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When Lee Zeidman, president of Staples Center, Nokia Theatre L.A. Live and L.A. Live, Los Angeles, for AEG, walks into a room of entertainment industry pros, someone inevitably asks how he’s surviving the turf wars in Southern California. With the reopening of the Forum, Inglewood, Calif., under the ownership of Azoff-MSG Entertainment last year, an already competitive arena environment went ballistic.
A look at the California Top Stops numbers for calendar 2014 puts the Forum on top, reporting more concerts and family shows and a higher total gross than Staples Center for that time period. But that’s not the whole story. Staples Center also has three major league sports teams, an incredible stable of corporate sponsors and a campus full of promotion and media partners at L.A. Live. Concerts promote suite sales and fulfill sponsor obligations and sports promote ticket sales for concerts. Of 240 events annually at the arena, 20 percent are concerts and family shows.
Zeidman outlined the current strategy at Staples Center as the rules of doing business continue to evolve, emphasizing that he has thrown out the rate card, bundled assets and offered up bonuses for routing during the iffy playoff time period.
What did you tweak in 2014 because the Forum came on line?
There are no more rate cards. It’s all about what it takes to get the show in a competitive marketplace. When we opened Staples Center, we had a rate card, which we tweaked over the first 10-12 years as we went forward. There are certain expenses that are there; we don’t traditionally cover stagehands or backstage catering, those type of things. But if you ask me what is your rate card, my answer is, “What is a rate card?”
Music-only venues tout availability. What do you do to book shows during the uncertainty of playoff season, not knowing your availability?
We’re a building that, due to our leases and relationships with the teams, has to hold April 15-June 15 for playoffs. If an act wants to play in that time frame, we’ll either go to the teams and leagues and get it carved out or say, ‘Listen, we’ll bonus you X amount of money to route into our building during that time and, knowing we won’t have playoff games on successive nights, we’ll give you a bigger bonus if we have to move you to the next night.’ That’s worked at least twice for us — Wiz Khalifa and Alicia Keys. The act and the timeframe determines how big the bonuses are.
For other arena managers in highly competitive markets, what is the biggest lesson you’ve learned that can apply to their situations?
Don’t be beholden to any kind of rate card. You need to figure out what works for your venue and your market and let people know you’re open for business. In this day and age, with all the competition out there, the artists, agents and managers are all talking on any given day. Our philosophy is, make sure they know what our deals are. If you route into Staples Center, this is your bonus, this is your rebate, this is your hotel room, these are your media and digital assets. We’ll put it in writing for them. If you choose not to play us, we hope the venue you do choose gives you at least as good a deal if not better. We have no problem being leveraged. We offer more than anyone else does out there.
What kind of year was 2014?
2014 was a very good year, with 30 concerts, on the heels of a phenomenal 2013 when we had 53 concerts. When we first opened, 25-30 concerts was a good year. Two things hit the market last year — it was a great stadium-show year, that takes content out of arenas, and there are lots of festivals. We’re not just competing with other arenas in the marketplace.
We continue to bundle our assets. We have a tremendous media asset package, including LED throughout our entire L.A. Live campus, participation by two hotels (now four hotels we use), participation by our 20 restaurants and a tremendous social media program on Facebook and Twitter. We can put all that together and bundle it with our teams. We value that media package at over $200,000 a month when we’re promoting a show and we give that to the artist, promoter, manager or agent for free. We believe this building sells more tickets than any other building in Southern California.
What is a prime example of that strategy as a booking success story?
One of the biggest things for 2015 is Motley Crue’s New Year’s Eve show (Dec. 28-31). We just went on sale for their third show here. Motley Crue was looking for a destination venue for their New Year’s Eve Show. It’s a great night out on New Year’s Eve with L.A. Live, four hotels on campus, 20 restaurants, and various other clubs.
How does that look, exactly; what do the restaurants do?
We cross promote with the restaurants – check stuffers, table tops — and brand the show in and around a campus that could have 25,000 or 30,000 people on any given night. We have the ability to put things in all the hotel rooms and upcoming shows are featured prominently on Channel 71 of the Ritz JW Marriott. We’re now partnered with the two other hotels across the street from L.A. Live, Courtyard by Marriott and Marriott Residences, so we’re now in their rooms as part of their marketing package as it relates to selling shows.
We offer bands coming to Staples Center all those media assets, plus we’ll offer the artists hotel rooms on campus if they’re doing an extended stay here. We have what we call a marketing trade bucket, with outdoor billboards, bus bench back wraps, bus wraps and additional advertising in major publications here, as well as digital assets. We have the ability to throw that into the mix. And the final piece is in-game promotions with our teams. We announced the Motley Crue shows with in-game promotions with the Clippers.
So you’re optimistic about 2015?
It’s going to be a very good year. We have, right now, 30 shows in the books, including five Taylor Swifts. We have our BET X Fest [June 25-28] which gives us three huge nights of programming. It’s all culminating at Nokia Theatre with the BET Awards and includes a fan fest in the convention center. Managing the Los Angeles Convention Center as well, we have the ability to promote over there using our assets and working with our partner, assisting the Fan Fests and promoting big citywides.
Does having professional sports teams give you an edge over a music-only venue?
We have three major league teams, two National Basketball Association and one National Hockey League, which do 123 nights a year. That’s 20,000 people a night that will be in our building, on our campus, able to see what events are coming here. And based on our partnerships and relationships, they allow us to cross promote to give away tickets, run spots on our scoreboards, and put spots on SCTV throughout the building.
How do you get the word out?
We determined when other competition opened in the marketplace, we needed to break the mold of ‘here’s our rate card, play us.’ We will sit down with the promoter, the agent, and the manager and we will discuss what we can do for you. If we have the phone numbers for the artists, we’ll pitch to them as well. We will talk to everybody we can and we’ll let everyone know we’re talking to everybody.
How often are you talking directly to the acts?
Not enough. We have the opportunity because we do quite a few awards shows — Grammys, American Music Awards, MTV Movie Awards, MTV Video Music Awards, the People’s Choice. In the dressing rooms, our message to these artists and the gifts we provide them say we hope you have a great time here, let us know what we can do for you on your tours.
What is an example of a deal where you’ve gone directly to the artist?
We haven’t had the opportunity to talk directly to the artist to cut a deal. We have had the opportunity during awards shows to introduce ourselves to the artists and hope that they choose us when they do tour.
What impact has the new competition had on your bottom line?
Our bottom line has not been drastically effected yet because, obviously, we have four sports teams, 150 sold out suites, an additional 18 suites we sell on a nightly basis that sell out, and tremendous relationships with our Global Partnership Division that bring a tremendous amount of sponsorship revenue to the building. That’s another thing we bring to the table — our Global Partnership Division can bring in sponsorship deals or help with sponsors. Because of our real estate, we can do quite a few fanfests with sponsorship opportunities on Nokia Plaza or Chick Hearn Court, to make it more of an overall destination event.
Will multiples become mini-festivals?
They can. We’re trying to figure out what we’re going to do with Taylor Swift for five shows in August. She will break her own record, playing this venue 16 times. We’re talking with Louis Messina about how we can Taylor-Swift-ize our campus.
Contact: (213) 742-7255