Everyone at SMG, a firm that has matured and defined an industry that privately manages publicly-owned venues, from the CEO to the front lines at venues around the world, preaches hospitality and customer and client service, tracing SMG’s genesis to Hyatt Hotels, the epitome of hospitality.
“Our senior management team is comprised of seasoned professionals; their average tenure with the company is 20 years. That expertise, level of professionalism and consistency has allowed us to develop best practices systems and procedures that set us apart,” said Wes Westley, SMG president and CEO.
Those roots and senior management team combined with an organizational structure that creates specialized divisions by type of business — stadiums, arenas and theaters, convention centers, Europe, and food — allows for a customized approach to clients. “It also allowed us to develop a team of specialized professionals for each division,” said Westley.
“The overall growth of the company is what I am most proud of. When I joined, we had fewer than 30 facilities. Today we have 232. This 40th anniversary is a milestone we all celebrate, since most of us have been with SMG for more than half of its existence,” Westley told Venues Today.
Maureen Ginty, EVP, marketing services and human resources, has been with SMG since 1991 – 26 years this month. She joined after Aramark had purchased one-third of the private management company, which was then owned by Hyatt Hotels and Ed Snider of the Philadelphia Flyers and Philadelphia Spectrum.
“I came from a multibillion dollar organization and then they brought Wes down from multibillion-dollar Aramark. The idea was to add a little more structure to the company,” Ginty recalled.
But the trick, and SMG’s success, is to not make it too corporate. “You keep that entrepreneurial spirit. We’ve been able to inject processes and systems and approaches corporations use but in a more entrepreneurial environment and it’s really gelled,” Ginty said.
What Westley did was make SMG a more matrixed organizational structure, Ginty said. “Now it’s flatter. The decision-making is flatter.” Contract management like SMG pursues cannot survive with tier upon tier of management.
“We are close to the action,” Ginty added.
Westley was very instrumental with his vision for SMG, Ginty said of the Marine who became president in 1994 after three years in finance with SMG. “You better accept a lot of personal responsibility. That’s why Marines get stuff done. You better be that type of employee.”
Westley puts the emphasis on customer service. And he never loses track of the numbers. “You’re in business to make money. If we lose track of that, things go wrong. That’s the hard decision-making. Sometimes you’d love to do something for the short-term buzz but, in the long term, it’s not good for the company. It’s like parenting,” Ginty said.
In 2000, SMG purchased Leisure Management International and, soon after, Aramark bought Ogden Entertainment Services and spun the venue management contracts to SMG, of which Aramark was half owner by then. Hyatt and Aramark bought Ed Snider of Comcast Spectacor out in 1998.
When Aramark and Hyatt sold to American Capital in 2007, SMG was able to enter the food business in an aggressive way, bidding on non-management contracts with regularity, a prohibition when that would have been competing with the parent company. The company had always had legacy food contracts through its Hyatt hospitality roots, beginning with Moscone Center, San Francisco, but in 2007, it became a stand-alone division.
Expansion into Europe was a result of acquiring Ogden Entertainment, which had a footprint in Europe, notably with Manchester (U.K.) Arena. Westley immediately saw the need to sell the team, plug the losses and turned the arena around financially. Since, they have added numerous accounts, most recently Shenzhen World Exhibition & Convention Center, and Aberdeen (Scotland) Conference Center, both premier exhibition centers. Westley sees considerable growth potential internationally.
Another highlight is growth into management of National Football League (NFL) stadiums, a lot of that to EVP Doug Thornton’s credit. Thornton started his career with SMG as GM of the Louisiana Superdome, New Orleans, now Mercedes-Benz Superdome.
Winning the Chicago Park District’s iconic, historic venue, Soldier Field, in 1999, two years before the renovation, was a highlight in SMG’s growth for Thornton. “It was a big market and historic stadium. The Philadelphia Convention Center was another big one,” Thornton said.
In 2015, US Bank Stadium, Minneapolis, the first NFL stadium that was RFP’d within in a 10-year stretch, was awarded to SMG.
Thornton never tires of the conversations about having a third party run an NFL stadium and, with six such accounts, he has benchmarks and best practices to prove his point, but those are always sweet wins.
“The reason we were hired [in Minneapolis] was to manage the bottom line, create value, create utilization and community involvement,” Thornton said. Built with tax money, part of the thesis of these big stadiums is to make them open to the people.
On the theater side of the equation, management of The Greek, Los Angeles, was a big one. “It’s an iconic facility that everyone knows, like the Superdome,” Thornton said. “It gave us the opportunity to have SMG recognized in the L.A. market. We have a great relationship with the LA Parks and Recreation District. Last year, we returned $6.5 million of net income to the district, about $3 million more than they budgeted for.”
Size matters, but with the Greek, location is the differentiator. “Our West Coast footprint is growing,” Thornton said.
LIFTING THE SECONDARIES
Another strong point for SMG is the secondary and tertiary market arenas. Everyone at SMG will mention BOK Center, Tulsa, Okla., as a huge shining star for SMG in the middle markets. “Who would have thought Tulsa would be a hotbed for concerts?” Thornton asks. “I jokingly say we made a market there.”
