Executive Profile: Peter Duthie
That’s especially impressive when one considers its relatively modest 13,000-seat capacity. The arena capacity may be modest, but SSE Hydro and the SECC that surrounds it are anything but. Built in 1984 on River Clyde in Scotland’s largest city, the SECC began supplementing its conference and exhibition business with live events, including sports and concerts. With the increase in demand for additional space, SECC built the architecturally striking 3,000-seat Clyde Auditorium, fondly known as “The Armadillo,” which opened in 1997. Even the new addition was bursting at the seams with events and losing potential business to scheduling conflicts that often come with multipurpose buildings. Plans began for the SSE Hydro to be built specifically for live entertainment.
The Great Recession struck the globe just as financing was being put together to build the SSE Hydro. The city of Glasgow bought the property, providing the cash needed to build the new arena, and nearly 20 years after the opening of The Armadillo, SSE Hydro is proving to have been worth the risk taken by the city and SECC. Duthie was there from the start – having talked his way into a job after graduating with a Master’s degree in recreation management. An avid cricket player, Duthie also toured with his amateur team at the time. SECC management and Duthie were able to create a work-around, and he’s returned the favor over four decades, working his way steadily into his leadership role and helping to develop the complex into one of the planet’s most significant of its kind.
SSE Hydro is one of the top venues in the world, after just two years of operation. What makes Glasgow such a focal point for its success?
Glasgow’s had a long tradition of audiences renowned for being lively and appreciative. The Scottish population generally spends more on live entertainment than any other part of the U.K. We’ve been in the live entertainment business for a long time, but we had used one of the exhibition halls to create a temporary environment with a capacity of 9,000-10,000. That comes with its challenges in building up and breaking down seating, and trying to do it in windows where you would run a number of shows, build out the seats, then break them down.
Daily planning was a challenge and clearly there were cost implications, and the customer experience wasn’t where you would want it to be. Having gone from that environment to what we believe is one of the finest arenas in the world is one of the reasons the Glasgow public is so excited about it.
The customer experience has been a complete sea change, and they are really enjoying it and buying tickets in big numbers, which the promoters love.
The Hydro is one part of the larger Scottish Exhibition Center. Can you tell us how SSE Hydro came be built there?
The original buildings were effectively an exhibition complex that opened in 1985, and as it was being built there were some conference facilities integrated into it. The design was amended slightly, but it was principally an exhibition venue. I actually started with the business in 1984, while the original building was being built. We identified there a potential to present sports and live entertainment in the exhibition halls, because there was no large capacity venue in Scotland at the time. The largest concert hall in Glasgow then was a place called the Apollo, which had just shut down. There was a major gap in the market. There were no purpose-built concert arenas in the UK.
In London there was converted building, Earl’s Court, which was a temporary environment. It was the same in Birmingham with the NEC. We started off with exhibition halls and the conference business started growing. Glasgow was seen as an attractive destination. We ended up building a conference center, which we nicknamed “The Armadillo” because of its shape, which is a 3,000-seat theatre, effectively, with some breakout space incorporated in there.
That provided a change to the conference business in the city. We also use it for live entertainment, and we use it for pantomime at Christmas, too. David Hasselhoff is featured this year, doing pantomime in the Armadillo. Capt. Hook and Peter Pan. That will be interesting in itself. We recognized that our main exhibition hall, which is 10,000s quare meters, the one that was used for concerts as well as for conferences and exhibitions, was operating at full capacity and we were turning away live entertainment business purely because of availability. In one month we turned down Lady Gaga, Stevie Wonder, and Michael Bublé because we couldn’t accommodate them owing to other business going on at the venue. Then we then started looking at the fact that purpose-built arenas had been built in the UK and we felt there should be one in Scotland, and it should obviously be on our site so that we could transfer our live entertainment business into it, look to grow the live entertainment business and also then give us scope for growing our conference business, too. It was a long process in building the business case, securing the funding, securing the planning, and it probably took about 10 years from first idea to actually getting the building open. It went through some challenging times in funding because in 2007-08, when we were just putting the package together, the financial world fell off the end of a cliff. That made funding challenging, so it took us a little while to come up with a solution.
