SBJ/December 5-11, 2011/Facilities

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  • Connections help Target Field finally land its first concert

    Don Muret
    The Minnesota Twins, with a little help from their friends at AEG, snagged the first concert at Target Field after striking out on two attempts.

    The Kenny Chesney-Tim McGraw “Brothers of the Sun” tour stops July 8 in Minneapolis. Angel Stadium of Anaheim is the only other MLB facility booked for the 19-date stadium tour.

    For the Twins, securing Chesney comes six months after Paul McCartney canceled a Sept. 1 show planned for Target Field because of a scheduling conflict on his end, according to Laura Day, the Twins’ senior vice president of business development.

    Kenny Chesney and Tim McGraw will take center stage at Target Field in July.
    Photo by: David Durochik
    “We were very close to finalizing it and making a formal announcement,” Day said.

    In 2010, the year Target Field opened, the Twins had talks with Farm Aid officials about bringing that daylong show to the ballpark this year. More than 35,000 people filled Miller Park for the event’s 25th anniversary in October 2010. The Twins and Farm Aid could not make the dates work, and the 2011 event wound up at Livestrong Sporting Park, Kansas City’s new MLS facility.

    All things considered, the Twins landed in a good spot for their first on-field show. Chesney’s tour producer, Louis Messina, is a partner with AEG Live, McCartney’s tour promoter. AEG Live officials knew Target Field from the McCartney negotiations, Day said.

    “Through our relationship-nurturing with AEG, Louis caught wind about Target Field,” Day said. “I think our [ballpark’s] national reputation helped too.”

    Together, the Twins and The Messina Group/AEG Live identified a date that would work considering the eight- to 10-day window required for setup and teardown. Tour officials’ site visit in September sealed the deal, Day said. The Chesney show falls the week of the All-Star Game.

    Last year, most of Chesney’s 11 stadium shows averaged $4 million to $5 million in gross ticket sales. At Target Field, ticket prices start at $39.25 and top out at $297.75 for the general admission “sandbox” floor closest to the stage.

    While some NFL teams took the financial risk to promote the Chesney concerts, the Twins decided against using that business model. Instead, the club will generate most of its revenue from food concessions, Day said. The fierce competition for shows in the Twin Cities, coupled with concertgoers having fewer discretionary dollars to spend, persuaded the Twins to opt for a more traditional rent deal.

    “We tend to be risk-averse, and this is our first foray into this type of event activity,” Day said. “We need to get more experienced with putting 40,000 in the building for a major concert. It changes the game.”

    The concert is the most high-profile piece of a thriving non-baseball business at Target Field that has generated seven figures in revenue annually, Day said. David Christie, the Twins’ senior manager of facility and event sales, heads a staff of three full-timers and two part-timers booking special events. Together, they have scheduled 600 events at the park over its first two seasons.

    Sixty-five non-baseball events are already on the books for 2012, including 11 weddings at home plate.

    And then there are the tours. The Twins have given 1,900 public and private tours of Target Field since the park opened. Tickets for public tours cost $8 to $17 a person, depending on age.

    Much of the tour business is geared to students. The Twins hired former school teachers and principals to lead the tours, using baseball’s statistics and physics to educate kids in math and science, Day said. The subjects of the tours extend to Target Field’s art displays, environmental stewardship and its architecture.

    “It’s taken off like you wouldn’t believe,” she said.

    HORNETS NEST: A master plan to upgrade New Orleans Arena to meet the needs of the Hornets is starting to take shape in the Big Easy. A group representing the NBA team, arena manager SMG, architect AECOM, two local design firms, and the Louisiana Sports and Exposition District, the building’s owner, recently completed its first meeting to discuss the project.

    “It’s a piece of the puzzle to keep the Hornets in town over the next 10 to 15 years, enticing a new owner as to what the arena can do as far as revenue and freshen it up,” said Paul Griesemer, a principal at AECOM working on the master plan.

    The NBA owns the Hornets after buying the team from George Shinn in 2010. The 12-year-old arena has not been renovated since 2002, the same year Shinn moved the old Charlotte Hornets to town.

