Hall of Fame Resort & Entertainment Company

Good morning and welcome to the Hall of Fame Resort and Entertainment Company's third quarter 2023 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 now turn the conference over to Anne Grafis, Executive Vice President, Global Marketing and Public Affairs.

Good morning and thank you for joining us for our third quarter 2023 earnings conference call. Our latest press release and supplemental slides were posted yesterday evening after market hours. These documents can be found in the Investor Relations section of our website, which is hofreco.com. After this brief introduction, Michael Crawford, our President and Chief Executive Officer, will give an update on the company's strategy and outlook. Benjamin Lee, Chief Financial Officer, will then provide analysis of the quarter's financial results. 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 each of you to read the full disclosure concerning forward-looking statements in the earnings press release. Additionally, please note the company uses non-GAAP results to evaluate performance internally as detailed in the press release. I will now turn the call over to Michael Crawford. Michael?

Thanks, Anne. Good morning, everyone. It's a really nice fall day here in Canton, Ohio, so great to have the opportunity to update all of you on what's been going on with the company over the last quarter and as we think about going forward. I think we all know November 11th was Veterans Day, so we had a very nice day on campus at the Village celebrating and thanking our veterans for their service, both current and past. There's been a lot of things happening over the last quarter and progress at the village. Some of the key highlights. I'll start with attendance. And it's been very interesting for us on the attendance front. We've implemented a new tool, sort of a geo-tracking AI tool that allows us to understand guest arrival and departure patterns and also flow of guest traffic while they're on property as well. And I'll talk a little bit more about that in a moment. But what we've realized is that Attendance is growing and we're actually exceeding our attendance forecast Which is great for us because it offers us an opportunity to monetize against growing attendance in the future We hosted multiple large events. You'll recall that the USFL championship game was played here I know many folks are still very curious about the USFL and XFL merger I can tell you that I'm hopeful that we will play a role in that league in some way shape or form but as of now we don't have any relevant updates and I expect to have an update in the very near term, and of course, as we do, we'll pass that along to you as our shareholders. We also hosted a variety of different types of events, showcasing the diversity of events that we're striving to achieve here, from our Kids Bop event, of course, enshrinement, the NFL preseason game, the Concert for Legends. Zach Brown did a fantastic job. We also recently hosted... comedian Bill Burr. So a lot of different types of events, and the event slate is growing. And we're continuing to look at not only sport-related but non-sport-related events to build the slate of events for 2024. Our plan is to, prior to the end of this year, announce a more robust calendar for 2024 as well, allowing our guests the opportunity to plan for the events that they would so choose to visit and the experiences that they would have. I talked about visitor growth. We are experiencing strong growth in visitation. Our focus is now as people are coming to give them opportunities to understand what the village is about prior to arrival so that they can plan accordingly. And then also market to them while they're onsite and create movement and opportunities for guests to experience not only the thing that they came for, but the multiple other types of experiences that they can have while they're here, be it ride experiences, food and beverage, interactive sporting experiences or event experiences. And then, of course, we continue to add to the types of things asset-wise that our guests can choose to experience while they're here as well. We added new themed locations in ice cream and cookies in our Smoosh location and Pizza Oven recently opened. We've also added multiple new office tenants in our Constellation Center for Excellence. You know, those things represent lease revenue for us and revenue in terms of building out the facility, but they also represent uplift as those tenants come to life, as those office tenants are present Monday through Friday for different meals on property, potentially hotel stays and visits to the different events that we're hosting. We're expecting to open later this month our Donald Driver Driven Elite Experience. Remember, there are two different business opportunities that we've signed with Donald. One, a retail facility, fitness facility here in the Constellation Center for Excellence, and then also this higher-end training opportunity, this Driven Elite concept in our Center for Performance. And both of those we expect to be opening this month. in the next month. Heggie's Nut Shop also expected to open in the very near term, probably within the next three to four weeks. And so you can see the differences and experiences that we're creating for our guests and the opportunities for them to stay and extend and play. There were five relevant key priorities for Q3. And I would say not only Q3, but this is the focus for our team. Our team did a great job, I think, in executing as you will have seen in our Q3 numbers. We did grow revenue and we also balanced that revenue growth with expense growth. And so our goal always has been to spend the dollars where they're going to have the greatest impact for us. And we continue to manage the cost base in terms of what we're spending and how we're spending and also our staffing models to be most efficient. We also expect to close the remaining financing required for the completion of our phase two assets in the very near term. But the point I'd like to make here is related to the cost base. And as you may very well understand, that every time we close new financing, there's costs associated with that. There are legal costs, there are financing costs, placement costs. And so, those types of expenses I expect to not only be reduced in the coming months and years, but to actually go away because we won't have the need to consistently finance new assets. And so, that will also contribute to our bottom line, not having to have those types of expenditures. We've had approximately one full year of operation through Q3 as a company. And as I talked about, this new attendance intelligence is showing us that our model is really working, creating events, creating new opportunities for our guests to come and experience assets. And we're excited about what's to come. Obviously, our water park is in full swing and in development. and our on-site hotel is about ready to break ground. The reason that hasn't broken ground, we've needed that space. It's a very tight corner in the village there, the northern end. We've needed that space as a lay-down area for all of the construction equipment and all the materials for the water park. And now that that is coming to an end in terms of the outside core and shell being completed, the actual work will start on the inside of that facility and hopefully continue to allow us to build a hotel on the site just adjacent to it. We're getting smarter at how guests are arriving and the timing of those arrivals by event and for a typical Friday night or a Monday afternoon. That's allowing us to really evolve our