In regard to parent Comcast Spectacor, how long is the deal with Comcast?
Forever, they own 80% of the company. Ed Snider has a favorite saying, "the fish stinks from the head." And Brian and Ralph Roberts are two of the greatest people you'll ever meet. When we did the deal, they were in 4 million homes, now they're in 23 million. What's great about them as a partner is, they're so big, financially our business doesn't mean that much to them, but they've taken a great interest in it. They like what we do, they've been very supportive, they've supported us in the form of capital to give us the opportunity to grow. The whole play for Comcast in getting involved with us is they wanted to create a network because their competition was the [satellite] dish. We had owned a network called PRISM. If you deliver the signal via landline, you don't have to uplink it, if you don't uplink it that means you don't have to offer it to the dish. In a crazy, nutty sports town, the only way to watch the Flyers, the Sixers and the Phillies was on Comcast Sportsnet. (Comcast now owns NBCUniversal, which changes that scenario).
One of the factors that has helped your growth is the boom in new buildings in secondary and tertiary markets.
In 1979 or '80, Dr. Guy Lewis told me this was going to happen, and, to his vision, it has. What's really happened is colleges and B and C markets are building mini versions of these big arenas. Maybe they have 20 suites, maybe they have 500 or 200 club seats, or 8,000-10,000 capacity instead of 20,000. They're all smaller versions of these buildings, but they come with the complexities of a big building. You've got to sell suites, you've got to sell club seats, you've got to buy the right video board, you've got to sell sponsorships. If you look at a typical city, university or county, their budgets are expense-based budgets, they spend money, and their revenue is taxes, for the most part. Government is not a revenue-generator, they're an expense-driven animal, so as these facilities progress they need to come in and generate revenue.
There are a lot of opportunities out there, but everything is not the right fit, presumably. What is?
A perfect fit for us is a decent-sized market, either an under-utilized facility or a new facility in the market. Certainly, new facilities have an advantage, because they create a lot of excitement in a market. In a best-case, you like to be involved in the design process, so you can help it be not only consumer-friendly but revenue-friendly. And for us too, from a business standpoint, the perfect facility is one where there's a need for food and beverage and ticketing so we can bring in all of our companies.
London was an exciting new market, Old Dominion University (Constant Convocation Center) was an exciting new market, but Roanoke, Va., was a facility that had been under-utilized, and we're having a ball down there and bringing in a lot of shows. You know how touring is, a building can get a black mark if acts or promoters are going in and they're not being serviced well, events are not being marketed well. And it's hard to get that back, but I think that's one of the advantages of private management. We have a reputation, you can tell [Live Nation Global Touring COO] Gerry Barad, "we have a building manager, you're going to get to know him and love him, but at the end of the day you get [Global Spectrum COO] John [Page] and I, we're accountable to you."
Are buildings more than ever willing to risk and partner on shows?
Most buildings are risk-aversive, which is probably our biggest opportunity at Global Spectrum, we do take risk. Most governments won't let the building manager take risks, it's not the manager. We co-promote and we incentivize promoters. Here's what's changed since 1981: you don't sit across from the promoter, you sit next to them.
Why did you get into the ticketing business?
With the advent of the Internet, the barriers to entry to ticketing were blown away. Before that, it was so capital intensive from a hardware standpoint, with these data lines and outlets, it was a very expensive proposition to be in that business. It's still not cheap, because obviously when you have a technology company you have to manage it, you just don't say "I'm in ticketing" and it all works. But you don't need outlets any more.
You've managed to be Switzerland in a lot of controversial developments over the years, you understand that today's competitor might be tomorrow's partner.
That's one thing I've seen in this industry. From being hockey a player, I learned you don't take anything personal. All the chirping on the ice, the coach giving you a hard time, that's all part of the game. The one thing I would tell a young person, and I didn't understand until I was in it, is you should really, really try and avoid burning bridges. If you've got to get in a fight -- and we'll fight if we have to -- fight over the issue, not your ego. Because if you fight over the issue, maybe there'll be a rough time between you and someone, but at the end of the day you'll regroup with that person.
What's the next big development for the live entertainment business?
You'll see more development around arenas controlled by the arena owners. One, it provides another form of entertainment for your fans, and secondly it's another great revenue source, outside the arena. I don't think there's a new mousetrap in arenas right now. In the future there will be. Now the new mousetrap is developing around the arena. Where in the past you saw people negotiate arena rights, now you're seeing people do like we did and negotiate development rights.