    AECOM officials will look to NBA facilities they designed for the Indiana Pacers, Memphis Grizzlies and Charlotte Bobcats, as well as Barclays Center, the New Jersey Nets’ arena opening next fall, to get ideas for how to bring New Orleans Arena up to par with newer buildings, Griesemer said.

    AECOM will use its two sister companies, market research firm Economic Research Associates and cost analyst Davis Langdon, to help determine a revenue model that works with regard to premium amenities, he said.

    In addition, the two local architects, Eskew Dumez Ripple and Manning Architects, will lend their expertise for what makes sense with the improvements. Ray Manning, president and CEO of Manning Architects, was part of the original design team for New Orleans Arena. Eskew Dumez Ripple designers worked with Griesemer to plan the restoration and upgrades to the Mercedes-Benz Superdome as well as Champions Square, the gathering spot outside the Saints’ stadium.
    “They are a key part of finding a solution that will last for the Hornets,” Griesemer said.

    Officials hope to have the master plan study completed by late January and start some of the projects in 2012, pending approval by the Hornets and the Sports and Exposition District.

    Don Muret can be reached at dmuret@sportsbusinessjournal.com. Follow him on Twitter @breakground.

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  • Compass deal lets AEG bring food to the table

    Compass Group’s deal to buy 49 percent of AEG Facilities forges a stronger bond between the world’s largest food service provider and a leading operator of major league venues, but because of their long-standing relationship it’s difficult to tell how much of an effect the purchase will have in the facilities space.

    The deal closed in August, according to the annual report issued by Compass Group PLC, London-based parent of Compass Group North America, but was not announced until Nov. 23. No purchase price was disclosed.

    Compass-owned Levy Restaurants has handled food at AEG’s Staples Center since 1999.
    Photo by: GETTY IMAGES
    It expands a partnership between AEG and Compass-owned Levy Restaurants that began in 1999 at Staples Center, the year the arena opened. Levy operates the arena’s concessions and premium dining and has more than 50 big league food deals. Compass Group, which has owned 100 percent of Levy Restaurants since 2006, reported worldwide revenue of $25 billion this year.

    For AEG Facilities, the Compass deal made sense because many of Levy’s accounts are at NBA and NHL arenas where AEG has an ownership stake, manages the building or books and markets events. Internationally, Compass/Levy runs the food at arenas AEG owns and operates in Berlin, Hamburg and London.

    “This deal is a natural extension of the familiarity our two companies have developed with each other,” said Bob Newman, AEG Facilities’ chief operating officer. “Our paths are crossing in many locations worldwide.” Compass Group North America officials in Charlotte declined to talk about the deal.

    Before the Compass deal, AEG had been the only facility manager without an investment in a concessions firm, sources said. Now it can bring that important aspect of operations to the table.

    That has been the case in Philadelphia where Comcast-Spectacor subsidiaries Global Spectrum and Ovations Food Services compete against AEG and Levy, said Peter Luukko, Comcast-Spectacor’s president and COO. But as Luukko has learned over his career, both with Comcast-Spectacor and with SMG, a firm once co-owned by sports concessionaire Aramark, building operators and food vendors sometimes must take separate paths to grow business.

    “Our model was to create two companies because in certain situations you are offered only the management and are working with other food service companies,” Luukko said.

    “When you are in the facility management business, 99 percent of the time you deal with some form of government,” he said. “In some bids, food and management go together. Most aren’t, and you must follow the bid process.”

    The same principles hold true for AEG Facilities and Compass Group as they pursue new business, Newman said.

    Food consultant Chris Bigelow said, “Levy already serves most of the AEG accounts, but AEG also looks for what is best for their venues on an individual basis and sometimes that means going with another concessionaire such as Sportservice at Target Center.”

    Sources say the deal with Compass Group could also provide AEG with more financial resources to help develop high-profile sports projects such as Farmers Field, the NFL stadium AEG wants to build with private funds next to Staples Center. The stadium’s concessionaire has not been selected, Newman said.

    Industry sources said AEG had conversations with at least one other food service company about buying a minority stake in AEG Facilities before reaching an agreement with Compass Group. Newman would not comment on whether AEG had talks with other concessionaires.

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