SMG Gets Initial Nod For Greek

SMG is in the driver’s seat to be awarded a one- to three-year contract to manage the  in Los Angeles as an open venue after Nederlander Concerts’ current contract runs out in October.

A letter from Michael Shull, GM of the city’s Recreation and Parks Department, to Councilman Mitch O’Farrell dated Aug. 13, and first reported by Amplify, spilled the beans and indicated SMG beat out Spectra for the recommendation.

“On July 27, 2015, two proposals were received from two widely respected and experienced concert venue management firms … Spectra and SMG,” Shull wrote. “After receiving the unanimous scoring of both proposals, RAP is prepared to make a recommendation to its Board to award the Oversight of the Greek Theatre Open Venue Model contract to the highest-ranked proposer, SMG for a variety of reasons including, but not limited to, their detailed and significant response to areas of community concern.”

Of course, as was learned the hard way in spring when the L.A. City Council rejected a RAP recommendation to begin negotiations on a contract, nothing is final until the ink is dry on the agreement. But it’s doubtful the city council and parks committees are interested in a repeat of the debacle, in which Live Nation was recommended by RAP for the concessions contract but was ultimately rebuffed by the Council in the face of pressure from neighbors and Nederlander. The standoff resulted in the recommendation the Greek be run as an open venue and RFPs be issued for management and concessions operators that are not involved in booking the 5,800-capacity venue.

Shull’s letter described the open venue model as “the best revenue opportunity RAP has seen in decades.” It included what are described as “conservative assumptions” in the development of anticipated revenue. Among those “assumptions” are an average of 75 percent capacity per event and an average $70 ticket, $12 per head in food and beverage; minimum revenue share on F&B at 40 percent; minimum revenue share on box seats and sponsorships of 75 percent; collection of 100 percent of parking (less expenses for shuttles and traffic control); rental rates of $25,000-$35,000 per event; and a $25,000 flat rate per event to cover staffing, cleanup, police and EMT services, and lighting and sound equipment leasing.

The letter assumes annual expenses of $1.5 million “associated with the Open Venue Model Oversight Management.”