Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) Q3 2022 Earnings Call Transcript

Michael Crawford: No, and that’s a great question. So here’s how I would think about it. Retail will be ready to go in the context of engaging with guests and showing them the kind of experience that Rush will be able to offer and bringing them into their ecosystems, signing them up, offering opportunities for them. Once the retail sports book was €“ is open, we’ve just completed the core and shell of that building. I anticipate the interior fit out to start in the very near-term. I’m guessing it’s going to be Q2 before it’ll be open, but we’ll keep everyone apprised of that. And I know Rush and Hall of Fame Resort & Entertainment Company are incredibly focused on getting this open and having this experience live for people to enjoy as quickly as possible.

David Marsh: Okay. Thanks. And then just kind of more of a process question around the JCI situation, is there €“ are there any kind of like hard timelines in terms of mediation, completion and arbitration completion so that this thing doesn’t drag out forever?

Michael Crawford: Well, yes, I think there are €“ look, the reason why we went down the mediation path is so that we could have a third-party, and by the way, our mediator, very experienced mediator has done over 4,500 mediations, understands what we’re dealing with. And look, when both sides have a desire to resolve something, it can get resolved. The reason €“ the whole reason for the dispute resolution mechanism that we had in our contract is in €“ if there is a difference of or a difference in perception around how the business has progressed or not progressed, then I think that’s where we’ve been. There was publicly €“ Johnson Controls has said, they didn’t feel as though we met our financial timelines. We absolutely do.

We have all financing in place. Our contract allowed us to have a day for day extension while COVID was going on. And so we’re working very professionally and amicably with them. But it is a very confidential process. What we’ve said publicly is basically what we can share. As I said, though, I do anticipate getting a resolution around this. And I think both sides are going to work towards that. We’ve made a proposal, the mediator and Johnson Controls has that, we’re expecting a response in the very near-term, and then we’ll go from there.

Tara Charnes: Yes. David, I would just add to what Mike said. As I’m sure, you can appreciate sort of the underpinnings of mediation is that it is a confidential process. So while the process plays out, we’re somewhat limited in terms of what we can provide in terms of interim updates. But certainly, as a public company at the appropriate time, when we have more concrete updates to share we will do so in that context.

David Marsh: Great, Thanks. But just to €“ just kind of to wrap that up, you guys are still a little bit held back though in terms of your ability to realize sponsorship revenue until this is resolved. Is that an accurate statement?

Michael Crawford: No. It’s a good question though, because it’s one that helps us clarify for folks. We’re actively pursuing sponsors in all categories. And part of the strategy has always been as the category presents itself, and we can grow our business to really take full advantage of the category in terms of monetization we will. As an example, this year, we added ForeverLawn as a sponsor, a naming sponsor of our sports complex or ForeverLawn Sports Complex. That was a 10-year, $5 million deal, which was a very big deal for us. We have other sponsors that are deep down the path of conversation and opportunity to work with them. I think what Johnson Controls, they represent several categories of business for us. And so we still have the opportunity to look at sponsors that could be in those categories and we are as responsible stewards of business, we always need to do that and build a pipeline of potential partners in every category, even when you have existing partners.