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Executive Profile: VenuWorks’ Steve Peters
In 15 years, Steve Peters has turned a facility management company from a desk and a fax machine in his basement to
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Like almost everybody else on the planet, it wasn’t Peters’ original life goal. Peters entered the University of Iowa as a theatre major.
But one thing led to another and he exited with an MFA in arts and theatre management. He landed the GM position in 1976 for the restored Five Flags Center in Dubuque. After working at Iowa State University as an associate director, he became director of the four buildings comprising the Iowa State Center. The complex shifted to private management with Ogden Entertainment in 1988 and Peters, who helped bring acts like
Ogden Entertainment was a new venture of Ogden Food Service back when privatized facility management was a developing business. Along with chief Doug Logan and his coworkers, Peters tried to find his way in this field, eventually becoming its VP for municipal and university accounts from Fairbanks, Alaska, to Pensacola, Fla.
But, just as the movie “Jerry Maguire” came out in 1996, Peters created his own memo – err, mission statement.
“I had my own ideas about how to do private management,” Peters says. “Mine were the smaller accounts. I went to New York and pitched Ogden on the idea that they really didn’t seem to notice or care about the smaller markets, so why wouldn’t they sell those to me? I’d find some backers and we’d be able to maintain those.
“They kind of voted me off the island.”
So Peters packed his papers and his goldfish and began Compass Facility Management.
“I chose Compass because I had been reading Stephen Covey,” he says. “He talked about managing by the compass and not by the time clock. It was a neat saying but it had some real value to it. We would be a private company not tied to looking at quarterly financial returns and stockholder profits.”
First, he needed a computer.
“I knew somebody who knew somebody who was a computer person. She took a vacation day and I think I paid her $100 to teach me how to use the new computer I bought. At the end of the day she said, ‘I don’t know anything about this new Internet thing they’re all talking about.’”
So, in Ames, Iowa, with a desk, a computer, a printer and an assistant, Peters looked around and landed his company’s first job in Dodge City, Kan. The city wanted a feasibility study for a potential arena. Fast forward and the city just opened the venue – the
“It’s come full circle,” he said. “We just opened it last month.”
The actual first account was in Minnesota.
“We took one away from Ogden, the Mankato Civic Center. It’s got a different name now,
Compass changed its name to VenuWorks in 2007. The company became big enough to draw the attention of lawyers from another Compass, one of the largest food and beverage companies in the world, which owns U.S. subsidiaries Levy and Thompson Hospitality, among others.
“We said, ‘Well, they have a lot more money than we do’ and we backed up,” Peters said. “We started looking around, did a lot of research and came up with VenuWorks. That’s done us pretty well.”
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Giving a pitch to a city council of a big city is one thing but when, say, Brookings, S.D., sends out a Request For Proposals, it’s probably another. We’ll assume they ask you to bring
That’s very much true. What we always try to do – and sometimes this gets us kicked out of the running very fast – is be honest about our perceptions of the marketplace. They could be sitting there with a feasibility study that somebody had just done for them, telling them they could do 20 concerts a year of the likes of Def Leppard and we wouldn’t do that. I guess some people are willing to promise anything and just hope for the best, but you get into trouble doing that. You can’t live up to those expectations.
One of the hallmarks of what we did when we started out was we would give them a realistic level of expectations. And if we set realistic expectations in the beginning, we stood a good chance of being able to succeed.
How did you get more accounts? Word-of-mouth?
We were always fortunate enough to have clients that would speak well of us and we just built our relationship base. Then we always did a good job for the shows coming in so if you ask a promoter or a road manager, “Is it a good day when you hit the back door of a VenuWorks building?” we always want them to say, “Yes. They know what they’re doing. They’ve got their act together.”
What sets you apart from your competitors?
We’ve got a lower overhead. Our offices are in Ames, Iowa, not in Philadelphia or L.A.
We’ve always gone to our strengths, which are the mid-sized rooms and smaller markets. We’re able to bring a lower overhead to the facility because, frankly, we invest an awful lot in the people who help run the facilities. So where one of our competitors might say you need a staff of 15 people here, we will say we can do it with a staff of nine.
In most of these facilities, we’re running them on behalf of some kind of governmental entity or maybe a nonprofit. The bottom line is theirs. If we make a profit we may get an extra bonus but, win or lose, the profit or loss belongs to the owner. So they’re very concerned about how much money it’s going to take to operate the facility.
We could always operate the facility for less than what our competitors would. And we work particularly hard to be able to do that.
