SMG manages venues around the world ranging from 600-capacity clubs to 80,000-capacity stadiums, supported by a strong food and beverage business.
– John Sharkey
Pollstar spoke to John Sharkey, executive vice president of SMG Europe, in light of the company’s 40th anniversary in 2017.
In Europe SMG just started managing the
SMG will open the 3,500-capacity Hull Arena in Kingston Upon Hull, England, in 2018, and the 12,000-capacity Bristol Arena in conjunction with Live Nation, which is to open in 2020.
What does venue management in 2017 entail for SMG?
We not only operate on the consulting side, but also the delivery side. So we can offer a range of services from how a building should be set up and designed to making sure it is delivering exactly what patrons want, which leads to the best monetization of each individual asset.
We also look at the marketing approach to selling tickets, the inventory approach to getting events, the delivery approach to food and beverage, the structure of setting up the building to operate as an event business, the ways of bringing international partners into the building, and also hospitality and various VIP packages around buildings.
Do you offer all of these services in-house?
Depends on where in the world it is. Ideally we will end up delivering everything ourselves, but there might be a project where we will come together with partners that are strong in one particular area in a particular part of the world. We’re interested in getting the right content into buildings, attractive content that is relevant to the respective markets.
How did the collaboration with Live Nation on Bristol Arena come about and will the venue be open to other promoters?
We work with Live Nation through Showsec as security partner. We’ve also worked with Ticketmaster and will continue to do so and we work with Live Nation as a promoter. We obviously deliver a strong food-and-beverage business and our venue management skill set. So we felt that there was quite a good combination of skill sets when it comes to exploiting the building.
SMG as a business has always been agnostic about content. In other words, we don’t have a main promoting or conference business, so we work with all concerts and exhibition organizers to deliver as much content to the venues as possible. So, absolutely, we’ll be trying to get Live Nation to use the building heavily, but we’ll also be looking to get AEG, SJM, DHP, Kilimanjaro, Marshall Arts – you name it – to use it.
Would SMG ever promote an event themselves?
If there is something that nobody else would touch which we believe in, or maybe on the smaller theater side, we would probably reconsider. But our core business is not music promoting.
What are the main differences between the U.S. and European markets when it comes to the venue business?
With most of the venues in the U.S., relationships are structured through management contracts [with the venue owner retaining most of the content risk and SMG being incentivized to deliver], whereas in Europe, largely, it’s usually the venue manager taking all the risk involved in operating the building while the promoters take most of the commercial risk on content.
Would you say the UK and mainland Europe have major differences as well?
We can operate them as one business, but we need to be culturally relevant in the properties we operate. The venue operator in Germany needs to have an understanding of the German market as well as the international promotions business. Same applies in France, Italy, Holland and Scandinavia. It’s about bringing in your best practices in venue management and at the same time adding a local cultural flavor to the business.
What are the most significant changes the venue business has gone through over the years?
There’s been a number of new venues that came to the market, certainly if I just look at it in the context of the UK. Since 2007 you had
Liverpool received a new venue, Leeds, Dublin and Glasgow too. Aberdeen and Bristol will receive new venues as well. There have been a lot of improvements to the customer offering. But the key thing is the growth in stadium concerts and the festival market, as well as a growth in locations that host live content: race courses and heritage centers for example – a key challenge over the last five years has been to make sure venues can still sell tickets for events that are presented in the venues.
And ticketing of course, from tickets being sold at the box office to online via web portals and then through applications and social media platforms. So another key challenge is to make sure we can sell tickets well for people who chose to place their business with our buildings.
Any other challenges?
PRS are trying to increase their live music rates. Property taxes in the UK are significantly increasing over the new rating evaluation. As businesses we need to make sure we’re maintaining margins while not hurting the people that are bringing the business to our buildings.
Has security increased in importance?
Again, it’s down to the individual markets. Every market will have a different set of considerations to be taken into account. Generally, over a period of several years now, we’ve consistently been assessing the threat of specific events with the content owners coming into our buildings and planning our security measures appropriately. It’s always a difficult one to get right, but the plan is to treat each event and the territory in which it’s presenting with its own analysis of the risks and taking appropriate risk mitigation measures where we can.