Tim Leiweke, Former AEG Chief and Current Oak View Chief, on the 'Untapped Opportunity' in Music
Almost exactly a year ago, Tim Leiweke, former CEO of Anschutz Entertainment Group (AEG), and veteran artist manager Irving Azoff launched the Oak View Group, a Los Angeles-based alliance of arenas designed to boost revenue, sponsorship opportunities and efficiencies for its members. One year later, Leiweke, one of the featured speakers at the Billboard Touring Conference, spoke with Billboard about his company and the challenges and opportunities in the live-entertainment landscape.
How was OVG’s first year? Are you achieving what you set out to do?
We originally saw a hole in the marketplace where we could pull together arenas in big markets and create content and sponsorship opportunities and new services that would ultimately provide the opportunity for all of us to better run our facilities long term. It’s an alliance: we have 23 arenas now and we’re finding one or two more tours a year that might not have come to arenas that will now, and we are still very optimistic that we’re going to generate on average close to a million dollars in new sponsorships per arena by the end of our first year.
What can the live-entertainment industry do to solve the issues with the secondary ticketing market?
That’s a hot topic for all of our partners in the alliance. There’s, what, $3 billion worth of revenue that’s being collected and distributed that doesn’t necessarily go to the promoter, the facility or the artist. Well, those are the only three at the table that have real skin and risk in the game for live entertainment, and the fact that the majority of the revenue goes elsewhere means we have a flawed concept, so we’re working and thinking through how we do that. We’ve spent a lot of time talking to Live Nation and Irving Azoff and other managers, and technology is what’s going to help us solve the problem. We’re not sure of the perfect solution yet but the relevant partners that have the risk have to be involved in the reward.
What are sponsors looking for these days?
They’re a lot less interested in branding and putting a sign up; they want unique activations. Sports is easy because we know we have 41 nights of hockey or basketball and we know how to package that with sponsorships and we’ve created a multibillion dollar industry. Music is a great untapped opportunity: we’ve got half a million to a million people going through a building [yearly] and remember, they’re almost all uniques; these are not season ticket holders. So one of the things that we’re working on is music clubs, [like] Drake’s [invite-only, $7,000 per year Sher Club] in Toronto, where you package a unique, exclusive, Las Vegas-style experience: someone is spinning music, there’s great food and drinks, you know exactly when the artist is going onstage and then you come back to the club afterwards. Sponsors are very interested in that. and being able to get 12-15,000 people a year [per venue] through a private club like that is the next big idea and the next place we’re trying to go to.
How important is music content to arenas today, particularly those with sports tenants?
It is the very essence of what the arena alliance stands for. If we can get even 2-3 more nights of music programming in a building then that moves the needle for them on content, the value of suites, the value of sponsorship. So we’re going to continue to fight hard for every tour and every piece of content that’s out there. Ten years ago you weren’t seeing a dozen nights of music [per year] at Fenway Park or Gillette Stadium, and now you do. Music is very important and it continues to grow.
I’ve heard managers say that some arenas are so booked with sports and other events that they have to book their music acts two years in advance.
Well, another idea we’re working on is we’re talking with the NBA and NHL on how to schedule buildings around playoff dates, and how to wrap tours into regions where we could move a concert date if we have a conflict with a playoff game. It is competitive out there and what we can’t afford is to take two of the most important months of touring -- May and June -- and lock everybody out. We can absolutely continue to grow music.
From where you sit, what’s the biggest challenge facing the live-music business?
I think it’s several. Security and counterterrorism is something that keeps me up every night; the last two years have proven that live venues are a target and we have to address that. Also, we have to create economics so we’re not just working with the existing pie, we have to figure out how to grow the pie. And we have to make sure we are continuing to build, redesign and renovate buildings in a way so that there’s no greater way to experience music for the artist and their fans. For arenas, music has to be as important as the anchor tenant, because it is the other anchor tenant.
This article was originally published in the Nov. 12 issue of Billboard.