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HO

Hall of Fame Resort & Entertainment Co (HOFV)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 2023 delivered record quarterly revenue of $6.1M, up 101% year over year, with adjusted EBITDA loss improving to $(1.9)M; net loss was $(20.2)M, impacted by an $8.8M impairment tied to the anticipated sale of 80% of ForeverLawn Sports Complex .
  • Management issued FY2024 guidance for revenue of $27–$30M and adjusted EBITDA loss in the mid-teens, and projected 2024 attendance of ~3.5M–3.7M; diversification across events, hotel, media, and gaming remains central to the plan .
  • Strategic positives included a binding arbitration outcome with Johnson Controls that produced a $4.1M gain via liability write-offs and opened sponsorship categories; mobile gaming partner Betr’s valuation increased, supporting HOFV’s equity stake .
  • Key watch items: construction of the Gameday Bay Waterpark slowed pending capital stack closure, with opening now projected in early 2025, and restricted credit markets continue to pressure financing costs and timelines .
  • Estimate comparisons were unavailable via S&P Global for Q4; near-term stock catalysts are likely event calendar execution, sponsor additions, financing closures for Phase II assets, and clarity on retail sportsbook partner status .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 revenue and margin progression: revenue $6.1M (+101% YoY) with adjusted EBITDA loss narrowing to $(1.9)M as operational efficiency improved .
  • Sponsorship momentum and category expansion: 24 new sponsors in 2023 including 4 in Q4; key additions included Coca-Cola Consolidated, Ohio Lottery, and Enviroscapes; arbitration outcome removed constraints and opened new categories .
  • Operational synergy and attendance: 3.1M visitors in 2023 vs target, robust event slate (e.g., OHSAA championships, Winter Blitz) driving cross-vertical monetization in hotel, F&B, rides, and merchandise .

What Went Wrong

  • Phase II delays: Waterpark construction slowed awaiting capital closure; opening pushed to early 2025, deferring expected revenue and synergy realization .
  • Financing headwinds: net debt increased to ~$219M; credit tightening led to higher interest expense and extended maturities (e.g., ~$49M IRG affiliate debt extended by one year) .
  • USFL/XFL merger impact: loss of spring pro football events creates an estimated $0.8–$1.0M revenue gap to backfill in 2024, requiring accelerated event programming and packaging .

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Revenue ($USD Millions)$6.1 $8.7 $6.1
Net Loss ($USD Millions)$(13.6) $(16.4) $(20.2)
Net Loss per Share (Basic & Diluted) ($)$(2.39) $(2.89) $(3.19)
Adjusted EBITDA ($USD Millions)$(6.2) $(5.5) $(1.9)
EBIT Margin (%)n/a (computed)n/a (computed)n/a (computed)
Net Income Margin (%)(−222.7%) computed from $(13.6)/$6.1 (−188.5%) computed from $(16.4)/$8.7 (−331.1%) computed from $(20.2)/$6.1
EBITDA Margin (%)(−101.6%) computed from $(6.2)/$6.1 (−63.2%) computed from $(5.5)/$8.7 (−31.0%) computed from $(1.9)/$6.1

Notes: Margins computed using cited revenue and loss/adjusted EBITDA figures above; Q4 revenue is record vs prior-year quarter (up 101% YoY) .

Segment/categorical revenue (FY 2023):

CategoryFY 2023 Revenue ($USD)
Sponsorships, net of activation$2,819,041
Event, rents, restaurant, and other$13,855,169
Hotel$7,455,463
Total$24,129,673

Key KPIs and balance sheet:

KPIQ4 2023 / FY 2023
Visitors (FY 2023)~3.1M (hit 2024 target early)
Events hosted (FY 2023)~120 (vs ~80 in 2022)
Sponsors added (FY 2023)24 (4 in Q4)
Cash (quarter-end)$11.8M incl. $8.6M restricted
Net Debt (quarter-end)~$219M
Impairment (Q4)$8.8M (incl. $7.7M related to ForeverLawn sale)
Other income (Q4)$4.1M gain from arbitration outcome

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024n/a$27M–$30M New
Adjusted EBITDAFY 2024n/aLoss in mid-teens ($M) New
AttendanceFY 2024n/a~3.5M–3.7M New
ForeverLawn Sports Complex accountingFY 2024n/aNo revenue/Adj. EBITDA recognition post-80% sale; income shown as investment income New disclosure

