Oak View Group Battles ASM Global in Fight to Be Manchester's No. 1 Arena

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Courtesy of Oak View Group

LONDON — The northern U.K. city of Manchester is famous around the world for its rich musical heritage. Joy Division/New Order, The Smiths and Oasis are just a few of the well-known acts to have emerged from its red brick streets over the past 40 years.

It is also a city that has known great pain. In May of 2017 a terrorist detonated a bomb outside Manchester Arena after a concert by Ariana Grande, killing 22 people and injuring hundreds more.

Today, Manchester is once again in the spotlight, although this time it's not because of tragedy or a hot new band or singer. Instead, the city is the scene of a row between ASM Global, owners of the Manchester Arena, and Oak View Group (OVG) — the global sports and entertainment company founded by Tim Leiweke and Irving Azoff in 2015 — over plans to build a competing arena.

At the heart of the dispute is OVG's plans to build a new £350 million ($425 million) arena in Manchester's Eastlands district, close to Manchester City Football Club's Etihad Stadium. The proposed arena is OVG's first major project outside of the United States. If approved, it will have a maximum capacity of 23,500, making it the largest indoor arena in the United Kingdom, ahead of both Manchester Arena and London's The O2 Arena, which both have a capacity of 21,000 people.

According to OVG, the new arena will bring in between 750,000 and one million new ticket sales per year and provide more than 1,000 jobs once opened. It will also deliver an acoustically exceptional auditorium, says the LA-based company, "providing an intimate as well as engaging fan experience for all."

OVG's plans are, however, far from music to the ears of fellow LA-based venue management company ASM Global, which took over ownership of Manchester Arena last year, following the merger of AEG Facilities and SMG.

ASM Global's view is that Greater Manchester, which has a 2.8 million population that comprises the city and its surrounding towns and boroughs, is not big enough to support two separate arenas. The company argues that opening a new venue just a few miles away will have "devastating effects" on the local economy, driving events and football out of the city center.

"Existing independent analysis on market demand from Oxford Economics and Grant Thornton is clear; that two 20,000 capacity arenas in Manchester are not sustainable," says a spokesperson for Manchester Arena, which opened in 1995 and regularly features in Billboard's Arena Power List.

According to Billboard Boxscore, Manchester Arena — which welcomed its 30 millionth customer in 2018 — grossed $55.3 million in ticket sales over a 12-month period between July 1, 2018 and June 30, 2019.

The darkest point in the venue's 25-year history came on May 22, 2017, when Salman Abedi, a 22-year-old radical Islamist born in Manchester, detonated a homemade bomb in the foyer area of the venue following Grande's concert, which was part of her Dangerous Woman Tour. The explosion killed Abedi and 22 concert-goers, injuring several hundred more. The Greater Manchester Police declared the incident a suicide bombing and terrorist attack.

Despite the deep physical and psychological wounds, the attack did not slow the growth of Manchester, which was the fastest-growing city in the U.K. outside of London in the 2011 census, in percentage terms, with a 19% increase in a decade. A State of the City report last year projected Manchester's population would exceed 635,000 by 2025, up from about 548,000 in 2018.

How Many Arenas Does a City Need?

Seeking to protect its future against OVG's plans, Manchester Arena argues that where two arenas exist in other U.K. cities they are not both in excess of 21,000 capacity.

In London, for instance, the 12,500-capacity SSE Arena, Wembley, is the city's biggest indoor venue after The O2. Greater London also has a population three times the size of Manchester and a superior transport network. In Birmingham, which has a population of just over one million, the 15,800-capacity Arena Birmingham and 15,685-capacity Resorts World Arena are both operated by the NEC Group.

"It is clear that adding a second arena at 20,000 capacity will simply split the existing number of events between two locations," says a spokesperson for Manchester Arena.

OVG, which has submitted a planning application for its proposed venue, disputes Manchester Arena's argument. It says that opening a new arena will not undermine the commercial viability of the existing venue.

"Manchester is a thriving city with an iconic history of world-leading music, sport and live entertainment," says Tim Leiweke, co-founder and chief executive of Oak View Group, in a statement. He says in-depth studies, economic data and growth forecasts (commissioned by OVG) all indicate that Manchester could support two successful arenas, "even under the most conservative growth projections."

"The city has undergone transformational growth in recent years, but without a new state-of-the-art arena it will continue to lose out to other cities on some of the world's best events," says Leiweke. He warns that without investment, Manchester is in serious danger of getting left behind by other major music cities in the U.K.

OVG points to plans to open two new entertainment arenas in London — the MSG Sphere London and a new event/performance space at the Linford Christie Stadium — and proposals to expand the capacity of Resorts World Arena in Birmingham by 6,000 as putting further pressure on "Manchester's position in the live entertainment market."

Leiweke says his company's plans to open a new arena in the city will "put Manchester on the global entertainment map for decades." If it receives approval, OVG intends for the new venue to open in 2023.

For its part, ASM Global and Manchester Arena will continue to fiercely oppose OVG's plans and has appealed to Manchester City Council to fully scrutinize the rival company's proposals.

"We would urge the Council to carefully consider whether now is the time to approve plans that will further jeopardize our City Centre," says a spokesperson for Manchester Arena. "We need to stand together to protect culture, entertainment and hospitality in the heart of Manchester."

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