inbound air travel visitors around Canton, as well as localized interest from visitors that are within driving distance?
spk02: Sure. Thanks for that, Jack. I think the positive news is we have a very close relationship with Ren Camacho, president of the Akron Canton Airport, and our team meets with him on a regular basis and his head of marketing. They have great plans. They've really expanded their capacity. They've done deals with new airlines to create opportunity for direct access up and down the East Coast. And so we're excited about what that could mean for us as a destination. Having said that, I've always talked about in the early days, this is going to be a regional drive destination. And what we're seeing already with the events that we're hosting, with the sports programs that we have in our sports complex, I mean, we're on pace to break records this year. We're expanding, as you know, our sports complex, adding new amenities. This is really going to be a much more world class destination for different tournaments, lacrosse, soccer, rugby, of course football and non-traditional sports as well. The demand has grown even higher and we've seen that every time we're hosting events on our campus, the revenue that's being generated to the surrounding area hotels and the food and beverage locations goes off the charts. The takeaway here is I think people have been pent up for a few years and they're starved for opportunities to come and experience fun, entertaining environments. I can tell you what's been amazing to me since we announced the two new attractions in addition to the museum, the water park, Topgolf, and others, virtual reality experiences, the Ferris wheel, which we're referring to as the red zone, the red zone because The red zone in football is from the 20-yard line in, and we have 20 gondolas on this Ferris wheel, and we are focused on creating a really unique experience there. And then, of course, our zip line experience, which we're calling the Forward Pass. Not sure if everybody knows, but the Forward Pass was perfected on the shores of Lake Erie and Sandusty, Ohio, in 1913 by my alma mater, Newt Rockne, and the University of Notre Dame. And so that wasn't why we named it that. But we wanted to give fans the thrill of being catapulted through the air just like a football, right, and have that theming attached to it. But as we announced those two new attractions, the inbound communication has been astronomical. You know, so much excitement about having in this county, in this region, our own destination that has these types of themed rides, themed attractions, unique food and beverage. So a long-winded answer, Jack, to say that the encouraging part of this is as a regional drive destination, it doesn't require a lot of dollars to fly. We are going to have experiences that are affordable for everybody. And we're going to have unique experiences that people won't have the opportunity in their daily lives to experience without traveling to Florida or or the West Coast to see Disney or Universal. So I think the indications are positive. We know we're not going to stay in an inflationary type environment forever. We know we're not going to have the supply chain difficulties forever. We know that we've been successful during those difficult times, and we're encouraged that as we position ourselves through investment and through a creative lens of what this experience could be, that we're going to have demand here, and we're seeing it already this year.
spk00: Okay, great. That's helpful. And then maybe just to follow up on the guidance, maybe for either you, Michael, or for Ben as well. So the 2022 revenue guide, mid-30 million, that's reiterated, which is nice to hear. That suggests a pretty nice pickup for the remainder of the year. I assume this includes more growth in hotels, sponsorships, and then a number of new planned events. And, Michael, you just alluded to these two new attractions, like the Red Zone and the Ford Pass zip line. So is the revenue growth for the remainder of the year kind of embedded there? Is it broad-based, like from all of some of the parks here, or are there any specific drivers you want to emphasize for 2022?
spk02: Yeah, I think, look, opening new assets is the key, right? And as we open the Center for Performance and you host two or three major events for enshrinement, you're talking about hundreds of thousands of dollars just in one or two days. As you open those indoor assets like the Center for Performance, now you're talking about year-round sporting events or non-sporting events. The more of those kinds of things, concerts, sporting events like USFL and Women's Football Alliance Championships and Black College Football Hall of Fame Kickoff Classic, we derive revenue out of concessions, out of a portion of the ticket sales, certainly out of rental for our stadium, and then launching two new attractions, an outdoor bar area that are direct revenue for us on a regular, consistent basis, in addition to adding a new attraction inside the stadium, this skills test challenge that we'll run on a daily basis, allowing fans to immerse themselves in like an NFL combine environment We feel like between those types of things, the rents that we'll see from tenants, both for the Center for Excellence and Fan Engagement Zone, the commissions that we'll receive from some of our partners doing business on property, sponsorships, all of that will continue to grow exponentially over the course of this year with asset growth, event growth, and our goal of having media And gaming, you know, sports betting, if sports betting comes on, we have the opportunity to stand that up this year, represents substantial dollars to us as well.
spk01: Okay, great. Well, I appreciate the update. I'll hop back in the queue. Thanks.
spk02: Thanks, Jack.
spk06: Thank you. At this time, I'd like to turn the floor back over to Anne Grafis to answer some additional questions that have been received during the earnings call.
spk05: So you've shared that you have hired a new head of gaming. Can you expand a little bit further upon how the gaming vertical is progressing underneath that leadership?
spk02: Well, I think any time you bring in somebody who has Rob's experience, certainly you hope that they're going to create exponential value, and he's doing that. Dedicated focus on how the gaming environment can intersect with the media environment. Dedicated focus on how we can bring gaming events to life, maybe draft for our Fantasy League here on campus at the Village, e-gaming events and tournaments here driving more attendance. I think the point is Rob has taken hold of this and really added layers of depth and strategy to what we were already doing. Now, he's also working in partnership with Tara Carnes, who heads up our business development and is our general counsel on the sports betting side. And so dedicated focus to ensure that the licenses that we need for our retail outlet and our mobile betting is critical focus as well. So I think it's just a And Rob is slowly starting to build out a small team that can help support him and certainly leveraging outside consultants that have expertise in these three different areas. But Rob brings a drive and a passion, waking up every single day, thinking about how to integrate and how to partner with the other business vertical leaders and bring more value to us as a company out of our gaming division. And I've been very pleased with the work that he's been doing so far. He's only a couple months in. Right, right.