Many building plans fell through during the global recession. How did SSE Hydro survive?
The city, with a great deal of vision, decided that we should push ahead and supported us to find a financing mechanism that worked for them and worked for us. We owned all our own property, so we sold it to the city and used it to fund construction of the arena. So the balance was used to build a new venue and the rest is history. Now live entertainment accounts for more than 50 percent of our business and we’ve still grown our exhibition and conference business and now really looking to see where else we can augment our business and facilities. Particularly to develop the conference e business further, because we believe there’s actually further opportunity in the conference market. To try to replicate, I guess making a statement on the world stage with what the SSE Hydro has done, I think there’s an appetite in our city government and national government to further develop our conference facilities, again, to do something that’s world class.
That’s a snapshot of the evolution of the business and the case for building the Hydro. I think, like everyone who’s been associated with the project, has been delighted with the progress. It’s made a major impact on the city, as you can imagine, with the economic impact as well as restaurants and bars opening up around the venue, regeneration of the area immediately adjoining it, the property and retail development of it, which has certainly been assisted by the success of the SSE Hydro.
SSE Hydro has won many awards in a brief time. To what do you attribute that?’ The one that’s most exciting for me, though the building has won quite a few awards, is one that is very much more about our staff. In the Live UK awards, the staff won the teamwork award, which means not only that the building is good, but the people are doing a good job as well. That’s absolutely crucial to making a building work. It’s much more comfortable for me to talk about my staff than it is to talk about myself. The beauty is, we’ve got a business that has grown with the industry. Our facility was constructed in 1984 and at that time we got in to the live entertainment industry on the scale of ants. There was no real interest and not a lot of experience in the UK and even Europe in running these types of events.
The States were ahead of us a bit. A lot of our team here has been with us 15-20 years or even longer and have grown up with the industry. The same with the evolution and development of the exhibition and conference industries. To the extent that we now have high degrees of skill in our business, I think particularly with the success we had last year, in staging events of national and international significance, things like the MTV Europe Awards and which the organizers of that said is probably their best event ever. And that’s all due to the staff that has the skill, commitment and passion for delivering high quality evens. We are, ultimately, a business of buildings and people. You can do so much with the buildings, but it’s really all about having the commitment and willingness to go the extra mile.
We want people to enjoy doing business in our venue, and we can enjoy it as well. It’s about doing business with a smile on your face. We know there will be challenges. Every event of scale comes with these challenges, but the more you can anticipate and plan to deal with them, and take a very proactive approach in dealing with any issues that arise, you build confidence and trust with your client base, whether promoters or the end users. Those relationships are absolutely crucial to delivering successful events, which works for everybody. The level of commitment of our people in getting that building open and with that succession of events that followed the opening. It’s one thing grafting everything together when you open, it’s another to then deliver a series of high profile events. It’s quite extraordinary and I just tip my hat to them.
And you did that with your existing exhibition center team?
A lot of times when you open a building, there’s a new team put in place to open the building. What we did effectively was open a new building with our existing team, augmenting it slightly, so not only was our team working up to opening the building and everything that was required to do that, we were still running an existing business. The benefit of that were the skills that transferred across. We weren’t running from a cold start. Our operational team engaged at a very early stage with the architects and engineers and design team for the Hydro. They were able to input in to the design process, which means our customer journey works extremely smoothly because architects appreciated them from an operational perspective. John Langford is director of live entertainment. With John, we took a decision that we needed someone of stature in the industry when we opened the new building because we wanted to take the live entertainment to a new level and appoint a director dedicated to that sector. So John took on the role. John joined us from Cape Town, South Africa. He managed the biggest concert promoter in South Africa. He brought some real skills and ability into the team. He’s been a huge part of the success of the Hydro. John’s played a significant role and is very much the face of live entertainment.
We talked earlier about financing, and the architectural bells and whistles, but you have a bit of sponsorship which must help.