staffing models and our expense base as well. And so, as I've always said, it takes time to stabilize a operation. I think we're actually getting there sooner than what opportunities really have afforded us to over the last year. But I think the influence that we're having now over the guests and as they arrive and expanding their thoughts around what the village can represent are all very important aspects of driving growth for the company. We are looking at increasing efficiencies in every aspect. We've brought on not only in terms of expense management, but in terms of revenue growth. We've brought on someone who has a lot of experience in revenue management, so things like packaging, pricing, all of those types of things. I think we're getting more efficient at that and we're seeing that in the context of revenue as well, day to day and in the event category as well. Many of our assets have been completed and we're continuing to evolve our tenant mix. There are a lot of tenants that we're in discussion with for the remaining boxes. The good news here is there's not a lot of remaining boxes. But we want to have a more curated experience. And so we're really focused on putting the right tenants to complement the ones that we have in place. And we think that we'll have a good set of tenants over the next couple of months to talk about as well. Synergy has been a big focus for ours continuing to influence as people arrive what they do. People are coming for an individual experience but we're now seeing them come earlier stay later. They're having ride experiences at PlayAction Plaza, they're dining, they're shopping. And so that's a very good thing for us because we want to create the synergy between the assets and between the experiences for guests to expand and have unique offerings for them to enjoy while they're here. The Doubletree is a great example of that. As we've continued to grow onsite events, onsite business travelers, Etc the Doubletree has continued to stabilize and probably even more quickly than what I had hoped for Coming from the hotel business that does take typically take three to four years as well I think we've gotten there in a couple years and it's now a profitable asset It also ranks in the top from a financial performance standpoint at the very top in this region and more importantly it ranks nationally from a customer service point of view and so I've always said everything we do is It's important to create assets that are going to drive great experiences and memorable experiences for our guests to enjoy. I want to congratulate the team there. They've recently won the Brighter Together Care Award by Hilton, which is the award that recognizes the outstanding service and guest experiences by category of brand that they have in their family. We won that for the Doubletree category. It's an absolutely fantastic achievement, and we've continued to be in the top service categories for them since we've been open. The second thing that we talk about a lot and I've talked about even on the last earnings call is restructuring our balance sheet. You know, we've had to make over the last three years decisions in terms of equity offerings, in terms of the type of debt that we've brought on to finance each asset individually in a very difficult environment, starting with the global health pandemic, but moving through an inflationary environment, wars, a lot of things have influenced how the lending environment has continued to evolve and frankly tighten up. And so we want to make sure that our balance sheet is structured in a way that it allows us for the right runway to stabilize the business but also sets up long-term success. A good example of that focus in Q3 was the restructuring of the Doubletree capital stack. We looked at the senior construction loan there. It was maturing. We talked to the lender in Erie Bank. We reduced that senior loan amount, reducing the interest rate, and we also extended that maturity to be more favorable for us. We offset that reduced loan, though, by adding other really favorable financial instruments, the property, the PACE lending that we do, the Tourism Development District bonding that we do. We added small chunks of that to the hotel cap stack allowing us to have a much more balanced sheet there and also allowing us to increase the opportunity for us to drop more to the bottom line. The refinance and the structuring of assets is really important for us, and it is something that the team will continue to focus on, not only were they doing it in Q3, but over the next couple of years. As I talked about We have brought on a consultant that will also help us in that effort taking a look at the types of debt that we have and then also thinking through how to extend those or sort of remodel those to give us that better balance sheet profile. Ben will talk a little bit more in his remarks about the process that we're working on with the water park and the hotel and the public debt financing and how that's working to date. I will say that that has taken a little longer than what we hoped, but it is the right type of debt for us. And so the process, while it has to go through the legislative process for approvals and it takes a little longer, it is well worth the wait that we get the right type of debt profile on those remaining two assets. We did do a small equity raise. We took down a portion of our existing shelf registration. are previously talked about at the market offering. And we did that for a few reasons. One, it allowed us to go back to institutions and increase their ownership in the company. Two, it provided a little more liquidity in the stock. The volume in the stock was trading at a very low volume after our reverse stock split. You'll recall we needed to do that reverse stock split at the time to meet NASDAQ trading requirements. And while I know that that was difficult for some people to understand, it was absolutely necessary for our company to have the opportunity to remain on the NASDAQ and for all of our shareholders to have access to that indice for trading purposes. And so the offering helped us increase the volume in the stock as well and provided a small chunk of additional equity for the company. We are aware that we do have a complicated capital structure. I've just talked about that. And strengthening our balance sheet and improving our financial stability is mission one, not only for the company, but to increase the types and profile of investors that we bring into our company both today and going forward. This is a company that is growing. I think we're demonstrating that quarter over quarter, year over year, but it takes time for real estate, for media, for gaming, to all have the runway for growth until it can be stabilized. And so our stock is not in need of traders. We don't need day traders coming and trying to trade in and out of the stock. We need investors. We need people who understand the business model, who buy into the business model and understand that over time there's going to be a lot of value here. I think we're trading today below asset value. And there are a lot of reasons for that. Obviously, the markets are in stress as well. But this is something that I feel very strongly about in terms of attracting the right types of investors into our company. Thirdly, we're identifying the right deal and business partners. The media vertical is a good example of that. While it's still in early stages in terms of our pipeline development, we've brought in partners like Brinks Television and we've actually produced and distributed multiple episodes of The Goat Code. This is a really cool show that talks to the