PAUL SAMUELS is the exec VP global partnerships for AEG. Prior to joining the agency, he served as head of sponsorship for U.K. telecom O2, where he helped secured jersey sponsorship deals with Arsenal and the England rugby team in the early '00s. He went on to negotiate O2's deal to become the naming sponsor of London's Millennium Dome in '05. After turning a "white elephant" into an arena voted best music venue in the world 10 years running, Samuels eventually joined AEG, by way of the Bonham Group, and in February negotiated the renewal of the O2 Arena deal. The agreement, reported to be worth about $157M, extends AEG's relationship with O2 through '27. Samuels spoke with SBD Global about the original Millennium Dome deal, the renewal and AEG's European expansion.
On the Millennium Dome and the original deal with AEG ...
Paul Samuels: It was a structure built by the British government for the millennium. In reality, it was a white elephant. After a year, it was going to close and sat empty for two or three years and no one knew what was going to happen to this structure. And then AEG came along and bought the structure and decided to build a music venue there. So, I got a call from AEG asking if I’d be interested in sponsoring the Millennium Dome and I said, "No thank you." ... At the time, no one knew who AEG were. So, I went on a trip they organized to Vegas and Los Angeles to understand the properties AEG had -- including what was the Home Depot Center, now the Stub Hub Center, the Staples Center and saw a great opportunity. I realized this was something we, at O2, should look at. I came back from my trip and went to my bosses at O2 saying we should sponsor the Millennium Dome, and was turned down on numerous occasions. But, I convinced them to spend a bit of money on some evaluation work. ... It came out that this thing was value for money and it would be a good opportunity. I went back to O2 and convinced them, finally, that this is the thing we should be doing. And I got the go-ahead to try and negotiate a deal with AEG. After the deal was done, we created, in 2005, what was the O2. It didn’t open until 2007, so we had two years of people laughing at us, thinking this thing will never work, why the hell would we invest our money in that?
On the negotiations ...
Samuels: Once we got the green light, it was about six months of negotiations originally. It was a parallel process, actually. Negotiating with AEG, which probably, I could argue, was the easy bit. Apart from getting the green light to go and negotiate a deal, we still had to get the approval sign-off from the Plc Board of O2, and they weren’t so convinced. ... It went to the official board to get voted on, and everyone said, "No." I got the reasons why they said no, because the Millennium Dome was such a white elephant -- it was such a lot of money to put your name to for a 10-year contract, it was a huge risk. What we didn’t know at the time was that O2 was going to be bought by Telefónica. So obviously, some of these board members knew that and were nervous about having a white elephant on their books. But 10 years on, the O2’s been voted best music venue in the world every year for the last 10 years. We’ve had 60 million people through the door so far and we have 200 shows a year. ... We knew it’d be good, we just didn’t realize it’d be this good. No one expected it to be as big and popular as it has been on a global reach.
On the renewal process ...
Samuels: You should never take anything for granted, but we had two partners, AEG and O2, who both wanted to continue to work together if we could make it work. ... As long as we could come together as good partners and both get what we needed, it was going to work. Fortunately, that was the case. Both parties realized the value of each other, and it was a very simple process. It didn’t take very long, because we know each other inside and out.
On the highlights of the new deal ...
Samuels: We’ve got some enhanced assets. We’ve increased some of the tickets O2 gets for every show, making more tickets available to O2 customers. We’re going to improve some of the lounges. Also, O2 invested in Wi-Fi, so we have full Wi-Fi capabilities and we’re looking at how we use that technology to enhance the consumer engagement and experience while in the building.
On the significance of a 10-year deal ...
Samuels: It is very unusual in this market, and in any particular market, to get long-term sponsorship deals out of companies, because companies don’t know what they’re going to be doing in 10 years. When we did the original O2 deal, the iPhone wasn’t even developed and Facebook didn’t exist. ... However, when you’re talking about naming rights, you want to make sure you’ve got a long-term commitment. You don’t want to be changing your name around every two or three years. The way it worked the first time around, it was a long-term commitment. And that was key for us at AEG. Moving forward, it is the exactly the same.
On the Toshiba-AEG partnership ...
Samuels: Working with partners like Toshiba, Cisco, etc., we try to do deals, when possible, where we can do one deal across our portfolio of venues. It works really well for us. The Toshiba deal mainly focused on L.A. and Berlin. In Berlin, we’re building an entertainment district that will be very digitally focused. So we needed to work with a partner, like Toshiba, that can deliver the type of technology that we needed. We’re delighted to have Toshiba on board in Europe, particularly in Berlin.
On AEG's deal with esports event promoter ESL ...
Samuels: Our first event will be in Hamburg this year. So we’re out in the market working and looking for partners to join us. What I love about ESL, now I’m not a gamer personally, but I’m inspired by how it has changed the industry -- how people are filling out arenas around the world watching people play video games, at the same time millions of people are watching online. To create events out of this thing that was once people playing in their bedrooms with joy sticks ... mirrors what we’re about. Live experiences are important. ... It’s a lot of money, and the fact that you have franchises that might have a football team or a basketball team and now that same franchise is buying into creating a gaming team. If you said that 10 years ago, you’d be laughed at.
On AEG's European expansion ...
Samuels: Twelve years ago when the O2 deal was done, and when it opened in ’07, the O2 was the only venue we had in Europe. Since then, taking the U.K. alone, we have the O2, the SSE Arena, Wembley, we have a massive festival we’ve put on at Hyde Park in London called British Summer Time, we have a smaller theater called the Eventim Apollo, we have a relationship where we deal with commercial activity for the SSE Hydro in Glasgow. So in the U.K. we’ve gone from just one venue to this huge expansion. That expansion has now gone further across Europe as well. We have two major venues in Germany, one in Hamburg, one in Berlin -- the one in Berlin is the Mercedes-Benz Arena and we’re under construction right now to build an entertainment district with restaurants, bars, cinema and another music theater which will all be open in 2018. In Sweden, we have two great venues, the Tele2 and the Ericsson Globe. In Paris, we have the AccorHotels Arena.
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