City Winery CEO Michael Dorf on Expanding His $40 Million Business and Why Older Fans Just Want a Place to Sit
Michael Dorf is the classic New York success story: music-loving Midwesterner arrives downtown in the 1980s; hops into an arts scene that includes Lou Reed, John Zorn and Sonic Youth; opens a coffeehouse performance space; builds an international brand; walks away from it all; and starts over.
"I needed to think through what I'd like as a customer," says Dorf, 53, a Milwaukee native who, after founding The Knitting Factory, went on to launch the tech-minded MacFest and Plug-In confabs and produce benefit shows at Carnegie Hall before starting his most lucrative music-business venture yet: City Winery.
Today, the married father of three heads up the chain of venue-restaurants (average capacity: 300) boasting a curated selection of live music and fine vintages, and whose flagship Tribeca location, which opened in 2008, is mere blocks away from Houston Street where Dorf first exercised his entrepreneurial spirit two decades earlier. With clubs in Chicago and Nashville, new venues in Atlanta and Boston planned for 2016 and two more major cities in the works (a Napa, Calif., location, ironically, is closing), Dorf employs some 550 employees and will take in an estimated $40 million in revenue in 2015.
How did you get from Wisconsin to New York City?
I always wanted to be in New York and started getting Swamp Thing, the band I was managing, gigs there. I guess I created a bit of that Steve Jobs' "distortion reality field" that you could also call outright bull-shitting: I would get them gigs in New York and say, "these guys are the hottest thing in Madison." And then come back to Madison and say, "the hometown band is really taking off in New York." I moved there and got an apartment on 10th Street and the band basically moved in with me.
How did that turn into the Knitting Factory?
In 1986 I was getting close to having to come back to Milwaukee because the band was struggling and my plan to be a record mogul [Dorf ran Flaming Pie Records] wasn't working out. So I borrowed money and took my Bar Mitzvah savings and gave up my apartment and rented the Avon office on Houston Street. My friend Louis Spitzer and I did rudimentary construction and he became my partner. It was going to be a gallery performance art space coffee shop called Expressoism. I envisioned a kind of Jack Kerouac thing that would have been what it was like to be in Paris or in New York during the Beatnik 1950s thing. Then we decided on naming it the Fire Escape, which a week before opening we decided was a really bad name.
You had a huge variety of shows at the Knitting Factory, what was your favorite?
Gosh, so many, but when we took over Estella's Restaurant below the Knitting Factory Jon Zorn's Naked City [with Bill Frisell, Fred Frith and Joey Baron and Wayne Horowitz] played. Their music was incredible, eclectic and very very energetic and had a strong rock sound. They did five shows when we opened up the downstairs space. He'd bring in charts, they'd rehearse all day and then they did like 20 songs. And the next day Zorn would bring in another 20 songs and he did that for five days. Each day was completely different and the insanity of Zorn and the masterful craftsman musicianship of those guys was unbelievable.
What prompted the move to Tribeca in 1994?
A couple of things: The ceiling [covered in sweaters with flame retardant spray] was one of many things we did by hand from the electrical work to the plumbing to the means of egress. It was great place, it had incredible history, but it was time to find a place that was bigger and safer and I wanted to expand to have a multi-room venue.
What were some of the endeavors you expanded into beyond daily bookings?
In 1995 I was really getting into technology and produced the first MacFest. We were starting to stream, but you couldn't even call it streaming with only 14.8 modems. I convinced Bell Atlantic to give us money to start the Bell Atlantic Jazz Festival in '96 and then Intel came in and outbid Mac. And the Knitting Factory label was growing like crazy and had an office in Amsterdam.
What prompted your split with the Knitting Factory?
Starting in about 1997 I wanted to expand all aspects of what we were doing and did three consecutive rounds of financing. I started to not call it music, but content and was getting caught up in the idea that the Internet was going to allow me to get our music and our brand in front of millions of people. Then the 2000 dotcom crash came and the implosion of the record business and then 9/11. 2002 was a very tough year and we had to let a ton of people go. By 2003 I had diluted myself out of a control position within the company and recognized that I didn't want to be fighting with investors and feeling like i didn't control my own destiny.
What lesson did you learn from that period?
There were so many but as a young entrepreneur, I got caught up in forgetting that technology is just a tool to ultimately accomplish a goal, to provide service to the customer and that's my approach now.
What was your relationship like with Lou Reed?
He played at the old Knit and then we got into the wine thing together. We had this Jewish and wine connection.
Didn't he do your Passover Seder events?
Lou probably came to five or six of my Passover seders. I have a picture of him at our last Passover Seder three or four months before he died. He read Exodus, but he read Bob Marley's "Exodus." In the picture he's embracing me on stage and that means a lot to me, I feel really very lucky to have had a special relationship with him.
How did you get into wine despite hailing from the land of beer?
I've always had an interest in Wine. My Uncle Shelley nicknamed me Mr. Beaujolais because freshman year I came home with a bottle of beaujolais. Later I got a chance to make a barrel of wine with one of my brother's very good friends who was working at Ridge Winery in California. I had this experience of making wine and it was one of the funnest things I had ever done and that's when I drank the Kool-Aid.
How did that transition into City Winery?
City Winery was a well thought out, methodical plan in order to look at what could be a money-making music business centered around wine. Or you could rephrase it a money making winery business centered around music -- they're interchangeable. We thought of going for a sort of older demographic who have disposable income and are very underserved. These audiences don't want to stand, they want to sit, they want to be treated in a much more refined way and many of them are pressed for time. So we've created a luxury concert experience. We're really only the game in town putting on a show at the level that we're putting it on and taking a kind of Danny Meyer restaurant approach to the customer experience for a show. We have shows with the Crosby Stills and Nashes and the Joan Armatradings and last month had Gregg Allman here.
Now you are expanding City Winery. Is there a risk in too much, too soon?
Certainly expansion that is too fast or undercapitalized will not be successful. But a well-planned, strategized and methodical rollout into the right markets mitigates how risky it is. We made a mistake with Napa, but we learned from it. Our openings in Atlanta and Boston; then Toronto; Washington, D.C.; Houston; Denver; Seattle; Miami and wherever else we land in the next few years will be responsible expansion.
Who was your business mentor?
If I have to have one in person it's George Wein. He's someone i've been close friends with for the last 15 years and we have a very interesting relationship because I started by very much competing with him but he never looked at me in any negative way. He taught me a lot of lessons and continues to be a close friend and just an incredible gentleman.
What is City Winery's place within the larger touring landscape?
We're very bullish on the state of touring. As the supply of older talent with some degree of brand awareness continues to age, the expectations of their fans will create more of a need for a space like ours. Live Nation is not getting into the high-end restaurant/wine business, and, frankly, there aren't too many wineries going into the concert business.
So what do you say to someone who says there are no second acts?
I'd say they're looking at the wine glass as half empty.
A version of this article originally appeared in the Dec. 12 issue of Billboard.