But, what if it rains? Concerts in HRM Part 2

DSC_0018This is not the first time your faithful scribe has written about concerts in opposite land.

Now our special east coast brand of concert socialism has bent both the market and audience expectations like a five dimensional pretzel. That’s right, like Star Trek, things are so bent out of shape we need an extra dimension to even map out how we got here.

I am happy to report that more information keeps coming in, allowing us to continue to hope for evidence based decision making.

Whether anyone at city hall, the Herald or elsewhere cares to listen remains a question.

In my last post Patrick at Landsdowne Park in Ottawa told me “rent is obsolete.” Shortly after I posted that, I got a great short email from Brent Elsaeseer outlining the policies of the City of Regina regarding their stadium that basically confirms what Patrick said:

For concerts at Mosaic Stadium, the City of Regina contracts an organization to be the local promoter for this type of event on an individual event basis. We then negotiate with them on our revenue items. Then they take these negotiated costs to the promoter/band for approval. Our typical charges are:

  • a facility fee per ticket
  • a percentage of food and beverage sales
  • a flat fee for post concert venue clean up
  • rates for trades (plumber, carpenter, electrician)

There are other services that may or may not be a part of their responsibility for a large show such as police, EMS, fire, parking, transit, road closure, etc.

The local promoter picks up the costs for things like box office, signage, ticket takers, ushers, security, other contractors, etc.

So, how does all this related to Power Promotions and whether a stadium would have made a difference?

Two things are glaringly obvious, the more I research this.

First, the big one is that the revenue going to a stadium comes from all the ancillary services, food, booze, tickets, trades.

Concerts in the Common had huge support for free services, Parks and Rec, policing, etc, was a part of the non-cash investment.

In return, sure Power had to fence the site and rent porta-potties, but a key revenue item for him would be that he would have benefited from booze & food sales.

Concert venues often charge a “merch percentage” which means the venue gets a cut of teeshirt and poster and CD sales. It is conceivable that Power might have gotten the merch percentage on the Common that a stadium would likely claim.

Trying to drive up these ancillary sales would be a major reason for the flooding of the market with free tickets in the week leading up to Black Eyed Peas, and other large concerts. They might not have paid to get in, but hopefully they have a couple Canadians while they are there!

So, while moving into a stadium saves the theoretical future HRM concert promoter some set up costs, it removes a substantial revenue line that Power had access to.

Other than that, the Concert Promoter still needs to pay an army of security, will still need to rent a stage, trusses, sound and lights, hire loaders, ushers, cleaners, in a stadium, just like on the Common.

So, this revenue traded off against expense means it takes a really imaginative person to believe a stadium is going to save the promoter more money than the promoter will loose in revenue.

It is, thankfully, unlikely that HRM would build a stadium that was either covered, or seats more than 20,000 people, meaning it could hold 30,000 for a concert.

The leads us to the second big thing to consider when thinking on concert economics.

An open air venue is still going to be subject to last minute purchasing (or not) by people afraid of rain.

Additionally, a 30,000 capacity venue is not big enough for the projected attendance all these events, from Rolling Stones to Paul McCartny to KISS, so if we really are targeting only the biggest concerts, any reasonably sized facility wouldn’t have been big enough to hold them anyway.

My next post will discuss how these big concerts don’t really occur even in Canada’s largest market, Toronto, and how disconnected from objective fact based concert planning the government and tourism industry has become.


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