Among other things (which I'll get into in another post), Ferguson said that except for the last $400,000 forwarded to Power Promotions, all the $5.6 million in loans was secured by ticket sales---that is, Power Promotions had been advanced money that had already been collected from ticket sales by Ticket Atlantic, TCL's ticket agency.
There seems to be an attitude that the $5.6 million is no big deal---the city got it back, after all. But, really, this gets at the heart of the scandal, for two reasons:
1. Ticketing agencies shouldn't front money from ticket sales because the concert might be cancelled, and if so, the agency would have to refund ticket purchases to buyers. This, in fact, is exactly what happened with the Kid Rock show, which was supposed to be held as part of the "Halifax Rocks 2010" series on the Common July 23, 201, but was cancelled; Ticket Atlantic offered to let people who had bought Kid Rock tickets use them for the July 24 Black Eyed Peas show, but if purchasers chose not to take the offer, they could get refunds at the box office.
This, in short, is where the risk factor came in. By advancing loans from ticket sales, TCL was opening the city to tremendous financial risk, and this is precisely what city finance director Cathie O'Toole wrote in her scathing report on the loan program: "The establishment of this business practice...exposed the municipality to financial risk." Note that O'Toole didn't say it was just the last $400,000 in loans that was risky; rather, it was the entire program that was risky.
2. Beyond that, Ferguson's explanation can't be true. There were two shows as part of Halifax Rocks 2010---Black Eyed Peas tickets went on sale April 16, 2010, and the Kid Rock show wasn't even announced until June 1, 2010, so obviously ticket sales started after that date.
But included in the paperwork made available by O'Toole (Attachment 3), Power Promotions was advanced $500,000 for the Halifax Rocks show on March 29, 2010. This is not part of the last $400,000 that Ferguson admits was unsecured---this is an early payment that was repaid.
The paper trail shows definitively that TCL advanced Power Promotions a half million dollars for the Halifax Rocks shows even though not a single penny in ticket sales had been collected.
For The Coast's complete coverage of the Common concert financing scandal, click here.