Ready to make an impact in your community?
By Ally Azzarelli
For many cities, the mere thought of turning a cherished community asset over to a third-party facility operator can create fear and uncertainty, with questions like, “Are we giving up control?” In the Sports Facilities Companies (SFC) recent webinar, Beyond Capacity: How Cities Are Using Third-Party Management to Deliver Results, municipal leaders and SFC venue experts sat down to discuss how cities can leverage outside expertise without sacrificing public accountability or community-first values.
As SFC Partner and webinar moderator Eric Sullivan put it, “You’re still in control. You’re still calling the shots — you’re just bringing on expert management to run the asset at a higher level.”
Third-Party Management Is Not Privatization
A common misconception is that third-party management is part of privatization. It isn’t.
According to SFC EVP of Venue Management Michael Kelly, third-party management involves hiring a specialist to operate a facility on the city’s behalf, not selling the asset or walking away from core responsibilities. He compared it with privatization, where an operator can often “run it however they want” without a contractual commitment to community goals.
Brian DeLatte, Deputy City Manager, Portland, Texas, summed up Portland’s approach to its sports and entertainment venues in one sentence: “We didn’t sell the asset; we hired the expertise.” It’s that mindset shift that’s critical for city managers, parks and recreation leaders, and elected officials who want better performance while maintaining public trust.
Defining Public Control
Partnering with a third-party facility operator does not mean stepping aside. It means redefining roles and keeping in mind that:
- The city still owns the asset.
- The city still sets policy.
- The city still approves the budget.
- The operator manages day-to-day performance.
In other words, city leaders are still in control of missions, policies, and financial oversight — while the operator provides specialized staffing, systems, and technology to operate the building at a higher level.
“A third-party manager is an extension of your staff, not a replacement for public accountability,” described DeLatte. He says residents still view the venue as a city facility, and any issue ultimately returns to local leadership. That’s why the governance structure for a third-party operator is so important.
Governance: Contracts, Check-Ins, and Accountability
Protecting public control starts with a clear contract and continues through consistent communication. Before signing, cities like Portland and Bryan (Texas) spent time aligning on:
- Community priorities and access
- Expectations for local leagues and residents
- Financial and quality-of-life outcomes
- Equity, inclusion, and economic impact goals
Once the contract’s signed, the work continues. “Third-party management is not ‘set it and forget it.’ You don’t sign a contract and walk away,” explained DeLatte. City teams meet with operators weekly or biweekly and at multiple levels — daily, monthly, and quarterly — to review performance, budgets, and needs.
Budgets are developed collaboratively but are ultimately approved and overseen by the council, just like any city department. That structure keeps the operator aligned with public expectations while giving them room to execute efficiently.
Keeping Community First
For city leaders, community benefit must remain a priority, especially for publicly funded sports, recreation, and entertainment facilities that serve as gathering places and economic engines.
DeLatte said, “These are community assets built for families first, local leagues first, residents first, before sports tourism or big concerts.”
The contract with a third-party facility operator should codify that priority by protecting local access, keeping prices fair, and ensuring programming reflects community needs. Performance metrics can and should include:
- Resident usage and satisfaction
- Youth and local league access
- Economic impact and visitor spending
- Facility condition and maintenance standards
When those community priorities are clear, third-party partners can bring their sales teams, relationships, and operating playbooks to the table to grow revenue, without pushing aside the residents who helped make the facility possible.
A Tool to Expand Capacity, Not Replace Leadership
For many cities, the decision to bring in a third-party sports facility operator or management company comes down to capacity. Typically, their staff is stretched thin, technology is outdated, and recruiting specialized talent in-house is challenging. Third-party management offers a way for municipalities to bridge those gaps while staying true to their public mission.
Kelly pointed out, “When you hire a third-party company, you’re not just hiring one general manager, you’re tapping into hundreds of people’s experience across similar facilities.”
When used well, third-party management becomes a tool that helps cities protect public control, advance community goals, and deliver higher-quality service in the facilities residents care most about.
Access the full webinar here, and if you’d like to connect with the team at SFC, call us at 727-474-3845 or tell us about yourself here.