Influence and connections beget good things and the advent of a National Basketball Association (NBA) team in Oklahoma City’s Chesapeake Energy Center is such a story. The Thunder arrived there after $180 million in renovations at the arena which first hosted NBA basketball when the team playing at Smoothie King Center, New Orleans, had to relocate after Hurricane Katrina. “That was a game changer,” Thornton said. “We already had the venue, we got a team. I remind the guys in OC of this all the time.”
Denny Sanford Premier Center, Sioux Falls, S.D., is much like Tulsa for SMG. “No one would have thought Sioux Falls would be a hotbed of concerts,” Thornton said. “They did 23 shows in that market the first year.”
It helped that SMG was involved in the design of the building, making it operationally fit for the 150,000-pounds of rigging the big shows bring. Michael Godoy, SMG VP of operations, helped the designers design the rigging grid. “We have a Facility Development Services Group Michael heads up that establishes operational best practices and consults on early stage projects like this,” Thornton said.
Pinnacle Bank Arena, Lincoln, Neb., was another venue where SMG got in early. “Two great buildings, two good examples, very successful markets,” Thornton said.
MORE THAN A BOX WITH DOCKS
Gregg Caren, EVP, convention centers, is in his 19th year with SMG. When he joined SMG in 1998, the company had just 24 convention centers.
His original role was transitioning new convention center accounts, like the David L. Lawrence Center, Pittsburgh. “My genetics are sales and marketing. I was able to create a brand recognized by our event planners, associations and corporate meeting planners and trade show executives, CVBs and DMOs. We partner with about 60,” Caren said.
Today, SMG manages 75 centers totaling 15.5 million sq. ft. of rentable exhibit space, Caren said. Half of my job is business development and half is national sales, filling the venues we operate.”
For years, Caren would say there are plenty of convention centers that will probably never privatize, McCormick Place, Chicago, for example and, even before that, Cobo Convention Center, Detroit. Cobo privatized at the end of 2010, marking the first 722,000-gross-sq.-ft. exhibit space center to do so. “We managed venues larger, but those had expanded, nothing came on board that big,” Caren said.
Detroit was a bad scene at that time, Caren remembered. The state took over Cobo Center and created Detroit Regional Convention Center Authority that spent two years looking at it, committed money to redevelop the venue and looked at management options. “That was a game changer because it set a benchmark that big cities can and should be looking at this option,” Caren said.
Lo and behold, McCormick Place followed suite in 2011, though for a different reason. “They didn’t need fixing per se like Detroit did. McCormick Place had legislation that was going to change things like labor charges and pricing for food and beverage. Chicago went to private management to help guarantee the end users it was really changing,” Caren said.
Winning the Pennsylvania Convention Center in 2013 created a trifecta of major market venues for SMG.
“At the end of the day, our true growth will continue to be in smaller and midsize venues, which in reality need more of our attention and help because they have more limited resources,” Caren said. Markets like Branson, Mo., and Tucson, Ariz., and Pembroke Pines Civic Center in Ft. Lauderdale, Fla., now called Charles F. Dodge City Center, which opened in the last month, are key to SMG’s convention center business.
“Whenever I talk to groups or cities or clients, I remind everyone it doesn’t matter how big or small, at the end of the day, the venue is one of the biggest investments a city makes. Size doesn’t matter,” Caren said.
CONTENT IS KING
Marquee events are a kick for anyone in the venue business. In 2016, for example, SMG’s convention centers hosted the Democratic National Convention delegates at the Pennsylvania Convention Center and the Republican National Convention delegates at Huntington Center, Cleveland. The Pope showed up in Philadelphia as well, part of the World Meeting of Families, held at Pennsylvania Convention Center.
Gratifying events, in Caren’s book, include the revival of the North American International Auto Show in Detroit. In 2011, it was a pretty somber event, he said.
Hosting the first Super Bowl after 9/11, 2002, at Louisiana Superdome, New Orleans, is forever in Thornton’s mind. SMG worked with NFL, the Secret Service and the FBI to host the first event designated a National Special Security event by the President. “Those come often now. That event went off without any incidents,” Thornton said. “As [NFL Commissioner Paul] Tagliabue said, we redefined Super Bowl that year.”
Hurricane Katrina in August 2005, which destroyed the Superdome and parts of the city of New Orleans among other devastation, was another defining moment in SMG’s history and expertise. They led an industry in recovery and preparation for disaster through lessons learned there. It was shut down for a year before a symbolic and triumphant rebirth. “The company was very proud of that moment,” Thornton said.
Four decades is a long time. Growth notwithstanding, SMG is most proud of its heritage accounts. “We have a 92 percent retention rate,” Ginty said. “That’s amazing. Don’t lose sight of your buildings. We have high tech approaches, but a very high touch approach, too.”
What are the big wins in Ginty’s opinion? “We just like winning,” Ginty said. “It might be nice if this was a little harder, but you don’t get points for a harder win, the question is did you win? It all impacts our future.”