aspects of being a Hall of Famer, the sort of secret sauce, if you will, as to how these greatest athletes to ever play professional football got to where they are at. It also highlights our access to unique intellectual property to create media content like that. And so, you know, a partner like Brinks, a partner like Reach Television, A partner like Amazon Prime distributing a show that we have right now, a docuseries out called NFL Alumni Academy Next Man Up. I'm very proud of the fact that that really showcased the Hall of Fame village. It also shows, if you watch it, and it's a great show talking about these kids who didn't make an NFL team and the sacrifices that they're making and training and developing and continuing to stay sharp so that if they get their chance to be called up, they're ready for it. But it shows how far the village development has actually come. This was season two of that show, and there was a lot of dirt around in Canton, and now it's a lot of buildings and experiences. It also shows the synergy, right? Because the show was being filmed here on campus in Tom Benson Hall-themed stadium. The athletes were staying in our hotel. There were a lot of meeting rooms being rented, a lot of catering. And so there was a lot of uplift created by that show, not only from a revenue point of view, but from a brand marketing point of view that you simply can't buy on a prime streaming channel like we have today. Sports betting better continues to be in line with our expectations. I think they're doing it, no pun intended, better than most in that category of online sports betting. The micro-betting has been their focus, or that prop betting, but they've now evolved their model to that more mainstream type of betting as well, and they're seeing growth quarter over quarter, and we're really proud to have them as partners. And we're also benefiting from the fact that we took an ownership stake in the company, and so as they expand, and achieve residency in multiple different states by gaining access to the licenses to allow for their platforms to exist in those states, so do we by our ownership stake. On-site, we're looking for those retail partners. We're opening new experiences. We're having discussions, as I said earlier, with many meaningful partners that will allow us to curate a great experience, a differentiated experience here in the Village versus in other places that you may visit. One key learning is onsite sports betting. You know, it's the reality of mobile betting versus retail betting. And what we're seeing in the state of Ohio, which is consistent with what's being seen across the country, mobile betting is just dominating the actual space. 90% of bets are coming through mobile betting. So 80 plus percent of revenue is also coming through mobile betting. That's not to say that a retail presence wouldn't benefit us. We're in discussion with several partners that I think would be really great for us to have here on campus and partners for the company. But the fact is, this is more about an experience than it is about significant revenue growth for us. We expect the revenue growth to come through mobile, and we're going to continue the focus there as most of you continue your focus on using that platform as betting. I think retail-wise, we are different. It is interesting. We are seeing some retail sports betting operators leave the partnerships that they have in Ohio. It is a fragmented group between sports franchises, casinos, racinos, and some of those don't have year-round attendance. Some of those don't have attendance all day and into the evening. They have them for special events. I think that's where we are very different in our business model. There is always something going on at our destination. There are always visitors here 365 days. And so that's our focus, looking at a great partnership that we can implement here at The Village, that we can add value to what they do, and they can add value to our guest experience. Sponsorship deals. We did eight new deals in Q3, totaling over a million dollars of new value to the company. That's very impressive, again, in a difficult environment where marketing dollars from companies are tight in terms of their spending. You see all across the country and the world, frankly, companies cutting back on labor, cutting back on spending because of the inflationary environment that we're living in. But we've recently announced, you know, in Q3 and at the early stage of Q4, some significant partners, Diageo, Coke, Jim Beam, Ohio Lottery. A lot of these partners not only enhance our capabilities in terms of the guest offering, But again, drive significant revenue for us long term to the bottom line. I know one thing that is on everyone's mind. I get a lot of questions about this is where are we at in the Johnson Controls arbitration process. Here's what I can tell you. We finished the arbitration process in early October. There was a three arbiter panel. We presented our case. Johnson Controls presented theirs. We expect to have a ruling on that by the end of this month. Other than that, I don't really have any updates. I'm hopeful, based on the case that we put on, that we will receive a favorable ruling. I think, as I've said before, we were in the right. We were good partners to Johnson Controls, and I think their termination of the agreement was wrong. But we'll leave that up to the arbitration panel to decide. And as I said, we will have a decision by that panel by the end of the month. The fourth thing is we continue to work and develop on new assets. The water park has been in full swing this year. We've been very lucky with weather. That asset will be completely enclosed by the end of the year. But we've also been able to parallel path some of the water work development on the inside, which is unique. We've worked a lot with our contractors be able to start that work and so we're still targeting a q3 opening of the water park next year I talked about the Hilton tapestry starting very very soon we'd like to believe that we could open that on or around the same time of the water park the reality is it's probably going to trail that by a couple of months but again we needed to slow that development down so we have the appropriate area beside the water park for lay down of materials and construction equipment Then the last thing I would say that we've done is focus on unique guest experiences. We want to put together an itinerary for guests. We don't want guests to come for an event or come for a dinner. We want them to come, stay, and play. And so we talk a lot about unique experiences, but we also need to think about how do we communicate those and how do we make those easier for our guests to access. And so we hired a new position, as I said, in charge of revenue growth, optimizing pricing, optimizing packaging opportunities, and really helping us think about growth and synergy between all of the assets that we have to sell and for our guests to experience. The other thing that this position is helping us do is build our concession business and our merchandise business. We have a small merchandise business that I'm hopeful can grow over time, meaning selling shirts and hats and hoodies and different things like that that we've I think got a really unique concept and brand and we want to be able to monetize that. And so we're hopeful that as we create more unique experiences more guests come. As I said we're seeing the attendance growth and that attendance growth is leading to revenue growth and we're managing our costs accordingly. And I'll turn it over to Ben and have him take you through our financial review.