spk05: Any further details you can share about the relationship with the Pro Football Hall of Fame and the reassignment of the license agreement?
spk02: Yeah, look, let's just take a step back for a moment. There was a leadership change at the Pro Football Hall of Fame. I think very highly of Jim Porter, not only as a colleague and as a friend. He's brought an attitude of we're in this together, as we've always had. We have reconstituted a license agreement that I thought was somewhat imbalanced and we've lowered the cost of that. We've gained more exclusive access to brand and content, which we knew we needed and have leverage for NFT development and other things, event development. But an example, you know, turning over a concert that they don't, run on a regular basis to us as a company where we run multiple concerts and can run them efficiently and hopefully more profitably was a sign of true partnership. And our commitment back to them is out of those types of concerts, out of the types of sporting events, drive more attendance back into the Hall of Fame, making that an even more compelling experience. The alignment has never been stronger. Bringing us in on a deal that they were thinking about with a company called iGOT to develop these digital collectibles. And we've now taken that deal over with our NFT business. By the way, I neglected to mention that we are actually now recruiting an NFT digital development person so that we can be more efficient in creating our own NFTs to get to market in a much expedited fashion. I think the license agreement is just an example. The events that the Hall of Fame are going to host in our facilities, they're putting all of their business travelers and Hall of Famers now in our hotel. This is a relationship, a very symbiotic relationship that I think has gotten stronger and will continue to get that way over the years to come.
spk05: It was brought to my attention while we were on the call that you cut out for just a short period of time, and I think during that period of time you were just touching on NFT, so maybe you could just
spk02: restate the update on NFTs for sure so you know I've said before digital collectibles while you're going to read stories that they have plateaued but now they're coming back I think any time that there is a new business there is a settling out that happens everybody gets excited everybody jumps in but one thing that I know and certainly from my experience when you have content That is what drives the opportunity to be successful. And we have access to content through our relationship with the Pro Football Hall of Fame and content that we're creating organically, things like our Hall of Fantasy. So we have committed to a partnership with the Pro Football Hall of Fame and a company called I Got It to develop 600 very unique assets, collectible pieces of memorabilia out of the museum, things that people have not seen before. We will be distributing those assets today through our existing channel at FTX. And in fact, we should be launching either today or tomorrow, certainly this week, two new NFTs that we've been working on for a period of time as well. So you can see what we're trying to do is put internal resources in place that can help be creative and create new NFTs. relationships in place that allow us access to the key material and memorabilia that we want, and then distribution expertise with IGOTA. And they have great creative expertise as well.
spk05: So you've talked about construction and assets being done before enshrinement. Can you provide more detail surrounding construction and how supply chain constraints have affected and what gives you the confidence that you'll be ready to roll, how we'll be ready to go by enshrinement?
spk02: Well, what gives me the confidence is the team. Carol Smith and her team have done an absolutely fantastic job in managing and supporting the contractors we have on board. And I meet with her almost on a daily basis to review progress. This is a difficult environment. Supply chain is very real. Every company is experiencing it. We're no different. But let me share with you a story that I think really defines who we are as a company being nimble and creative, and also a company that has experience doing this. I've built these things around the world. Carol has certainly had great experience in building assets for Industrial Realty Group. We recognize that the Center for Performance was trending on the high side, and I mean on the very high side of our budget. Why? Steel costs had gone through the roof. Lumber costs had gone through the roof. the supply chain and the timing of assets or materials coming in was going to cost us delays. We quickly last year pivoted. We had an emergency session. We pivoted. We redesigned that entire facility from a brick and mortar facility, which would have been fine, to a much more compelling architectural statement, a dome. I mean, a dome at a sports-themed destination is what you would expect to see. We took the cost of that facility down from I'll call it $55 million down to $20 million. By the way, that $55 million was a part of the $300-plus million construction budget that we were talking about. What that did for us, though, was that savings immediately went into mitigating the exposure we're having in the water park and in the hotel. So unbelievably, we have been able to stay on budget at a time where no one, and I mean no one, could say that they have been able to maintain their original budgets because of costs, supply chain disruptions, and everything else that's going on. You heard me as I was going through the overview. CFP, on top. The Center for Performance. Play Action Plaza, on top. The Fan Engagement Zone, on top. Expansion and enhancement of our sports complex, on top. That doesn't just happen. That's talent, that's creativity, that's working hand in hand on a daily basis with our contractors to overcome the adversity that we have been faced with. And I give a lot of credit to the team because they have done it and we continue to push forward in a way that we've communicated. And all these numbers that Ben are talking about and we're talking about towards the end of the year, that doesn't happen unless we finish these assets.
spk05: Well, I think that is the end of the Q&A. And so with that, I would like to thank all of our shareholders, all of our partners for your continued steadfast commitment to the company and your interest in all that we're doing. And I wish you all a wonderful day ahead. Thank you again.
spk06: Thank you all. Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. And thank you for your participation and have a great day.
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