SISTIC, an update on the numbers

In my article on SISTIC published on November 25, I speculated that SISTIC was extremely profitable and enjoyed a monopolistic position in the area of ticket distribution. I also conjectured that SISTIC was owned by the Singapore government.

Thanks to feedback from two readers, I am both right and wrong.

There are at least two other known ticketing agencies in Singapore, Gatecrash and TDC. Apparently, some of the smaller venues operated by the National Arts Council, including the Drama Center and the Victoria Theatre have been known to sell tickets through these two agencies.

Strange bedfellows: the Singapore Sports Council, an agency responsible for the promotion of sports, owns the largest ticketing agency in Singapore

SISTIC is indeed owned by the Singapore government. The Singapore Indoor Stadium (the SIS in SISTIC) owns 65% of SISTIC. The stadium is owned by the Singapore Sports Council (SSC). (I presume the unaccounted 35% of SISTIC is owned by the government directly.)

SSC is a statutory board formed in 1973. It falls under the purview of the Ministry of Community Development, Youth and Sports. (For those who enjoy acronyms, here is one more: MCDYS for the Ministry!)

Fortunately, the SSC audited annual report for the year ended March 2009 is available online. I reviewed the 84 page document (line by line and word for word, I promise!!) and found some information on SISTIC.

For those of you who don't wish to follow the numbers, I understand! You can skip to the final four paragraphs below for a summary.

Of SSC's total income of SGD 51 million, 9 million falls under the heading "Revenue from ticket sales." The heading is distinct from "Admission fees" where I believe revenue from SSC sponsored events will be accrued. A further SGD 2.5 million is listed as derived from "Program fees." Another SGD 3.5 million is shown as 'Miscellaneous income."

In the absence of more detailed information, it seems reasonable to assume that (at a minimum) the SGD 9 million is SISTIC revenue. Later in the report, a note states that SISTIC's "Property, plant and equipment net" is SGD 2.1 million.

If the assumption on income is correct, then we are talking about return on assets of over 400%.

SISTIC's running costs should be fairly low, depreciation of (say) 15% and the salaries of both the Chiefs and the Indians running the SISTIC show. Given that the remuneration for the 'key management personnel' of the larger Sports Council aggregated SGD 3.4 million it seems a safe bet to suggest that SISTIC is highly profitable.

In summary, the investment in SISTIC is listed at SGD 2.1 million and revenue is approximately SGD 9 million. Expenses will be low as salaries comprise of a few key executives and some sales and clerical staff. The cost of maintenance of the hardware and software system will be another expense.

In its present shape SISTIC seems a bit small for a divestment and public listing on the Singapore stock exchange. However, that should be the aspiration. It is a cash cow. Professional management and independent owners should be the structure.

The government's work of 'incubating and creating' a world class ticketing agency is complete.

The report contains a statement saying the Council is planning to divest its shares in SISTIC at "a future date." I guess the Singapore government may find it hard to justify why a sports stadium is running the nation's largest ticketing agency.

PS - Readers may be interested to note that SGD 5.4 million, or more than 10% of the Sports Council's gross revenue, were recovered as car parking charges!

PPS – Thank you to Leslie and Kai Weng for pointing me to the information on SISTIC and the existence of other ticketing agencies in Singapore.