Securing a naming rights sponsor very early on in the process and with a significant level of income coming from that was important. It helped bring other partners on board and developed a level of confidence. SSE is a utility company, they were looking to augment their brand presence in the country. And particularly … it was a major statement to sponsor an arena for them. They weren’t a high profile sponsor up to that point. They really took a big step with us. Obviously, people like Coca Cola, Heineken, Sony, that followed them are big international names. They are one of the major utility providers in the UK. Hydroelectric and gas.
How has your partnership with AEG Facilities contributed to your success?
Our strategic partnership with AEG meant we were able to tap into their experience worldwide as well, which also fed into the design process. I think one of the keys to the operational success of the building is that level of expertise that was provided in the design process. When we were looking to develop the building and expand our compass, one of the things we looked for was best practice elsewhere in the world. Clearly AEG is one of the leading players, and they had this success with the O2 in London. I think that was one of the main drivers for us, seeing that operation, and the success it had commercially with its partnerships and its commercial partner program. We were looking for somebody to assist with that, as it was a skill set we didn’t have in-house.
Up to that point, we really didn’t have any sponsors and it was difficult to sponsor a hall within an exhibition complex used time to time for entertainment. As you can imagine, it’s not an easy sell. Whereas having a venue that is, in effect, Scotland’s national venue, once it bespoke for live entertainment became a very much better proposition. We ended up in a partnership with AEG, which is really around their assistance in providing us with input into the design and operation of the building, input into the commercial partner program, and also incentivized to help us put content into the building as well. As I’m sure you’re aware, content is key to everything. There’s been no equity stake in the building, but it’s been a partnership that’s worked well for both parties.
Let’s talk a little about the flexibility of the building, and the description of the building as having the ability to “glow.”
The external cladding of the building is a substance called ETFE. Please don’t ask me what it stands for, but it’s basically big polythene bags, if you like, which are inflated. There’s LED lighting inside the building that can be lit basically any color you like. It can be dynamic; the lighting can move, and we can turn it any color. So when Prince was in the building, it was purple. When Pink was in it, it was pink. We’ve also supported a number of charities and turned the building into various colors on specific dates to support different ideas and concepts. Its default position is green and blue, which is our naming rights partners’ brand colors. It can be used to reflect brands as well. But it does make the building dynamic and it does bring it to life. It can be quite spectacular at night so people can start their entertainment experience as they approach the building, even before they get inside. I think it helps to create that excitement. The building itself is pretty flexible. We made a decision early on … one of the things that artists particularly like about the building is that it’s designed for live entertainment as opposed to sport. I think, conventionally, most arenas around the world are built with sport in mind because they potentially have an anchor sports tenant such as basketball or ice hockey. We didn’t believe there was a market for that in Scotland, or Glasgow, and we wanted to focus with that in mind on entertainment.
Every seat in the building faces the stage, whereas even the likes of the O2 in London, which is built around sport, the setting and sight lines are such that in some spots you are looking over your shoulder at the stage. It means the audience is also closer to the artist, as well. It’s as if you are on top of them because the building is circular, albeit there may be an end stage. The flooring can be cleared reasonably quickly to effect the transition. We sometimes do concerts with standing room on the floor, so we can put 5,000 on the floor and another 8,000 in the seats. Or we can do fully seated events with 12,000. We can also drape it down to smaller numbers as well. We have an automated draping system that means the venue can drop down to 4,000-5,000 and still not feel like you are in a bigger venue that’s just been draped down because it was designed that way from the outset. It does work well for promoters who want to take a bit of a risk with an artist and … it allows the potential to grow as tickets sales go. We can also do small-pad sport, though it was built for live entertainment, so we can do events like tennis. We have the World Gymnastics Championships coming up next month.
Changing gears a bit, we understand you are an avid golfer.
The Hydro has put three shots on my handicap! It was two; now it’s five. I need to get in more practice. Too much work and not enough golf.
Do you get much time in at St. Andrews?
