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Tim Leiweke is partnering with Irving Azoff and Dan Griffis.
Photo: COURTESY OF OAK VIEW GROUP
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Tim Leiweke has formed a business venture with concert kingpin Irving Azoff to develop a national platform for delivering events and sponsorships to arenas and stadiums.
Leiweke, former president and CEO of Maple Leaf Sports & Entertainment and before that AEG, has founded the Oak View Group, a partnership with Azoff MSG Entertainment, a division of MSG.
Marketer Dan Griffis, previously a vice president at Target Stores and Chip Ganassi Racing Teams, is the company’s third principal owner. Griffis negotiated Target’s founding partnership at L.A. Live in 2007 during Leiweke’s tenure at AEG, and they have stayed in close contact since that time, Griffis said. Those three individuals are funding the company.
The Los Angeles-based Oak View Group is a holding company for four lines of business: the Arena/Stadium Alliance, a division focused on bringing more events to venues and creating new revenue streams tied to those events; Narrative, the sponsorship component, headed by Griffis; a consulting group advising teams on the sale of naming rights, premium seats and seat licenses; and a venture fund division. The venture fund owns a small piece of the MLS stadium project proposed for South Florida by David Beckham’s investment company, and has made a few other investments to be announced later, Leiweke said.
Less than two weeks into its launch, Oak View Group has oral agreements with Amalie Arena, the Forum, Madison Square Garden, Philips Arena and Prudential Center to bring more events and sponsorship dollars to those facilities. Leiweke is also in talks with several other major league venues. His goal is to work with a set number of 20 buildings, to stay focused and do a good job with those clients. There’s enough interest in the industry that Leiweke thinks it won’t be a problem reaching that number.
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Irving Azoff brings deep relationships with artists.
Photo by: GETTY IMAGES
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“This has been 40 years coming,” Leiweke said. “As you would guess, Irving and I get along pretty well with the arenas. That’s my strength and those are my friends.”
Said Azoff: “Tim and I have wanted to be in business together for years. It’s just [that] our respective billionaire [employers] never cooperated, that we were both hitched to at the time. My relationships with artists merged with his relationships with buildings and team owners — we think it’s a perfect match.”
The strategy behind the alliance and Narrative is to form a national footprint for developing events and advertising for venues, and share the revenue produced from those deals with teams operating buildings. Oak View is targeting venues run by teams rather than those run by third-party management firms.
Typically, arenas and stadiums are on their own for booking concerts and special events. The Oak View Group proposes a different model, in which buildings pay annual fees to one entity in exchange for securing more tour dates. The 10-year-old Gridiron Stadium Network operates under a similar model to help bring summer concerts to NFL facilities.
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GRIFFIS
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In the arena world, the model has been tried before with varying degrees of success. In one case, former Ticketmaster CEO Fred Rosen tried several years ago to form a group of 25 arenas for “block booking” of events, but it never panned out, in large part because of the cost of memberships, sources said. Separately, when the NBA launched the D-League in eight small Southeastern markets in the early 2000s, it struck a deal with the old Clear Channel Entertainment (now Live Nation) to bring concerts to those arenas. Few shows materialized for those venues, however, and the deal fell apart.
Under Oak View Group’s business model, the fees run as high as $400,000 a year, according to sources familiar with Leiweke’s sales pitch. In addition to the prospect of gaining more shows, the venues share revenue from inclusion in Narrative’s national sponsorship program.
Leiweke stressed that his new company is not a concert promoter, but through Azoff’s powerful connections, it will work closely with leading promoters Live Nation and AEG to bring additional content to alliance members. It could include multiple shows by one artist, similar to the Las Vegas residencies of some performers.
“All of us in the industry have failed to take the music side and create an economic platform similar to what we’ve done on the sports side,” Leiweke said. “Whether it be premium, sponsorships, secondary [ticketing], VIP packaging, we do it piecemeal, one at a time. We’ve never done it collectively.
“But arenas do as many nights of music as they do NBA and NHL games. The ability to take the music and build it into a different kind of platform to create different revenue opportunities, shared equally between the music industry and the facility owner and operator, is an idea we absolutely love.”
