This photo was first posted on Twitter to show The Greek in Los Angeles is not just a venue, it’s people. (Photo by Randall Michelson)
Since it was revealed Sept. 26 that Live Nation was about to be recommended to take over management of the Greek Theatre, Los Angeles, late next year, current management Nederlander Concerts and its partner in the bid, AEG, have been waging a social as well as financial campaign to reverse that plan.
There was immediate victory in that the Los Angeles Department of Recreation and Parks commission, which was set to endorse Live Nation Oct. 1, instead postponed any decision to Oct. 9. The Nederlander group is hoping that Thursday the decision is delayed again, and has been working diligently vetting the proposals for their 10-minute rebuttal slot as well as generating public support in all ways web-related for retaining the 39-year management team currently in place.
The web campaign is themed “We are the Greek,” and began with a posting on Twitter showing the staff on stage at the historic venue, suggesting this is not just a venue, it’s people. On Oct. 6, Nederlander and AEG Live launched a website, wearethegreek.com and engaged change.org to circulate a petition urging the commission to reconsider the bids and retain Nederlander and AEG as Greek manager. Vanessa Kromer, director of public relations for Nederlander Concerts, said the petition gathered 12,000 signatures the first day.
Rena Wasserman, GM of the Greek Theatre, acknowledged that the “era we live in is different than it was in 2000,” when the Greek management contract last came up for renewal. “Social media is a wonderful thing in some ways, for support and comfort and to clarify for us we’re right. We put our heart and soul and passion in our company and it’s heartwarming to have that affirmed even if at the end of the day, it matters little. Ultimately, as important as public support is, it is the merits of the proposals we stand on.”
When word of the proposed change was published locally, public reaction was immediate and intense, Kromer said. From neighbors to vendors to clients, everyone associated with The Greek was getting phone calls and letters and posts. “We all figured we needed to do something,” she said, so they collaborated with AEG to develop a “place to direct people.”
Like the “Save the Fox” campaign launched in Atlanta 40 years ago (read more in our October issue of Venues Today), this grassroots effort seeks public support but, unlike 40 years ago, it was instantaneous and internet oriented. Why not use the tools at hand, Kromer said.
Still, it is a business decision, not an emotional one, and Kromer addressed that also. They have documented what they say is proof their bid is financially more attractive than Live Nation’s.
They have circulated a document highlighting their interpretation of the financial packages that make Nederlander/AEG the more attractive proposal, including:
• $6.25 million more minimum guaranteed rent to the city over 10 years than what Live Nation offers.
• $17.5 million more minimum guaranteed rent to the city than Live Nation’s offer if the contract is extended to 20 years.
• Minimum guaranteed rent escalating from $3.5 million to $4.25 million annually, while Live Nation’s rent stays at $3 million for 20 years.
* 10% vs. 8% rent when the venue performs well, potentially $20 million more revenue to the city than from Live Nation.
Wasserman also pointed out that some comparisons of the proposals put a 20-year commitment from Live Nation against a 10-year proposal from Nederlander/AEG. The bid was for 10 years with two five-year options. When those options come up, you go back to the table, Wasserman said. No one knows now what that second 10 years should look like.
On the public side, they are touting their community plan as consumer friendly, claiming Live Nation’s is based on increasing the price of tickets, and that their renovation plan is historically sensitive and includes the same revenue-generating improvements as Live Nation’s does.
Nederlander is using the web campaign to generate ‘crowdbacking’ for their business — not funding, not staff sourcing, just support — touting the fact they are a family owned, local business.
“We are extremely passionate about The Greek and the managing of it,” Kromer said. She did not have an estimate of the cost of the “We are The Greek” campaign in cash and kind yet. Only time will tell if it’s effective, but it is engaging the staff and the community in what would normally be a business decision at the high management level.
Even more costly and time consuming was the RFP process. Wasserman said the Nederlander/AEG proposal was 2,400 pages and that Live Nation’s was 1,000 pages. The five consultants who vetted the proposals reported spending 170 collective hours vetting the proposals, a mere 34 hours per person. The RFP went out June 4, proposals were submitted Aug. 12, candidates were interviewed for two hours Aug. 26 and, on Sept. 26, the report recommending Live Nation was made public.
She has been analyzing and comparing the proposals for rebuttal at the Oct. 9 meeting (each firm will be given 10 minutes, she said) and considers 34 hours minimal and insufficient for the task at hand. Bids cannot be changed and Wasserman didn’t think they should be. “Ours is a great deal for the city of Los Angeles,” she said.
Of five members of the commission, one is absent and one recused herself, so the three remaining must be unanimous on any decision for a majority rule.
Last year, the theater brought in nearly $23 million in gross receipts, yielding $1.6 million in revenue-sharing payments for the city, according to the Los Angeles Department of Recreation and Parks. Nederlander operated last year under an extended contract, which was originally up in 2011 but was extended one more and then three more years while the RFP process took place. It expires in October 2015 unless it is extended again as the debate rages on.
"The scores were not even close at all," according to Victor De la Cruz, an attorney representing Live Nation, who spoke to the L.A. Times."You have a 40-year incumbent who does not want to go ... and we understand that the community has valid concerns about a new operator," De la Cruz said. However, he added, "we intend to prove them wrong."
Interviewed for this story: Rena Wasserman, (323) 644-5000; Vanessa Kromer, (323) 817-6108