I played the Old Course just a month ago. I’m very fortunate. My father’s actually a member of the Royal and Ancient Golf Club of St. Andrews, and I definitely manage to get in a game with him there annually, at the Old Course. It’s very accessible; it’s only about a two-hour drive from Glasgow. I think a lot of people don’t realize how accessible most places are within Scotland. For example, Gleneagles, which is only 45 minutes from our venue. Loch Lomond is only a half hour away. We’re surrounded by world class golf courses, which is nice. There’s a lot of Americans who would love to play at St. Andrews, but Pebble Beach is on my bucket list.
What drove you to get into the business?
My passions are my family, my golf and actually the business. The SECC has been my whole career, effectively. I got my start there in the business, but I’ve got a sense of pride of what we’ve achieved and a real desire to see where we can take this. It’s a passion for the business and a passion for the city and for Scotland. Last year, one of the nice things that got associated with our venue is the impact that it has had locally. Last year, activities at the venue had an economic impact of just short of a half-billion pounds sterling. So that expenditure is generated in the city on the site from conference-goers coming in, exhibitors contracting, etc., and people coming into the city and spending money. It’s an important part of the city’s economy and it’s nice we’ve got it to that stage. That gives me a lot of pride. On a personal level I’ve been married for 27 years, have two daughters, 24 and 25, who both love the fact I’m involved with a live entertainment venue. They enjoy the music. My wife’s a big fan as well, and we’ve had wonderful times in the building. There was a time they felt they had to come to a concert because it was the only time they got to see me, I think. Opening up the Hydro was pretty much a 7-day a week, full-on commitment. But things are settling down now in to a more normal cycle of activity. But my family comes first. Absolutely.
You could have gone in a different direction.
I actually qualified as a physical education teacher, originally. When I qualified, I immediately said I wanted to diversify a little bit and do something maybe a little bit different. So I got a master’s degree in recreation management. And when I was finishing that, I read in the paper that a chief executive had just been appointed for the Scottish Exhibition Centre, as it was called at the time, and I identified a building with a big exhibition hall, like the one in Birmingham called the NEC, and indoor sport had been staged there. I wrote to the chief executive and said there must be an opportunity if you are staging indoor sports events in Scotland at the scale of the new venue. So he said, “Come talk to me” and I said, “Give me a job.” And he did. In fact,
I was their first employee appointed by the first chief executive of the business. My initial agreement was to look at the potential for staging sports events in the venue and I very quickly moved into live entertainment such as concerts. I was researching what we needed to do at the venue to make these things happen and then I went into more of a planning role and operational role, house management, and that developed across the board into live entertainment and to a role across exhibitions and conferences too, so I was covering all aspects of the business.
Then we were looking at how to run the business more efficiently, and sort of coming up with a few ideas. I was given more of a commercial role within the business. So I was always very fortunate to have been given lots of opportunities to learn all aspects of our business. We made lots of mistakes as the business evolved, but you learn from those and move on. Our whole team managed to build up a high level of skill and experience which we’re now reaping the benefits from. I guess it was a matter of just gradually taking on various roles in the company over the years and eventually I was commercial director when Hydro was opening, responsible for sponsorship and the commercial partner program amongst other things. I was really privileged to be asked to lead the entire team in April of last year, when the opportunity arose to take over. It’s been a fantastic journey. One of these days, I keep thinking, I have to go get a proper job. There was another reason, actually, why I stayed with the company in the early days, I guess. A lot of people take their experience and then move on. I was playing international cricket for Scotland for 12 years. The company was very supportive in giving me time off that was required in order to pursue that, because it was an amateur sport. It was not on a professional basis. That was another reason for my loyalty to the business in some sense was the fact that they were supportive of that career from the mid-80s to the mid-90s.
Could you imagine yourself doing anything else?
If I ever thought about going in a change of direction it might be in something new happening in the business, whether a new business or a new facility, or any new opportunity I’ve been asked to take on responsibility-wise. I love where I am. I’m passionate about Glasgow and Scotland, and my golf. All of these things are on my doorstep. I live in a beautiful village 18 miles from the venue. It takes me 35 minutes to drive there in the morning and once there, we are literally five minutes from the city’s center by train. Our venue is pretty much the city center. I think it would be hard to replicate the quality of life anywhere else.