Real outlook for finances looks shaky, report says

Real Salt Lake might not be able to pay its bills.

An independent financial consultant's report shows that even in the best of circumstances, the Major League Soccer franchise is running $1.2 million short of what it would need to pay off the debt service on construction bonds for a potential stadium in Sandy.

However, the report only looked at the stadium's cash flow, and not the team's overall operations, including a radio station.

In a worst-case scenario, Real would only have $201,000 in the bank to pay off at least $3.3 million in debt a year, according to the report by Economics Research Associates, which was embargoed until 7:01 a.m. today.

Real Salt Lake leaders believe they can make more than enough money through ticket sales and concerts to pay off the debt. But ERA's report shows Real's business plan was a little too ambitious — an assumption that team officials knew was coming.

"With all due respect to ERA, their assumptions are, in our view, unrealistically conservative," said Gary Reimer, Real's chief financial officer.

Team owner Dave Checketts believes he can book 11 concerts a year, but the ERA report said at best, the stadium could bring in six concerts.

Joel Peresman, president and chief executive officer of the Rock and Roll Hall of Fame Foundation, said Checketts' plans for 11 concerts a year "are easily attainable." Peresman has worked for Checketts in the past, when they both were employed at New York's Madison Square Garden.

Peresman said Checketts and his management team "are uniquely qualified, experienced and have the entertainment-business connections that position them to be able to maximize concert traffic for this new facility."

At minimum, the ERA report said, Checketts could expect two concerts a year at the Sandy stadium.

That baffles Real officials.

"To suggest we would only put two concerts a year, we just can't fathom that," Reimer said. "Why would we even be in this business? I just don't understand how they conclude that."

ERA also softened Real's predictions for ticket prices.

The team forecasts a 29 percent

jump in ticket prices from the year the stadium opens in 2008 until 2012 — because prices would jump from $22.78 to $29.42.