Is your model similar to that of other companies in that you’ll take an experienced GM and shift him/her to another market to open a building?
When we can. One of the things about the smaller markets is that the people who work there tend to get pretty connected to the community and really don’t want to move. But we have done some of that and, when we can, we certainly try. I would suppose we have, of those 17 markets, probably 3-5 that have moved up like that.
How many new arenas have you opened?
Probably about 60-70 percent of the venues we manage we’ve opened.
What’s your strategy for opening a venue?
It’s a ramp-up and it depends on how much time we have but you hope for about a year.
First off there are design considerations. We’re almost always in there after the design work is done but we try to work with the architect and the design team to go through everything in detail. Sometimes there are gaps in equipment that nobody’s budgeted for, or a door that would be better moved 20 feet down the wall for security or to line up with a loading dock.
You think they’d get set at the beginning but you’re constantly dealing with those questions through the construction phase. Then there’s the sales effort and that has to start early on, and you’re trying to sell naming rights and suites and pouring rights and sponsorships and advertising. If it’s a conference center, you’re trying to get people to book the building and you’re trying to book the arenas, too, for that matter.
You’re hiring your marketing people, you determine the equipment needs for box office and so forth. The box office needs to be up and running a good 90-120 days before you open so you can start your advance sales.
Does your staff get promoted from inside VenuWorks or does, say, a GM come from outside the company?
Our GMs generally get brought into the market. It’s rare you go into a market and there’s somebody you can hire to be a GM. We put our GMs through what we call “VenuWorks 101” so they spend some time with us before they report to the venue, if they’re new to our company.
They may know how to run an arena or a convention center but they don’t know our methodology. So we’ll bring them to Iowa and then we’ll take them to another couple of our venues so they see it first hand before we ever let them report to work. For people we bring up through the ranks, we also expose them to that same kind of training but it’s less significant.
Frankly, for the other staff positions in these small towns, we’re not talking about a position that pays so much that it makes sense for somebody to move from three states away. These are smaller markets and the salaries are commensurate.
When you walk into a new building, do you see common “mistakes” the architects have made?
(Laughs) Yeah. There is never enough storage space. There’s rarely enough outside marshalling area for trucks unloading and buses parking. There’s rarely enough office space.
You used to see very poor designs for box office. That seems to have gotten much better lately. People are appreciating how much really goes into the box office space. But we’ve gone into facilities where there’s a 10-foot-square fishbowl surrounded by glass out in front of the building. That’s supposed to be the box office! It’s a security nightmare.
So, yeah, there are some common things. Somebody running a bunch of conduit over some steel overhead out in the arena may not think it’s all that significant. Then you realize that’s where you’re going to be trying to attach beam clamps to where you’re going to be dropping points for your chain climbers to hang sound and lights. Then it is a problem.
RFP competition can get nasty.
The most contentious one was probably the one we just went through in Evansville, Ind.
We submitted a proposal that seemed to have clicked with the selection committee and they selected us. But
Do you have a predictable merch rate or is it market-to-market?
It’s not so much different in Indiana as it is in North Dakota as it is the expectation of the group coming through. What they are willing to pay, what they are doing on this tour.
If a promoter was padding Pollstar boxoffice reports, would you have anything to say about that?
We like to do the reporting. If the promoter says no, we’ll let them do it. I’m not aware of it happening but I guess I’m not on the front lines either.
I’ve never heard of our managers being called to say, hey, wait a second. They didn’t really sell that many tickets, did they? In small towns, though, it’s a point of pride. “Hey, we want to know that there were 5,000 people for Miranda Lambert last week. We think that’s cool.”
You may be a private company not beholden to quarterly reports, but certainly city councils want to know how things are going.
We do a budget that the cities typically have to approve, depending on how much risk we have. We may own the bottom-line risk and, if so, they give us a lot more latitude. But in some cases we show them a monthly report on how we’re doing.
By the fourth month, after the first quarter, we start to reforecast the year end. By that point, our managers better be working with us to say, “OK, we need to, A) book more events and we need more corporate help to do that or B) we need to cut expenses.”
Is there a connection between VenuWorks and “Mr. Sunshine”?
If there’s ice or seats in the scene, it’s filmed at
You’ve watched the show?
Yeah, I can’t resist. At first I wanted to be upset because it was so silly.
The first episode had circus clowns trying to take out ice with axes (for a changeover). The hot water pump was broken so they couldn’t run hot water through the floor to melt the ice.