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Oak View Group’s goal is to work with 20 buildings. It has oral agreements with five so far, including Madison Square Garden and Amalie Arena (below).
Photos by: GETTY IMAGES
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One example is suites. In many big league markets, under existing long-term suite agreements, teams running arenas keep 100 percent of concert ticket revenue for suites and don’t share it with the artist. But that model is slowly changing, Leiweke said. Some arenas are starting to structure suite contracts for which the second show of a multiple-night run is not part of the suite holder’s package. In that case, the suite holder has the right to purchase their suite for that event or have the team sell it to a third party. The team then shares revenue with the act from reselling the suite.
But there is a potential downside. For teams forcing the original suite holder to reach back in their pockets to purchase the suite for another night of, say, Taylor Swift, it could come back to haunt them come renewal time. After all, there’s a reason why teams sell suite packages covering 100 events.
“You’ve got the whipped cream at the top but a lot of dog food at the bottom,” said sports consultant Michael Rowe.
Leiweke feels differently and sees the upside. “It’s thinking outside the box and duplicating what they do in Vegas better than anywhere else, and what we do with our sports teams,” he said. “Music, to me, should be about 40 nights and we should package it that way. Our job is to go in and bring the promoters and the artists and the managers and the facilities all to the table. See the world in all of their eyes and say, ‘If we work together and think this through, there’s an opportunity to maximize the [seating] manifest by working together.’”
For the record, the alliance is not guaranteeing dates, Griffis said. At Amalie Arena, home of the Tampa Bay Lightning, forming a relationship with Leiweke and Azoff and taking advantage of their strong ties to the entertainment industry in Los Angeles was attractive to the NHL team, said Steve Griggs, the Lightning’s CEO. He would not disclose the fees.
“It’s about being associated with Tim and Irving and MSG and Live Nation, and the top arenas in North America,” Griggs said. “It’s not about guarantees. With the alliance, we will figure out new ways to generate revenue with new technology, experiential and social media.”
But other teams feel Oak View Group must have a minimum guarantee in the agreements to establish a return on such a hefty investment.
“It’s an expensive point of entry,” one source said. “For the asking price, there has been a fair amount of pushback from our end. Before we sign up, there must be specific measurements to make an ROI. Or we get to exit [the deal] after a year.”
On the sponsorship side, Narrative officials see potential for a breakthrough by selling national deals in nontraditional categories such as beauty and fashion, fragrance, wellness and sustainability. Griffis, through his experience at Target working with multiple vendors, knows firsthand those companies would love to spend money to reach a live audience in a creative way. But they’ve been unable to do so because nobody has approached them for consolidating their inventory, unlike the beer, soda and automotive categories.
Narrative’s research shows that Madison Square Garden, for example, doesn’t have exclusive sponsors in the fashion/beauty, wellness or technology categories, and signing national deals within the alliance could open up new revenue opportunities for one of the world’s busiest arenas.
“I dealt with all the fashion and beauty brands at Target very closely,” Griffis said. “I know those people and it’s now just a question of going back to them and giving them what we consider to be a more compelling story for why this would be an interesting investment for them. A brand like Revlon wouldn’t go to Nashville today to do a [single] deal because it’s just not the way they think. But if you went to them with 15 or 20 different cities with a significant activation that could happen in each of those buildings … that’s a little more compelling to them.”
Outside of arenas, Narrative will consult on naming rights and premium-seat sales for Beckham’s MLS stadium project, pending site selection and financing, Leiweke said.
Narrative’s marketing staff extends to Jason Gonella, who most recently worked for Van Wagner Sports & Entertainment, the Minnesota Vikings’ sales agency for U.S. Bank Stadium, their new facility opening in 2016. In addition, Narrative hired Andrew Feinberg, previously with Premier Partnerships.
All told, the Oak View Group will have about two dozen full-time employees working across all divisions.
“We have the capital to grow as we see fit,” Leiweke said. “This is a generational company and we will be around a very long time. We’ll be strategic, work hard and spend our money wisely. I’m enthused and excited. We’re going to do some very big things.”
