Tuesday, June 28, 2022

City approves 10-year Live Nation management deal at Greenfield Lake

The Wilmington Strong Hurricane Florence Relief Concert at the Greenfield Lake Amphitheater on Saturday night. (Port City Daily photo/Mark Darrough)
The Wilmington Strong Hurricane Florence Relief Concert at the Greenfield Lake Amphitheater several weeks after the hurricane struck the region. (Port City Daily photo/Mark Darrough)

WILMINGTON — Live Nation Worldwide will soon manage concert bookings at the city-owned Hugh Morton Amphitheater for the next 10 years.

Wilmington City Council approved the venue management contract 6-1 Tuesday, after delaying action on the item in August to address questions and legal concerns.

Related: Live Nation management deal for Greenfield Lake Amphitheater postponed to address questions

As part of the deal, Live Nation will pay the city $2 per ticket sold, $1,500 per show, and $40,000 in rent annually beginning next year. The Los Angeles-based booking company also will invest $250,000 in maintenance expenses over the 10-year contract term and $500,000 in equipment improvements, with the first half of improvements completed within the first 18 months and the second half by 2026.

In return, Live Nation will gain the exclusive right to book acts, manage the facility, and oversee concessions at Hugh Morton Amphitheater. However, it left open the option in its city contract for outside promoters and nonprofits to schedule shows by renting the facility through the firm; AEG Presents’ proposal was an entirely exclusive contract, with no ability for competing promoters to book shows.

Outside the pandemic, the city earned $431,000 in revenue, netting $91,500 in profit in fiscal year 2019 through amphitheater operations after accounting for expenses, according to city records.

The number of events at Hugh Morton Amphitheater has tripled since 2012, with 64 held last year, according to a city presentation Tuesday. Attendance over this time frame increased fivefold, bringing in 57,600 attendees.

“We were underprepared to deal with that,” Amy Beatty, city’s director of community services, told council of the recent surge in interest. “So we feel like we’ve been flying by the seat of our pants a bit and have gotten really lucky.”

Because the city lacks the expertise and dedicated staff to handle operations at the venue, it turned to Live Nation in 2018 to see if it was interested in overseeing its management.

Later on, the city initiated a formal request for proposal process, attracting Live Nation and AEG Presents — the two top-ranking management firms in the nation.

Live Nation earned the city’s preference due to its heavy presence already booking shows at the venue over the past two years compared to AEG Presents, which did not make a site visit prior to submitting its proposal, according to Beatty.

The national interest spurred skepticism from many who worried the firms would reduce the venue’s local charm and hike concession and ticket prices. Tuesday, Beatty challenged those uncomfortable with Live Nation’s international reach to view its interest in the local venue as a sign of success. In 2008, the city invested $1.8 million to renovated the 1960s-era amphitheater, spurring a positive economic impact and cultural asset the city should be proud of, Beatty said.

The city is already contracted with Live Nation in the public-private $29 million North Waterfront Park project. Construction on the project is well underway, with an expected completion date sometime next year.

Councilman Neil Anderson raised concerns about the permanence of the Live Nation contract at the Greenfield Lake venue and asked city attorney John Joye whether it was something the city could get out of, if necessary. Joye said the firm would have to default in some way and would be given the chance to remedy its mistakes before the city could lawfully cancel the contract. However, if the firm breaks any applicable law (for instance, if it receives an ABC permit violation), the city could break the contract without issue, Joye said.

Live Nation will not be required to book a minimum number of shows but must maintain operations to meet an “industry standard.” The firm will book between 31 and 40 shows each year, and should it seek to book more, can do so only after obtaining written permission from the city manager.

Grant Lyman, Live Nation Carolinas president, told council the firm planned to use Ticketmaster for all of its shows. Mayor Bill Saffo asked whether it was possible to eliminate ticket scalping — the number one issue he said he hears about regarding the venue. “Is there any way to protect us or is it just capitalism run amok?” Saffo asked.

Lyman acknowledged scalping was a problem and explained Ticketmaster has the resources to weed out bots that scour sales for profit.

Councilman Kevin Spears cast the lone vote in opposition to the contract. At the meeting, he did not explain why he opposed the deal but asked how much revenue the venue typically earns the city annually, which Beatty could not immediately answer. At the last council meeting, Spears raised concerns about the continued employment of city staff members as a result of the deal. Tuesday, Beatty explained the city had plans to transfer staff assigned to Hugh Morton Amphitheater to other city projects.

Update: Beatty initially shared an incorrect figure ($5,000) to estimate profits, which were actually $91,500 last fiscal year, according to the city’s RFP for the project.

[Disclosure notice: Live Nation has produced shows with and is a sponsor of 98.3 The Penguin, which is owned by Port City Daily’s parent company Local Daily Media. Neither The Penguin nor Live Nation is involved in Port City Daily’s editorial decisions.]

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