Thanks, Mike, and good morning, everyone. Moving on to financial results. Third quarter total revenue was $8.7 million, which represents an increase of 8% from the same period in the prior year. Third quarter revenue growth was primarily driven by increased event and rental revenue at the Hall of Fame Village and higher operating revenue at our Doubletree Hotel. Third quarter adjusted EBITDA was minus $5.5 million compared to minus $7.8 million in the same period last year. The change from the same period in the prior year was primarily driven by decreased operating expenses related to lower event costs and reduced sponsorship expenses. We continue to gain efficiencies and improve profitability as we work to reach stabilization. The company posted a net loss of $16.4 million in the quarter. Interest expense increased to $6.0 million, resulting from higher debt balances and lower capitalized interest as assets are placed into service. This was partially offset by $1.3 million in other income, representing a combination of the change in fair value of our warrant liability and interest rate swap and a gain recognized on the sale of certain property. Moving to the balance sheet, we finished the quarter with a cash and liquid investment balance of approximately $12 million compared to $29 million at the end of the prior quarter. The company's usage of cash was attributed to operating activities already highlighted and construction expenditures which totaled approximately $17 million during the quarter. Our net debt balance increased to $202 million compared to $195 million at the end of the prior quarter. The increase in notes payable during the quarter was primarily due to accruals of paid in-kind interest and new drawdowns under the FAN engagement zone senior loan reassigned to CH Capital Lending. Recent macro trends and credit conditions have resulted in significant tightening in the lending markets and higher borrowing costs. However, the support from our largest shareholder, Industrial Realty Group, and our ability to source capital with the support of local, municipal, and state funding programs has provided us the opportunity to raise funding and investment as operating needs arise. We remain intensely focused on taking on the right kind of financing while optimizing the capital stack for each asset. This focus was demonstrated in October as the company completed several transactions that Mike discussed during his remarks with the completion of the Devil Tree refinancing and the recent equity offering. We continue to work towards closing all of the necessary financing required for Phase 2 construction, including multiple financing transactions related to the water park and onsite hotel. To reiterate, we are in a very challenging and restrictive credit environment. We are working diligently to close the remaining construction financing needed to fund these critical assets. More broadly, and as noted in prior quarters, we are working to restructure and optimize our overall capital structure in a way that provides the company the best opportunity to move efficiently towards continued stabilization of all facets of our state of business model. The company has recently engaged a financial advisory firm to assist in these efforts and to help assess short-term liquidity needs. Moving to guidance, we are reiterating our 2023 forecast of revenue growth in excess of 50% when compared to 2022 and adjusted EBITDA in the low to mid $20 million range. As we have highlighted, with the company and village in the very early growth stages, we expect revenue growth to accelerate and profitability to improve as we move towards stabilization. Longer term, we continue to target $150 million of annual run rate revenue and approximately $50 million of annual run rate adjusted EBITDA across the key pillars once stabilization is achieved. Those key pillars, again, are destination-based assets, our media platforms, and our gaming vertical. The revenue and EBITDA generation will be diversified across multiple streams, with each one driving synergies to support the ecosystem we're working to build. In closing, the company is mindful of the current economic environment and will remain intensely focused on driving profitability through diversified revenue streams and very disciplined cost management while making strategic investments to support our continued growth. And finally, as you've come to expect, we will continue to provide transparent and timely updates to all of our shareholders as we move ahead. Operator, we would now like to open the line for any questions.

