Expect no love to be lost Thursday between the world’s largest promoters Live Nation and the combined team of Nederlander/AEG Live when the Los Angeles Department of Recreations and Parks is set to endorse one or the other in a fierce bidding war to manage the city’s iconic Greek Theatre.
With lengthy request for proposals that make War and Peace look like young adult fiction and a two-year bidding process with potentially hundreds of millions of dollars in concert revenue at stake, Recreation and Parks has convened a board of commissioners meeting for Thursday where it is expected to make its final recommendation for which group lands a lucrative ten-year management contract for the Greek.
Last year the Greek, with a capacity of 5,900, grossed nearly $23 million which resulted in $1.6 million in revenue-sharing for the city, according to Recreation and Parks.
At a commission meeting last Wednesday, Recreation and Parks announced it had scored Live Nation’s proposal higher than Nederlander/AEG’s. After a lengthy and contentious proceeding however, the commission moved to postpone its decision for a week in order to give the public and panel more time to review the proposals.
“We think there’s been some mis-scoring,” says Alex Hodges, CEO of Nederlander, who said his team’s venue rental bid stands to be 25 percent higher than Live Nation’s. He also noted that the complex nature of the bidding process and says there are many “points that need to be fully and fairly reviewed.”
Live Nation in its request for proposal forecasted hosting 1,400 events at the Greek over 20 years (the contract is for ten years with two five-year options), $77.9 million in revenue share for the city, $40 million in capital improvements to the site and some $6 million for a community trust.
Nederlander, which has promoted the Greek for nearly 40 years and whose contract expires in October 2015, says its bid with AEG is $17.5 million higher than Live Nation’s. The family-owned promotions and theater company also criticized Live Nation’s community plan claiming it will be funded off the back of exorbitant secondary market ticket sales which are passed on to consumers. At the same time, some local community groups, including Friends of Griffith Park, where the venue resides, have come out in support of Nederlander/AEG
In a statement Live Nation said the two-year bidding process was both “rigorous and transparent” and that its proposal ensures “the future of the Greek Theatre as a first class amphitheater without compromising the historic nature of the iconic venue or its enveloping community.” The statement also said their plan was “unanimously selected as the superior choice by a panel of independent experts convened by the City to evaluate the proposals.”
A spokesperson for Live Nation also said that earlier reports labeling the proposed Greek Theatre Trust as being funded by scalping are uninformed. The promoter says it is funding its community trust by selling premium tickets on traditional ticket outlets and “not secondary platforms.”
Since the committee released its initial scoring, Nederlander has created a website called WeAreTheGreek.com which they say was motivated by “overwhelming community support.” The site also links to a Change.org petition supporting Nederlander and which now has over 17,000 signatures.
Even if the Department of Recreation and Parks announces its final recommendation Thursday — though there is the distinct possibility they could could call for more time to review the request for proposals — the process still has several hurdles to clear, including City Council approval before it is made official.
“In 2000, Nederlander did not get the initial recommendation by the Department,” Hodges noted, “and we’re still here.”
Live Nation is the world’s number one promoter, with its yearly revenue rising 11 percent year-over-year to $6.5 billion in 2013.The company reported nearly $2 billion in worldwide concert grosses from 2,623 events to Billboard Boxcore in 2013, compared to $1.1 billion from AEG Live (2,372 shows), and $27.1 million (194 shows) from Nederlander.
Nederlander is a 102 year-old privately-held company founded in Detroit and owns theaters across the country, including: the Brooks Atkinson, the Gershwin and the Richard Rodgers Theatre on Broadway in New York; the Pantages Theatre in Los Angeles; and the Auditorium, the Cadillac Palace and the Ford Center for the Performing Arts-Oriental in Chicago.
AEG Live is the second largest promotions company, and parent Anschutz Entertainment Group is a global sports and entertainment giant whose holdings include the Staples Center, the O2 Arena, promoter/producer Goldenvoice, and owns and/or operates such festivals as Coachella and Stagecoach in Indio, Calif., New Orleans Jazzfest, and others. Goldenvoice recently acquired a majority stake in the Firefly Festival in Dover, Del.