Earnings Call Themes & Trends

TopicQ2 2023 (Q-2)Q3 2023 (Q-1)Q4 2023 (Current)Trend
AI/Tech for visitor analytics & operationsGeo-tracking AI implemented; stabilizing ops Continued AI-based traffic insights; improving packaging/pricing Campus-wide operating system planned to increase advance booking and length of stay Increasing tech investment and utilization
Supply chain/credit marketsInflation/supply chain and financing complexity; going concern disclosure explained Tight lending markets; capital stack optimization focus Credit tightening drives higher interest; debt extensions underway Persistent macro headwinds
Sports betting (mobile vs retail)Betr partnership; retail partner search; retail license through year-end Retail license shelf-life; partner discussions; mobile dominates Retail only ~3% of bets; cautious on retail sportsbook partner timing Mobile-centric strategy reinforced; retail optionality maintained
Media pipeline & distributionReachTV shows; GOAT Code; NFL Alumni Academy: Next Man Up Amazon and Brink’s TV content airing; pipeline building Expect “key announcements” in 2024 to “up the game” toward meaningful Media revenue Steady pipeline build; aiming for monetization
Events/attendanceRecord-setting enshrinement attendance; flattening seasonality via dome Robust Q3 event roster; revenue synergy across hotel/events Q4 events (Bill Burr, OHSAA, Winter Blitz); advance ticketing to pull forward cash Growing frequency/scale; better forward selling
Johnson Controls arbitrationPending Q3 arbitration Decision expected by end of Nov Binding arbitration outcome: $2.87M award (offset by fees), $4.1M P&L gain via liability write-offs; no appeal Resolved; operational and sponsorship positive
Phase II assets (Waterpark & Tapestry)Enclosure by year-end; targeted Q3–Q4 2024 opening Waterpark Q3’24 target reiterated; hotel to trail by months Construction slowed pending financing; projected early 2025 opening Timeline push-out; financing gating factor

Management Commentary

  • “Fourth quarter total revenue was $6.1 million, which represents an increase of 101% from the same period last year… adjusted EBITDA was minus $1.9 million compared to minus $5.5 million” .
  • “We signed 24 new sponsors, 4 in the fourth quarter alone… a sponsor… extended into a 3-year deal and the size of that sponsorship considerably grew” .
  • “We are going to implement a campus-wide operating system… the higher the guest engagement… and the higher the opportunity for us to grow revenue” .
  • “Construction has not stopped on the Gameday Waterpark… opening has been impacted… now projecting a 2025 and I’m hopeful early 2025 opening” .
  • “We are expecting [FY2024] revenue to be in the range of $27 million to $30 million… guiding to an adjusted EBITDA loss in the mid-teens millions” .

Q&A Highlights

  • Arbitration outcome: binding, no appeal; $2.87M award applied to fees; $4.1M gain from writing off liabilities under naming rights/technology agreements; eliminates large ongoing obligations and opens sponsorship categories .
  • USFL/XFL merger gap: estimated ~$0.8–$1.0M top-line impact in 2023 to replace via expanded Q1–Q2 programming and tentpole events; ongoing discussions with Fox for future roles .
  • Event monetization: advance selling of tickets to pull revenue forward; Carrie Underwood nearly sold out; NFL Flag event expected to have significant financial impact; larger Winter Blitz .
  • Technology and length of stay: campus-wide OS to pre-sell rides, parking, dining tied to events; aim to complete by mid-summer to drive longer stays and higher per-cap spend .
  • Retail sportsbook: retail only ~3% of Ohio bets; partner search continues; campus offers unique year-round traffic vs peers .

Estimates Context

  • Wall Street consensus estimates (EPS and revenue) via S&P Global for Q4 2023 were unavailable at the time of this analysis; therefore, estimate comparisons and beat/miss determinations are not provided. Values retrieved from S&P Global were unavailable due to system limits.

Key Takeaways for Investors

  • Near-term execution hinges on delivering the 2024 event calendar and accelerating forward ticket sales to smooth seasonality and drive cash conversion; Q4 events demonstrated this model works .
  • Sponsorship runway has expanded post-arbitration, with demonstrated upsizing and multi-year deals; watch for incremental sponsor adds and category expansions in 2024 .
  • Phase II financing remains the gating factor; early-2025 Waterpark opening shifts revenue ramp and synergy timing—monitor closure of hotel/waterpark capital stacks and debt restructurings (e.g., $49M extension) .
  • Mobile gaming partnership (Betr) offers optionality via equity value and guaranteed contributions; retail sportsbook remains an experience enhancer rather than a core revenue driver in Ohio’s mobile-heavy market .
  • Operational leverage is evident: adjusted EBITDA loss narrowed meaningfully in Q4; continued efficiency gains, bundling, and tech-enabled pre-selling should support margin trajectory in 2024 .
  • Attendance growth and diversified revenue streams (events, hotel, media, gaming) are core to the medium-term thesis; FY2024 guidance ($27–$30M revenue; mid-teens EBITDA loss) sets a realistic baseline for early-stage stabilization .
  • Watch list: sponsorship cadence, retail sportsbook partner outcome, media content sales/distribution announcements, and any updates on potential pro or large-scale sports events influencing Q2 seasonality .