Thank you. We will now be conducting a question and answer session. If you'd 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'd 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 key.

One moment, please, while we poll for questions. Thank you. Our first question is from Jack Vander Art with Maxim Group. Please proceed with your question.

Okay, great. I appreciate the update on the capital structure in the Johnson Controls update, and it's good to see the record quarterly revenue. So maybe I'll start with a question for either maybe Michael or Benjamin, just because I don't have the financial statements in front of me. I'll start with a question on the third quarter revenue drivers, which is obviously a record quarter. Sounds good to see. But maybe just more specific on the drivers and a breakout between events and hotel revenues, just given it wasn't such a nice jump from the second quarter. But I think you had the same kind of the same existing activities and infrastructure in place. So what were the more specific drivers of the revenue? Thanks. Thanks.

Yeah, sure, Jack. Yeah, good question. I mean, we've continued to see success with a hotel that, you know, we had a meaningful increase, about 10% or so in hotel revenues. Well, that's quarter over quarter from the prior year, about the same amount. Third quarter here, we also had a really good bump in event revenue versus prior year. So those are, you know, this talks a little bit to the synergies that Mike talked about. As we have those larger, more profitable events, onsite in the village here. We're also seeing the synergy of driving additional revenue to the hotel. So from a breakout standpoint, those are really, that's really attribution of this quarterly revenue between those two sources.

The only other thing I'd add, Jack, and Ben's covered the major points. I'm very focused though on, you know, we own the Shula's restaurant that is owned by the Hall of Fame Resort and Entertainment Company. Growing that revenue can be meaningful for us. The top golf swing suites is owned by us. We have outdoor rides and concessions. So we're really focusing on the things that we have driving more people into those and making them more efficient. And certainly with event growth you have that opportunity. But I think we're getting smarter at the you know Monday through Friday day to day growth as well. And so I expect that to be a more meaningful contributor as we move forward in the coming months and years.

Okay, great. That's great color. Thanks. And then, you know, Michael, you did touch on in your opening remarks, strong attendance in visitor growth has been better than I guess you guys were forecasting, which is great to hear. Are there any specific or interesting trends you're seeing with regard to your visitors? Are any visitors, are they mostly first timers? Any repeat visitors? Do you get a sense that you're going to have repeat visitors? Just what are you seeing in the data? Thanks.

Yeah, I think as we develop more what I would call day-to-day use assets, restaurants, water park, you know, things that people will want to come back to and do over and over again, we're seeing an increase in repeat visitation. But the fun and interesting thing is we're also seeing an increase in event repeat visitation. What I mean by that is the big types of sporting events, lacrosse tournaments, football tournaments, we're seeing those organizers, because of the growth in our facilities and because of the experience we're offering them, frankly, they're excited about coming back year over year. I would say new visitors are all about events, and as they're coming for events, our opportunity is to convert them from a first-time visitor to a multi-use visitor. Frankly, I spend a lot of time walking around during major events and festivals and things that we're having and listening to guests. And the words that are coming back are, we didn't realize that you had so much here. And it's fun to see the growth that's occurred here in a very short period of time will definitely be coming back. So I would say that the split right now is probably more repeat visitation with first-time visitation on the rise over the course of this past six months. And certainly that's what we expect as we continue to build out more like the water park or more events that are going to be occurring on property as well.

Okay, great. Great color there. And then maybe let me shift gears. I understand your perspective and focus in terms of sports betting is on the mobile front versus the retail, which makes sense just given the marketplace dynamics. But can you maybe provide a some additional color on your mobile sports betting roadmap as you're heading into 2024? And do you expect material? Is there potential for material contribution from it? Just anything additionally to provide on the mobile sports betting front? Thanks.