Well, you can always melt the ice. The problem is maintaining the ice. It will start to melt just by turning off the refrigeration. And the fact that the clowns were already there? It’s move-in day and there’s a full ice sheet on the floor? It’s just ridiculous.
So I try to turn that part of my opinion off. I like the actors in it. We’ll see how it goes.
Is there any part of the show where you’ve said, “OK. That’s spot on”?
The instant hype for a photo op because something has to happen that day. That happens often.
The first show where Allison Janney wants the photo op with kids and it turns out to be the exact opposite of what she wants because the clowns come in and she gets scared. She’s holding a kid and throws the kid to somebody else.
Some of it reads true.
During a recent
I can match you. I had a governor once show up backstage at a
My Taylor Swift story: We had flooding at the facility in Cedar Rapids in June 2008. Six weeks later, we reopened the arena and our first show was a sold-out Taylor Swift. She actually, from the stage, gave a substantial amount to flood relief and sang a very poignant song, and had gone to the trouble of having someone collect a bunch of videos taken during the flooding. So while she’s singing her song, she’s showing all the flooding on the big screen. There wasn’t a dry eye in the house. It was incredible.
What was one of the more difficult moments of your career when it comes to concerts?
Oh, I remember a concert tour that was losing lots of money. A band had come back together – it was a reunion tour – and each member had a different tour accountant. Nobody was talking to each other, everybody was losing money. That was a fun day.
Most of the challenges aren’t with the artist. It’s more mundane, operational things. I remember a small circus where one guy was holed up in his truck and had big cats in it that he wouldn’t let out. His daughter had not been invited to a birthday party of one of the other performers, and he was mad.
But these things get resolved. It does start to sound like “Mr. Sunshine” I guess.
What are some of the artists who are a joy to work with?
My all-time favorite was George Burns. This was 1980, at the height of “Oh, God!” and he had a resurgence in his career. We hosted him at the
He was in during the day for a soundcheck. I walked him next door into the old theatre that opened in 1910 that had been renovated. He walks in, looks around and says, “Gracie and I played here in 1928.” And he turned to me with a straight face and said, “Did you ever find our trunk?” He remembered the date and everything. He was everything you wanted him to be. He was God from “Oh God!” He was just marvelous.
I’ve got some favorites.
How important is the load-in area?
It means a lot as far as being efficient and not having a lot of people standing around, adding an hour or two to your load-out or load-in. Being able to get the equipment in and out, and being able to change over the building.
I mentioned storerooms. I wasn’t being facetious. Not only do you need enough of it but in the right place so as you’re moving out one end toward the truck you can start to bring your ice deck off the floor on the other end.
And the devil’s in the details. The real devil in arena management and theatre management is what is happening when there’s nothing on stage. That’s where you leak money. It’s in those changeovers, the cleaning costs, utility costs. You want to save the 20 man-hours you’ve got because there are too many doors needing to be guarded for the four-hour load out.
And it’s hard to convince an architect of that. You’re looking at a $100 million building and they’re saying, “We’ve engineered this as tight as we can. What’s the difference if this door is over there versus over here?” Or, “You can’t be serious. You actually need another load-in door? You need another loading dock?”
When you’re talking about small markets, what events keep the lights on?
Less and less, it’s concerts. You make less money off them because the days of having 10 percent rent and 3 percent box office doesn’t exist any more. So you find or create festivals that you can do every year that will be perennial moneymakers. You find and develop regional acts that you can bring in.
When I ran the building in Dubuque, we did Def Leppard and we did
Does it come down to things like a farmer’s market?
It can. We try to develop new events all the time and if it works in one place we’ll take it to another. You literally write the manual on it and take it to the next city.
The hot one for our convention centers right now – I love this – is a tattoo expo. You can make a ton of money on that. We’ve gone from tough man contests 30 years ago to mixed martial arts today.
We’ve made serious money picking up a regional show out of a little theatre in the Twin Cities called Church Basement Ladies. We’ve presented that in three or four of our markets and it’s done very, very well. It’s just a little musical based on four ladies and a Lutheran pastor. It’s all very upper-Midwest. It’s very Lutheran. But it works in Des Moines and it works in Brookings. And Spencer.
Any closing thoughts?
I should say “Thank You” to the people who make VenuWorks work. We’ve got an incredible group of people. They stay with us. I mean we’re certainly not the highest-paying company in the world. The people that we have in the smaller towns could just as easily make much bigger money working in larger cities. But it’s sort of a family. I’m really proud of them and they make us look good. It’s all about the people that are out there making it happen.