The Madison Square Garden Company and Irving Azoff, chairman/CEO of Azoff Madison Square Garden Entertainment, the team behind the return to glory of the Forum in Los Angeles, have partnered with Las Vegas Sands Corp. to bring a new 17,500-capacity venue to Las Vegas in a deal that will be announced today.
Like the Forum, the new Vegas arena will be purpose-built for music and other non-sports entertainment. Speaking with Billboard prior to the announcement of the deal, Azoff says the new building, privately funded and to be owned by MSG, will be, “like the Forum on steroids.” In addition to Azoff, on the call were Doc O’Connor, president/CEO, the Madison Square Garden Company, and Rob Goldstein, president/CEO, Las Vegas Sands.
The structure of the partnership is similar to the Forum, Azoff says, with the exception of the involvement of the Sands (which owns the property on which the venue will sit) in what Azoff termed a “long term marketing relationship.” Also involved in the project is Oak View Group (OVG), an L.A. based venue consultant, development and investment company launched late last year by Azoff and former Anschutz Entertainment Group CEO Tim Leiweke, that will “provide insights and access to premier entertainment for the new venue.”
The as-yet-unnamed 400,000 square-foot venue will be located on Sands Avenue between Manhattan Street and Koval Lane, and the partners are billing it as “the world’s largest venue built specifically for music and entertainment.” All 17,500 seats will be configured in front of the stage, with a scalable seating capacity that allows the venue to present a wide range of entertainment, from production-heavy touring concerts to artist residencies, awards shows, and other events. In addition to “superior acoustics,” the release announcing the project promises “a venue of the future” and “new and innovative experiences for both artists and fans.”
Azoff, now following up on his vow to build more entertainment-focused venues in the vein of the Forum, says this “major project” in Las Vegas was indeed “inspired by the success of the Forum: a non-team-sport building to bring in every kind of entertainment, in the music area, especially,” he says. “Vegas is, in our opinion, the entertainment capital of the world, and as we roll out these buildings we thought Vegas was the right place to go.”
Another notable backer of the project is Live Nation, the world’s largest promoter. In the release announcing the deal, Live Nation CEO Michael Rapino states, in part, “By working with the best team in the business, we have no doubt that this new venue will raise the bar for the live experience in Las Vegas.” Asked specifically about the nature of Live Nation’s involvement in the project, Azoff responds, “we haven’t structured it yet, but you can rest assured [the new arena will be] Live Nation’s preferred destination in Vegas.” Ticketmaster, a division of Live Nation, will be the ticketing company in the new venue.
A relationship with Live Nation could seem critical in attracting top talent, given that this new venue would be the fifth arena in Las Vegas, joining the 13,700 MGM Grand Garden Arena, the venerable 18,500 Thomas & Mack Center on the UNLV campus; the 12,000-capacity Mandalay Bay Events Center; and the latest addition to the marketplace, the 20,000-seat T-Mobile Arena, a $375 million multipurpose arena partnership between MGM and AEG that opened earlier this year and has already hosted concerts by Guns N’ Roses, George Strait and the Killers in five total shows that grossed $13.6 million. That arena is currently vying to become home ice to an NHL franchise.
“I don’t worry about the other four [arenas],” Azoff says. “I just know we’re going to build the greatest place in the world for acts, they are going to want to play there.”
While it’s true that Thomas & Mack rarely hosts concerts these days, and the MGM Grand Garden Arena will likely give way to the T-Mobile Arena as a booking priority, the latter, while potentially destined to one day be home for a professional sports tenant, is currently a hot property for tours routing through Vegas. Coming up are five shows from Garth Brooks, along with stops by Dixie Chicks and Coldplay (both Live Nation tours), Barbra Streisand, and many others. Additionally, AEG Live has long been both aggressive and successful in Las Vegas, booking the Joint at the Hard Rock Hotel and the Colosseum at Caesars Palace (including Celine Dion’s industry changing residency), among other venues.
Those behind the new MSG project hope to bring some of that action to the other end of the strip. A pedestrian bridge will connect the new venue and the Sands’ Venetian and Palazzo resorts, touted as “the largest resort under one roof in North America” with 7,000 rooms. Goldstein says the new venue’s location will give the Sands, “an entertainment platform unlike any other,” adding, “We have a lot of confidence in our partners to bring in the right acts, and plenty of them.”
For MSG, expanding its venue portfolio into Las Vegas gives the multi-faceted entertainment company a potentially game-changing presence far outside its home base of New York, much as the success of the Forum, which MSG spent $100 million renovating, did on the West Coast. Last year, the Forum was topped only by New York’s Madison Square Garden in total gross among U.S. arenas, according to Billboard Boxscore; the building not only quickly gained market share, it played a significant role in growing the overall L.A. concert market.
To that point, O’Connor notes that the L.A. market went from 122 shows before the Forum re-opened in January of 2014 to 181 in 2015. Last year, according to O’Connor, Vegas hosted 48 concerts in buildings that topped 9,000 capacity, “so we think that there’s a tremendous opportunity in the marketplace in Las Vegas, with 42 million visitors, to increase that market dramatically with a purpose-built music and entertainment-only venue,” he says.
With its robust tourism market, Vegas is a natural for residencies, and has been ground zero for a new breed of lucrative and lengthy artist engagements, jumpstarted by a Celine Dion blockbuster at the purpose-built Colosseum, a booking that has to date churned $552.8 million in ticket sales to 976 shows, according to Boxscore. Inspired by Billy Joel’s massively successful “franchise” monthly residency at the Garden, Azoff says MSG will be expanding the concept with “major” artists in a model that could extend to the new Vegas venue. “In fact,” he says, “there’s a couple of announcements coming pretty soon [regarding] residencies that will also include Vegas, so we’ve actually already started booking it.”
Rob Light, managing partner at Creative Artists Agency, says that, in general, new venues are good for talent and competition is good for business. Specifically to this MSG/Sands project, Light says the venue’s configuration and focus on acoustics are positives. “That’s part of the great success behind the O2 in London, [and] it certainly has been the success of the Forum, arguably, one of the best sounding arenas in the world,” he says.
Bottom line: “There’s a lot of demand in this town,” Goldstein says.
Beyond the nature of the venue, details on the project are few. Other than noting that the venue would be privately funded, the partners had little to say about the cost of the project, or the timeline for groundbreaking and completion. “We’re just finalizing our timeline now,” says O’Connor. “We’re going to have a major event later this year, and we will present more fully all of our design plans and timeline at that point.”
That said, work on the venue will begin “as soon as is feasible,” according to Azoff. “We’ve got some very advanced plans done,” he says, adding that the development of the project is, “out for bid.”
Time will tell if this new performance venue can find a place of stature on the crowded Vegas entertainment map, but Light seems optimistic. “There are very few venues that sell tickets—artists sell tickets,” he says. “But there are a handful of venues where you say, ‘wow, if that artist is playing in that venue, I want to go.’ The Hollywood Bowl does that, Madison Square Garden does that, the O2 Arena, Radio City Music Hall. I think that’s the sort of venue they’re trying to build, and they’ll pull it off.”