Well, I think the way in which we've structured our partnership with Better We wanted to be good partners and give them an opportunity in the early years of the partnership to really stand the platform up, gain users and drive growth into the platform. So over time, the deal that we've struck with them does create more value, guaranteed value in the 10 year deal that we have. And so, yes, you'll see increased bottom line contribution from that deal. But I'm also encouraged by how they're evolving the platform itself and how they're continuing to evolve their thinking around marketing. Look, they are an early stage company just like we are. And so they're competing against big brands in the DraftKings, in the Caesars, in the MGMs. But I think what they're doing is finding this following that really does like and appreciate the difference in the platform and And so I'm hopeful that that's going to really help it grow and add a different revenue source for us in terms of a percentage of the overall bet. I mean, recall our deal with them is a fixed contribution sponsorship and that at certain thresholds we get a percentage of the bet as well. I think we'll reach that as they continue to mature and advance their audience and the users of their platform.

Okay, great. Thanks, Michael. And then just one more question for me. I'll hop back in the queue. I believe I heard you guys are reiterating your 2023 guidance, which is good to hear. So I have a good read through on the fourth quarter. It sounds like the water park remains on track to open in the third quarter of next year in 24. So just wondering if at this point in time, maybe it's too soon to talk about it, but given the magnitude of the water park, obviously, but Is there any initial outlook you can talk about for 2024 just relative to 2023? Or is it too early days to talk about that? Thank you. That's it for me.

Yeah, Jack, it's a little early. We're in the final stages right now of capping our annual operating plan for 2024. We'll be presenting that to our board in the next couple of weeks here for approval. It's a little premature to provide anything at this point. I will say we are expecting continued support. revenue growth as you'd expect, continued improvement in EBITDA, and expect that we'll be generating positive operating leverage next year. As you mentioned, you know, the water park expected to come on late next year. That will certainly contribute to both top line as well. So we will be putting guidance out as we get through this operating plan review with the board in the next couple of weeks.

I think, Jack, just the last thing I would add, you know, one of the things that being a early stage operational company, we're learning how to be more effective in reaching the guest and creating opportunities for them to have multiple experiences while they're here. And so, you know, the pre-packaging opportunities, we did take some small pricing increases at our concession and food and beverage locations. given the environment we're living in. But we're trying to balance that with creating value for our guests. And so even as recent as last month, we started to implement packages for food and beverage and tickets. And I think that's going to create more uplift for us and create more value for our guests. This technology that we're using, this AI technology that we're using in the company that is supporting us, also allows us to monitor guest flow. And so we can see exactly where guests are going from the time they arrive, the first experience they have, and how they're sort of creating other experiences throughout the property and their movement by that. It allows us to get smarter at marketing on site as well. So I'm hopeful that we'll get more efficient. Look, we're going to add more experiences to our retail fan engagement zone. will continue to drive greater profitability from expense management. And then, of course, adding the water park is going to be a significant revenue contributor, as will the second hotel. You already see the off-site hotel and what that's doing in a few short years. I can tell you from my experience with Disney, the on-site hotels command a higher premium and they command a much higher occupancy rate as well because you want to stay where you play. And so our expectations are very high for that.

Okay, great.

I really appreciate the time, and thanks for taking my questions. Thanks, Jeff. Thank you.

Our next question is from David Marsh with Singular Research. Please proceed with your question.

Hey, guys. Thanks for taking the questions. Yeah, as the last analyst kind of implied, it's a little bit challenging to ask real pointed questions without the financials. So I guess my first question is, when do you plan to file the queue so that we can get kind of a full look behind the kimono here at what exactly the financials look like?

Hey Dave, this is Ben. Yeah, our plan is to file the queue tonight. Just based on the way calendars lined up for us this quarter, we're just a little off our normal cadence, but yeah, we'll have that filed this evening.

Okay, that sounds good. And then, Michael, I really appreciate your comments with regard to the USFL-XFL merger about being hopeful that you'll play a part, but obviously that introduces a pretty significant amount of uncertainty. You guys were able to do $6 million in revenue in the second quarter, and I think that a big part of that was around the USFL games. I guess... You know, my question is twofold. You know, one, you know, how much revenue in the second quarter is directly associated with the USFL games that were on campus? And then secondly, you know, you guys obviously have to plan for the, you know, for the potential worst case scenario. What would the plan be to backfill those events and that revenue if you For, you know, for whatever reason, you guys aren't, unfortunately, part of the plan for the merged league going forward.

