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CANTON − The Hall of Fame Resort & Entertainment Co. expects to resolve its ongoing naming rights and financial dispute with Johnson Controls by the end of this year.
President and CEO Michael Crawford told investors during a recent second-quarter earnings call that the company is preparing for arbitration in the third quarter of this year. The two companies engaged in mediation but were unable to come to a satisfactory agreement, he said.
"And so we continue now with the process," he said. "I will say that I have every expectation that we have a positive resolution on this."
Johnson Controls is an international company that produces smart building technology. Its U.S. headquarters is in Milwaukee.
Johnson Controls in 2016 entered into an 18-year naming rights deal with the Hall of Fame Village LLC, a partnership between the Pro Football Hall of Fame and Industrial Realty Group developing the Village. It included an agreement to use Johnson Controls products for the "first-ever sports and entertainment 'smart city.'"
The local limited liability company merged with Gordon Pointe Acquisition Corp. in 2020 to form the publicly traded Hall of Fame Resort & Entertainment Co. New naming rights and technology agreements with Johnson Controls reduced the global company's investment from $135 million to $99 million.
Last year, Johnson Controls claimed that the Hall of Fame Resort defaulted on a technology service agreement and was seeking $4.75 million. The company sought to end its sponsorship of the Hall of Fame Village.
The Hall of Fame Resort has maintained that it is fulfilling the agreements.
"I think we will be able to demonstrate why that is the case and why what we've done is exactly what we committed to do," Crawford said. "I think they have a different view, and so we'll leave that for the panel to opine upon and give us a decision."
Mixed second quarter results
The Hall of Fame Resort reported a 128% increase in revenue compared to the second quarter of last year. But it also had a greater net loss than the same period in 2022 and a lower cash balance than the first quarter.
Second quarter revenue was $6.1 million and attributed to event and rental revenue at the Village and DoubleTree by Hilton Canton Downtown hotel.
The second quarter net loss was $13.6 million, compared to a net loss of $9.2 million last year. Increased operating expenses and interest drove the change, according to the company.
The Hall of Fame Resort had a cash balance of $29.2 million at the end of the second quarter on June 30. It had a balance of $47 million as of March 31.