The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian taxpayers paid $1.2m to a global sporting and entertainment giant and got nothing in return, the auditor general revealed yesterday.

The government’s financial watchdog, in a six-and-a-half year audit of the National Sports Authority (NSA) that was tabled in Parliament, said an entity it named as “Company A” received $1.192m “for services that were never performed”.

While the Auditor General’s Office named none of the companies or employees referenced in its findings, Tribune Business’ research has established irrefutable proof that “Company A” is none other than US-based corporate giant, Anschutz Entertainment Group (AEG).

This newspaper’s archives record the signing of AEG’s management and consultancy deal with the NSA as occurring on Friday, May 22, 2015. The Auditor General’s report states that NSA’s agreement with “Company A” was agreed on May 22, 2015, making the dates an exact match.

The report said none of the “ten deliverables” that AEG was supposed to accomplish on the NSA’s behalf was ever completed, even though the sporting and entertainment giant received $468,000 in payments direct from the Ministry of Finance.

AEG has ownership interests in multiple professional sports teams, including the Los Angeles Galaxy soccer team that once featured David Beckham, the Los Angeles Lakers basketball team and Los Angeles Kings in ice hockey.

It is also involved with European-based soccer and ice hockey teams, and owns sports, entertainment and convention facilities across the world. These include the Staples Center in Los Angeles, home of the Lakers, and PlayStation Theater in New York, while AEG also promotes multiple music festivals such as Coachella.

It likely seemed the ideal partner for the NSA to the Christie administration, which agreed a three-year deal that paid AEG a “fixed fee” of $40,000 per month regardless of the end results.

However, the Auditor General’s findings likely represent a major embarrassment for the former government, and especially Mr Christie, who so heavily touted the AEG deal when it was signed.

The Tribune’s coverage at the time records the then-prime minister “teasing” that the Los Angeles Lakers could be lured to play the Miami Heat in The Bahamas. And Chuck Steedman, AEG’s chief operating officer, said then: “All great things are well worth waiting for.

“We hope to combine our global brand and reach with this country’s already world-class facilities, the already world-class destination that is The Bahamas and the opportunity to create and expand upon the great content that is already taking place here.”

None of this ever materialised, according to the Auditor General’s report, which suggested that the deal ultimately became another financial black hole draining an already-strained Bahamian taxpayer and Public Treasury.

The Auditor General’s report does not find that AEG or its employees did anything wrong, yet it indicates that the group may have been paid more than its fixed $40,000 per month by the time the newly-elected Minnis administration decided to terminate the deal on its two-year anniversary.

While the contract sum suggests that AEG should have received $960,000 by that date, the Auditor General found that it had received almost $232,000 more based on the report’s findings.

“We noted that Company A (AEG) had entered into a consultancy agreement with the NSA on May 22, 2015, for a three-year period ending August 22, 2018, at a fixed fee of $40,000 per month and payable in quarterly installments,” the Auditor General’s Office found

“The Ministry of Finance made direct payments to the company totalling $467,908. We further noted that the contract, both in terms of specifications and conditions, had shortcomings as all of the deliverables were never completed.

“We noted that the NSA Board made recommendation to cancel the company’s service contract in a letter dated May 22, 2017. However, the company at this point had already received a total of $1.192 for services that were never performed.”

The Christie administration provided no details on the AEG deal when it was signed, and no media questions were permitted at the press conference featuring Mr Christie and top AEG executives.

However, the Auditor General’s report reveals that the AEG agreement effectively involved the sporting and entertainment giant overseeing and plotting every aspect of the NSA’s operations - akin to a management/operating agreement.

It was supposed to develop “a business plan” detailing potential growth areas for the NSA, which manages and operates the Thomas A. Robinson Stadium, Queen Elizabeth Sports Centre and Baillou Hills Sporting Complex.

AEG was also tasked with conducting a financial and operational review of the NSA, identifying areas for improvement; “provide guidance” to management so that productivity and profitability were maximised; train NSA staff in all aspects of stadium operation and events management; develop an NSA website; create an annual maintenance and capital improvement plan and budget; help attract events; and advise on “the development of sports and entertainment content”.

None of these objectives was achieved, the Auditor General’s report found, adding that it was difficult to assess how well the NSA had managed the contract because “an appropriate file was not maintained”. The only documents contained were the contract and AEG’s invoices, with no details available on how it came to be selected.

The AEG findings resulted in the Auditor General recommending that the NSA “establish a contract committee” to oversee all future procurement, with different works values attracting different levels of scrutiny and approval.

“The procurement process lacked levels of delegation of authority and, as a result, the activities under the contract may not have been properly monitored to ensure that deliverables were fulfilled before payments were given,” the Auditor General’s report said.