Yeah, that's a good question. So let me just start by saying we are, and I am personally, in constant communication with the leadership of Fox. And you'll recall they're the owner of USFL and were our partners last year. I'm getting very positive indication that they really like what we were able to do for them here and hopeful that they are going to be back. That revenue for us came in multiple different ways. As you can imagine, it created hotel stays, it created catering, certainly tickets, concessions, some merchandise. And so while the Q2 revenue was higher, I would say you know, a sixth of that maybe was attributable to USFL. We have gotten a lot better though at creating other events and selling private events and functions. And my expectation is even if the USFL were not to happen, we're going to be releasing a calendar of planned events that don't just start in June and end in, you know, September, but start in February, March, April, and allow us to take full advantage of our indoor dome, our Center for Performance, and we have more of those events on the calendar than what we've ever had before. Again, one and a half years of operation right now. We're now working closely with multiple different promoters, concert promoters, event bookers, festival bookers, and we're creating our own events. I've often said that You know, it's great to play host to big events, but we have to create our own tentpole events because those are going to drive significant revenue for us as a company as well. Our team has been focused on that, and I think people will see that as we release our calendar more towards the end of the year, you're going to see multiple tentpole events throughout the year. It's important, though, for us to be part of a sports landscape. We're a sports and entertainment company. So we continue to have conversations outside of football, you know, with soccer and lacrosse and other rectangular field sports to really think about how do we drive opportunity for ourselves here? How do we create opportunity for bigger tournaments or leagues or professional teams to practice or play here? And so those are always things that we're focused on. I'll give you one example though. Q4, December, right? It's cold in Ohio in December. We're hosting the seven high school state football championships here in Tom Benson Hall of Fame Stadium. To put that in perspective, those state high school football championships will attract as many guests as our entire Entryment Weekend did. Now, what we do with those guests when we get here, we need to give them a warm place to tailgate. So the Center for Performance, we need to give them an opportunity to have dinners before or after brunches or cocktails, whatever the case may be, we need to enhance the offerings. And that's what our intention is to take better advantage of large populations of guests visiting and to monetize in different ways than what we've had the ability to do in the past. So it's a long winded way of saying I'm very hopeful USFL returns and allows us the opportunity to be on national television, to attract sponsors, to have opportunities for visitors before and after. But in the meantime, we're trying to continue to create more and be more of a place where we host multiple different types of events to drive greater revenue growth in Q2 versus just sustained revenue that we've had over the past couple years.

That's good color. So I have two other questions. First, with regard to You guys recently hosted a comedian. I think that was in the stadium. But with regard to your comments around the dome, if you were to host events such as a headlining comedian or something of that nature, what would your capacity be in that venue? And in terms of events that you may have already had in there, how have you done in terms of driving attendance relative to the capacity?

Yeah. So the Dome is in full swing right now. A lot of the indoor leagues that we've developed and built over the last year on a daily basis, the Dome is actually very activated and it's exciting to see. We've hosted large-scale dinners, up to 1,000 people. We've hosted mega tailgate experiences during Entryment Weekend, a couple thousand, 3,000 people. It depends on what kind of configuration you're talking about. If it's a sit-down dinner, it's around 1,000 in capacity, maybe a little more. Sorry, if it's a sit-down dinner, it's around 3,000 in capacity, maybe a little more. If it's a stand-up comedic act or if it's a concert that we can do, we can put in over 4,000 people in that venue. We want to make sure it's a great guest experience first and foremost, and we also want to make sure that it's safe for folks But we have the opportunity to expand that footprint into several thousand folks. The other thing that I really like about it is we've created it as a space where you can do sort of these big shows, right? You can do home and garden shows, which we've done. You can do car shows. You can do boat shows, which we're hopeful that we're going to be able to do in the near term. And you can expand the capacity outside of the dome, and we have a way to connect those experiences in the parking lot adjacent to the dome and inside as well. And so that's what a lot of convention halls do. Uh, but I think the dome provides us really nice indoor capacity for any number of events and types of events that we want to host.

Yeah, that makes, uh, that makes a lot of sense. Um, it's, uh, it's good to hear because you can probably get a lot of bands that might, uh, you know, might not be able to fit in to fill a big amphitheater or something like that. And that, uh, That could be a nice revenue boost for you. And then just my last question really focused on the retail, the on-site retail center. How many businesses are actually open for business right now, and what's kind of the near-term rollout look like, or are you fully built out at this point there?

