Marketing Conference Kicks Off with Lively Contrast of Views

10 Jun

The EAMC state of the industry panel included columnist Jim DeRegotis, Jim O'Neil of the Chicago Bulls, Nederlander's Alex Hodges and Rich Krezwick of the Devils Arena Entertainment.


REPORTING FROM CHICAGO — The Event & Arena Marketing Conference got off to a rousing start Wednesday during a spirited debate at the opening “State of the Industry” Panel.

Music critic and Columbia College of Chicago professor Jim DeRogatis prodded and occasionally poked a panel of industry experts that included Alex Hodges of Nederlander Entertainment, Joe O’Neil of the Chicago Bulls and Rick Krezwick of Devils Arena Entertainment and dipped heavily into the impact of the Ticketmaster/Live Nation merger.

“We were all waiting for something to happen, and nothing has really happened,” said Krezwick. “I think the big advantage now is that there’s another major ticketing company about to blossom with AEG, which is good for all of us with a building contract that is about to come up to bid.”

Krezwick said the biggest change is the shift in the rebate structure between the facilities and Ticketmaster over service fees. Instead of a percentage of fees, facilities will now be charged a flat fee per transaction (between $2 – $2.50), and the building will keep the remainder of the money.

That puts the fate of Live Nation’s No Service Fees promotion in question, especially since rental rates have been static for 20 years.

“The only way you make money is off the ancillaries. If we lose the four or five bucks per ticket, it’s just going to become a lot harder to make buildings work and I don’t see buildings giving it up that easily,” he said

Where does that leave independent promoters, a group DeRogatis called “a rarer breed than a healthy pelican in the Gulf not covered in oil,” like Nederlander or Chicago’s Jam Productions?

“We’re fortunate that we have a few must-play venues in our market,” said Hodges. “Being an independent, we have to work harder to sell our building. We have competitors who can buy an entire tour, and we try to buy a handful of cities, so our model has been adjusted.”

Even more challenging is that the Greek Theatre’s competitor is part of its ticketing company (and represents many of the artists who play the facility), and despite reassurances from Christine Varney at the Justice Department that government-monitored firewalls will be put in place to block the sharing of certain information, what’s to stop “a Live Nation representative from yelling at the Ticketmaster guy three cubicles down,” said DeRogatis, “and asking him what [the Greek] just offered for the Eagles concert?”

Hodges was stoic in his answer, simply replying “that’s yet to be seen.” He later added “for them to have that type of absolute knowledge would concern anyone. We’re already fighting for the shows and the price we pay for shows.”

An even bigger challenge is determining the correct price for a ticket; brokers are marking tickets up while discount sites like Goldstar and TravelZoo are flourishing. Many facilities are finding themselves making money from the scalping of their own tickets.

“About three years ago, we had this writing on the ticket that said the resell of Chicago Bulls tickets above face value is expressly prohibited,” O’Neil said. Now, the company has a deal with Ticketmaster to resale Bulls seats on TicketExchange “so we have the same thing, but it says it’s expressly encouraged,” later adding, “Everybody is selling to everybody. You can go to my website and buy a ticket I just sold to another guy, selling them back and forth, all print at home. They’re like invisible paper airplanes flying all around the city, and I don’t know who the hell is in my building.”

DeRogatis said as a consumer, he despised resale, promised to perpetually refer to the practice as “scalping” and noted that not all musical groups are driven by money or fans trying to flip tickets to make a buck.

“There’s an ethic in the Flaming Lips community and there’s an ethic for bands like Wilco and Dave Matthews where people don’t do that. They want the tickets to go to the fans,” he said, pointing out that many kids today couldn’t afford $350 tickets to go see Paul McCartney, although it was an inexpensive Little Richard show over a half decade ago that inspired the Fab Four crooner.

Regardless of how the industry evolves, it’s clear that venues aren’t necessarily in the driver’s seat and it will be agents and managers who shape the direction of business.

“The problem from my perspective is that we’re overbuilt. There are just too many facilities,” Krezwick said. “Even if there aren’t two arenas in close proximity, a band will play Detroit and skip Chicago. There are only 35 dates on the tour and they’re not going to take your nonsense. If they don’t want to play your building, they will skip you.

But all is not lost. DeRogatis pointed out that demand for live entertainment certainly hasn’t subsided. Live music is still the only industry “where people pay money to be in the same room as another person, despite many the escort business.” — Dave Brooks

Interviewed for this article: Jim DeRogatis, (773) 775-1093; Joe O’Neil, (312) 455-4103; Alex Hodges, (323) 468-1710; Rick Krezwick,rkrezwick@prucenter.com

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