SBJ/June 16 - 22, 2003/This Weeks Issue
Global, AEG strike Kemper deal
Published June 16, 2003
Facility management firm Global Spectrum teamed with Anschutz Entertainment Group to win Kemper Arena in Kansas City as a new client.
Global Spectrum is negotiating five-year contracts for Kemper and for the Fargodome in North Dakota that are expected to take effect July 1, said Global Spectrum Senior Vice President Frank Russo. Global Spectrum, part of Comcast-Spectacor in Philadelphia, is also completing a deal at the Augusta-Richmond County (Ga.) Civic Center.
The Kemper Arena in Kansas City now has one sports tenant, the MISL Comets.
The Kemper Arena arrangement involves a partnership with AEG of Los Angeles and the facility's primary tenant, the American Royal horse show. Russo said that trifecta could result in Anschutz and Global Spectrum's parent company, Comcast-Spectacor, bringing their respective NBA and NHL franchises (Sixers and Flyers for Comcast-Spectacor, Lakers and Kings for AEG) to play preseason games in Kansas City.
AEG President Tim Leiweke and Global-Spectrum CEO Peter Luukko formed the initial alliance. Leiweke once served as general manager of a Kansas City indoor soccer team, Russo noted. "He's a household name in that market."
Russo wouldn't speculate on future relationships with AEG, which also brought the strength of national concert promoter Concerts West to the bargaining table.
"This is a unique set of circumstances," Russo said. "They [AEG] have their business plan, and we do ours. This is not the beginning of any formal joint venture."
Leiweke was unavailable for comment. AEG said in a prepared statement that it was working with the city to complete a deal that would make it "the preferred provider of sports programming" for Kemper.
The Global/Anschutz one-two punch knocked out bids from partnerships involving SMG and local businessman Charles Hazley and the city of Kansas City with Centerplate, formerly Volume Services America.
The city had operated Kemper since the arena opened in 1974. Assistant City Manager Rich Noll pointed to Global Spectrum's work with flagship arena First Union Center in Philadelphia and the Carolina Center in Columbia, S.C., as deciding factors. He also noted the enlistment of Anschutz and promotional opportunities with Comcast cable television.
Kemper Arena, which seats 19,500, has one sports tenant, the MISL Comets, but Global/AEG is seeking others, specifically indoor football and the possibility of minor league hockey. The Kansas City Blades were the most recent hockey team in the building, a member of the now defunct International Hockey League. The Big 12 Conference men's and women's basketball tournaments will be played in Kemper in 2005, the men's event returning from two years in Dallas after being played at Kemper from 1997 to 2002.
As much as $20 million could be invested in capital improvements at Kemper over the next three to five years. Projects would include, for the first time in the building's 29-year history, installation of a marquee designating the venue tucked away just west of downtown in an area that once housed the Kansas City stockyards. City officials and developers continue to research the possibility of building a new arena.
The Fargodome, which holds 19,000 and is home to North Dakota State University football, was among the final contracts remaining after concessionaire Aramark acquired Ogden Entertainment's assets for $236 million in 2000. Aramark owns about half of SMG. Most of those facility contracts inherited by Aramark eventually went to SMG.
Paul Johnson, on-site GM since 1995, remains in charge in Fargo. The food operation, formerly controlled by Aramark, is now an in-house entity with Global Spectrum partner Ovations Food Service acting as consultant.
The addition of the 9,000-seat arena in Augusta, home to the ECHL Lynx, translates to 40 management contracts in Global Spectrum's stable. "We have grown some 500 percent in the three years" since Comcast Chairman Ed Snider broke off from SMG to form a new private management firm, Russo said.