Yeah, the facilities are fully built out, right? We have approximately eight businesses that are open. Well, nine if you include the two for business where we have Brew Kettle and Topgolf Swing Suites all in one facility. We'll be opening two more and Donald Driver and Driven Elite Experiences that he has and Heggie's Candy and Nut Shop opens in this coming month as well. So we'll be up to 10-ish experiences, and the goal will be to have the rest of the boxes tenanted out by next year. And we have one really significant footprint down at the north end of the property across the street from the water park that we hope to have a pretty special indoor entertainment experience that we can talk about in the future. But again, we're curating the collection of assets and brands and experiences that we have there. We could have had that all tenanted out already, but we're not interested in just having a barbershop or a mail location or something like that. It's not what we want. We want unique experiences that complement why people come here to play and dine and have entertainment. Our expectation is over the course of this coming year, we'll be fully tenanted and we're going to do some enhancements to that area as well. Outdoor bar area, sort of an area where we can have outdoor concerts. And we did that for the USFL championship. We had Dylan Scott there. I think we learned a lot about that. So adding the infrastructure there to be able to do more of those in a smaller confined space that enhances For our tenants, the opportunity for business is really smart. But it's a good question. And as we, you know, open the water park, we'd like to have the rest of the facilities fully tenanted and open as well.

And do you still have footprint for the retail sportsbook in the facility? I mean, you are still planning to move forward with that at this point? Or is, you know, are you thinking about maybe shifting away from that at this point?

No, we do. In fact, we have a fantastic footprint, as I say, right on Main and Main. The balcony of that footprint looks straight into Tom Benson Hall of Fame Stadium, so it has great view sheds. We have three different companies that we're talking to right now about a sportsbook opportunity. The one thing that I should say is, you know, our sports, our retail sports license had a one-year shelf life to it. And we're working now with the Ohio Casino Control Commission to help extend that opportunity to close on a retail sportsbook operating partner. In the meantime, we've also explored a really high-profile food and beverage operator in that location as well. And so we're trying to create multiple experiences out of that sportsbook footprint. to allow for a unique dining, a unique bedding environment for our guests to enjoy. So our plan is still very much to try and find that right partner and get them in place.

Got it.

Thanks very much, guys. Appreciate the insight.

Thank you. Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for closing remarks.

Thanks very much and thanks everybody for joining the call. Hopefully you understand where we're at. I'd love to just though recap a couple of things. As I've said before, we are continuing to create experiences that are unique and we're committed to excellence. You see that in our Doubletree, you see that in what we're doing in our stadium, on our sports fields, the types of restaurant and other experiences that we're opening. We can't do anything less than that. If guests will pay for and come back to experiences that exemplify excellence. They won't do that for things that are just one off experiences. And so that remains one of our focuses. And I think we're already seeing results of our strategy in terms of our revenue growth, our expense reduction. Yes, we're not profitable yet. But if you're reading the tea leaves, the team, I'm very proud of the fact that they're managing the cost as we're growing revenue. And so after only a year and a half of operation, We're starting to trend in the right direction, and I think as we stabilize, we will definitely be able to monetize and grow bottom line contribution as well. We're adding new sponsors and partners, and those new sponsors and partners are not just about revenue, but they're also about enhancing our capabilities to deliver excellence. Coke, Jim Beam, Diageo, all of these companies represent excellence in what they do, and they've given us an opportunity to enhance the offering and the service that we're providing to our guests. We're creating new experiences that are unique for our guests to enjoy. The five priorities that I talked about, balance expense with revenue growth, restructure our balance sheet, continue to identify significant new deal and business partnerships, to enhance that product offering and increase our operational capabilities, complete the financing and development of our remaining phase two assets, our water park and our hotel, and complete the construction of those things. And then again, continuing to focus on events and really growing sort of the lifeblood of the property, pulsing in new people over and over, exposing them to everything that we do. is really important for us, driving visitation from outside of Canton, Ohio, regional visitation. And the last thing I'll leave you with is we're not only focused on doing this in Canton, Ohio. We're also focused on outside asset growth outside of Canton, Ohio. And so we have brought on a consultant that will help us think through a very small representation, restaurant bar representation that we can activate potentially with the brand of the Pro Football Hall of Fame and think about how do we take a business model that allows for low capital investment on our part and enhanced visibility outside of Canton, Ohio in major NFL cities or major tourism destinations as well. And so we've done a lot of work on that front. We've created a concept. Our board has seen that. And we're really interested to move forward with this as an opportunity to grow our company outside of Canton, along with media growth and gaming growth. So more to come on that, but something that can present some opportunity to expose our guests to our brand outside of the state of Ohio and really incentivize them to want to come to the football mecca in Canton to see the Pro Football Hall of Fame, to see everything that we're doing and experiences that we're having here as well. We're looking forward to a really good Q4. We've got events on the slate. We've got revenue that is being generated in multiple ways. And as we talked about, synergy is a really important part, while at the same time managing our expense base. So I want to thank everybody and thank all of our shareholders, our board, and especially our team. We certainly appreciate, I do, all the hard work. It's a great team. They work tirelessly to try and make this company great for our guests to enjoy. and one for our shareholders to invest in.

So thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.