Nederlander Wins Delay On Greek

Nederlander Concerts got some good news in its bid to retain management of the  Oct. 1 when the Los Angeles Department of Recreation and Parks delayed a decision to award the concessions contract, which was expected to go to Live Nation.

The commission next meets to discuss the possible award Oct. 9 in Los Angeles. It was revealed Sept. 26 that the Recreation and Parks general manager asked the commission board to award a new contract to Live Nation at its Oct. 1 meeting and begin negotiations immediately. Nederlander, which partnered with AEG Live to submit its own bid, objected to what it called a lack of transparency in the process and the fact that it had less than one full business day to review the GM’s report.

An attorney for the company immediately requested the commission delay its award of the contract.

“We are pleased that the Dept. of Recreation and Parks delayed a decision today and appreciative of the outpouring of community support for Nederlander and AEG Live,” Nederlander CEO Alex Hodges and AEG Live President, North America Rick Mueller said in a statement. “Once the scoring documents are unsealed, the public and commissioners can begin to thoroughly review the proposals, which will reveal that in addition to continuing Nederlander’s award-winning stewardship of this iconic venue, Nederlander/AEG Live also guarantee $6,250,000 more revenue to the City than Live Nation in the 10-year contract, and a total of $17,500,000 more guaranteed rent over the potential 20-year term, which includes two 5-year options, at the discretion of the city.  

“This is in addition to another $19,000,000 for a complete historic renovation of the venue overseen by Rose Award-winning architect Brenda Levin (Griffith Observatory, Dodgers Stadium and Wiltern Theatre).”

Live Nation did not immediately respond to a request for comment.

The 5,800-seat Greek Theatre is owned by the City of Los Angeles but has been operated by a Nederlander company since 1975. On the second and final extension of its current 10-year agreement, Nederlander Concerts will continue to operate the Greek until it runs out in October 2015. Nederlander-AEG offered more in cash and a better revenue sharing arrangement than did Live Nation, according to the RAP GM’s report. In turn, Live Nation committed to a $40 million long-term capital investment plan to further upgrade the venue over the life of the contract. It also promised to stage more events.

It also offered a “Greek Theatre Community Trust,” a fund controlled by Live Nation “for the purpose of irrevocably receiving funds generated through a ‘special ticket sales program.’” The fund will be “established using a guaranteed minimum of 50 premium seat tickets for each show to be held by Live Nation at the Greek Theatre,” according to Live Nation’s proposal. Nederlander CEO Alex Hodges told Pollstar he is “disappointed” with the report, but declined to comment further before the board meeting.

The release of documents less than one full business day before the board’s meeting “effectively prevents [stakeholders, including Nederlander-AEG] from having a meaningful opportunity to scrutinize the recommendation and until after the Board votes to approve the award,” Nederlander attorney Andrew Kugler wrote in a letter to Sylvia Patsouras, the president of the RAP board.

“Put simply, there needs to be transparency in this process, particularly given the significant red flags raised by the Board Report,” Kugler wrote in the six-page letter. The Greek Theatre generates more money for the city than any other RAP concession excluding combined golf course revenue, according the commission’s report. And it just came off its busiest month in more than a decade, according to the Los Angeles Times, with more than 20 shows – more than Staples Center, Forum, Nokia Theatre and the Palladium combined.