Changes in the Summer Concert Season

L. Bird pkeets at
Thu Mar 10 05:19:09 CST 2005


Brown: Promoters halt risky business; fans will benefit

March 5, 2005

When you think of it, it's a stupid way to do business.

Concert promoters book shows by guessing how many tickets they can
sell, then guaranteeing an artist that they'll make X-number of dollars
from that show. The promoter then has to sell enough tickets to cover
that, regardless of how many people really want to see that act.

"The economics of the business are amazingly dumb," says Gary
Bongiovanni, editor of Pollstar magazine. "Show it to an investment
banker and he'd throw you out of the office - 'You want me to risk this
amount of money for that much return? And I have to worry if it rains?'

Ticket prices have spiraled out of control as artists demand higher
guarantees. Every year promoters pledge to say "no" to those acts, but
they never do.

This year might be different.

Clear Channel Entertainment, the nation's largest concert promoter,
owns a number of amphitheaters nationwide (though none in Denver). For
the summer concert season, it has come up with a new plan. No
guarantees up front (or perhaps very small ones), but the artist gets
100 percent of the ticket sales. CCE would make its money by selling
you that 20 cents worth of beer for $6 a cup, parking, food and other

In effect, big amphitheaters are going to work the same way clubs used
to do it. The musician gets the door, the house takes the drink sales.
Or the way a movie theater generally works - the studios get the ticket
proceeds, the theater gets the pumped-up pop-and-popcorn profits.

"The artist community had gotten kind of piggish," Bongiovanni says.
"The whole economics of the concert business are so whacked out. Some
correction has to occur. I hope what (CCE) is trying works. It shifts
the burden to the artist to actually sell tickets."

The result, he notes, would be "there may be a new sense of what's
normal in terms of deals for amphitheaters. Clear Channel has the
ability to set that."

Of course, many would say Clear Channel caused the current problem.
When SFX ate up smaller promoters and eventually was bought by the
Clear Channel radio company, it had a practice of overpaying acts to
force competitors out of the market. It didn't work. It just got acts
used to big paydays and racked up debt.

But as the nation's dominant promoter, CCE can theoretically help put
the brakes on that.

"Some of this is the reaction to the promoter doing shows where you
sell 85 percent of the tickets and still lose money. Everyone else is
happy except you," Bongiovanni notes.

If it becomes the artist's responsibility to fill the venue with fans
who want to have a good time at a reasonable price, "They'll be much
more sensitive to the ticket price," Bongiovanni says. "The main income
stream for any of these artists comes from touring. We're shifting some
of the onus to the artists themselves to have the popularity level to
sell the tickets. There's some sense of fairness and balance. Maybe
it's about time we started offering the public something they value."

Gee, what a concept.

You mean for an artist, a concert can be something other than the
greatest hits, trotted out with faux enthusiasm, for what few die-hard
fans you have left willing to pay triple-digits to spend 90 minutes in
your presence?

You mean you put some excitement and entertainment back into the live

You mean The Who might actually change their set list this year?

There is speculation that this will only make things worse - that with
no guarantees from Clear Channel, HOB and the Anschutz Entertainment
Group/ Concerts West will step up to steal away shows. Bongiovanni
thinks not.

"If Clear Channel is not going to write checks, I don't know that House
of Blues is gonna write big checks," Bongiovanni notes. "AEG is not a
presence at outdoor amphitheatres. I don't know who else is going to
step up and write a check to the artists."

Though HOB controls the Coors Amphitheatre here, it could benefit too.
If Clear Channel has a national tour but has to give the Denver date to
HOB (as occasionally happens), the tone and ticket price already will
have been set.

The local head of House of Blues says he applauds Clear Channel's
attempts to bring ticket prices back into line, but says they're not
doing it here.

"In this market, we're seeing high guarantees from Clear Channel. And
high guarantees drive ticket prices," says senior vice president Jim
McCue of House of Blues. "We're not seeing any lower guarantees from
our competitors."

"I hate to give a concert-promoting 101 lesson . . . but the bands and
their agents set the prices in almost all cases. To blame Clear Channel
is an easy way out for our competition," says local CCE vice president
Chuck Morris of Bill Graham Presents/Chuck Morris Presents.

In some places it can't work. Red Rocks is owned by the city and thus
any promoter would have to take part of the gate to do a show up there.

Some shows are still going to be outrageously priced. Paul McCartney
tickets will be in the triple digits when he's here in November. The
Stones aren't going to back down if their tour comes together.

And some will charge what the market will bear. Motley Crue tickets
went on sale today at nearly $80 a ticket, but - amazingly - that tour
is doing well across the country.

In other markets Clear Channel has gone to $20 lawn seats, as has Coors
Amphitheatre here in many cases.

"We have several offers out to artists with $20 or lower lawn seats,"
McCue says.

More change is coming at the end of June when the Paramount Theatre's
lease with HOB ends and full control passes to Stan Kroenke, owner of
the Pepsi Center who has worked closely in the past with Clear Channel.

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