Much has been made about the University of Louisville’s deal concerning the KFC Yum! Center. The beautiful facility sits in Louisville’s downtown, overlooking the Ohio River. It opened in 2010 amid much fanfare and hoopla. And it is a beautiful multipurpose facility, used for athletic events and concerts, the Yum! Center has become a welcome pit stop for all sorts events. Like most publicly funded arenas, however, Yum has not become the financial boom that was promised to the citizens of the city of Louisville and the Commonwealth of Kentucky. Perhaps the biggest piece of the puzzle has been the generous deal that UofL has with the Yum! Center and it’s governing body, the Arena Authority.
As Freedom Hall, Louisville Men’s Basketball’s longtime home, began to show its age, it was clear that a new arena was needed for the university. It’s common knowledge that the brain trust within the UL athletic department wanted an on-campus arena or, at the very least, to not play downtown and be closer to campus. Louisville city leaders intervened and it was decided to put an arena in downtown Louisville, a multi-use facility where the University of Louisville would be the primary tenant. As the primary tenant, UL gets first dibs on scheduling for men’s and women’s basketball and the volleyball team. Also, the university gets a big piece of the financial action for every other event that takes place in the Yum! Center.
How big a piece of the action? While the financial situation with the arena and the Arena Authority remains murky, some estimates are that the University of Louisville makes roughly $26.9 million a year while the city is on the hook for to pay $9.8 million per year. With the city’s responsibility set to rise to over $10 million per year to service the debt next year and get closer to $20 million in 10 years, the Louisville Metro Council has decided to take action and find a workable situation for all parties. At the urging of state government leaders, the Metro Council is going to ask UL to renegotiate the deal with the Yum! Center.
Right now, the University of Louisville has no incentive to renegotiate. The lease agreement is ironclad. The university has met its obligations as it has been contractually mandated to do. Simply because the city of Louisville may not be able to service the debt on the Yum! Center isn’t a big issue to the university. In fact, if the city allowed the Arena Authority to go bankrupt, UL can buy the arena outright. As my dad used to say, just because you can do something doesn’t mean you should. The American public is used to being on the hook for elaborate and expensive sporting venues that rarely bring the economic impact their supporters claim. Professional sports teams are privately owned, for-profit businesses, but shouldn’t a public university at least consider the economic welfare of the city in which it resides?
At this point, all the Louisville Metro Council and KY State legislators can do is hope that the University of Louisville leadership will understand the need for the university to return to the table and renegotiate its lease. All that’s being asked of the university is putting more into the pot to help pay for the arena they call home. No matter how much critics label UL’s Yum! Center lease a “sweetheart” deal, the Kentucky State Auditor ruled that the agreement was “legally executed.” Legally executed is a not the same thing as fair.
In the end, I think UofL officials will sit down with state and local officials and rework the lease so that all parties will benefit and the Yum! Center will not go bankrupt.