By Linda Deckard/Venues Today
New concessions deal with Live Nation amphitheaters is about the fan experience
Gexa Energy Pavilion in Dallas is one of 34 Live Nation-owned and -operated amphitheaters Legends Hospitality will serve under its new concessions contract.
While the long-term plan is to shop Live Nation and Legends Hospitality services to third-party clients as a turnkey option, the immediate task is to launch new food and drink services by Legends Hospitality at 34 Live Nation amphitheaters as the season opens over the next 30-60 days.
Legends Hospitality and Live Nation struck a deal for food and drink services at those North American sheds in mid-December, finalizing the agreement just Jan. 1, said Shervin Mirhashemi, president and COO of Legends. His counterpart at Live Nation in negotiation and implementation is Mark Campana, Live Nation co-president for North America.
“He and his team were looking at a bid for their amphitheaters. He and I had a conversation. I knew him from my days at AEG,” Mirhashemi said. “Coming out of that call it seemed what they were looking for as far as concessionaire operations going forward matched with the mindset and innovation we have as a company, certainly on the hospitality side of the business.”
The process took over a year as the contract for those sheds went out to bid, said Mirhashemi, who moved over to Legends a year and a half ago from AEG. But the turnaround is just three months. He didn’t anticipate everything will be done the first season.
Legends Hospitality had an edge over the competition because it is focused on the fan experience, adding value and innovation to the operation, he added..
“We have many different facets to our company — a robust sales arm, a global planning group. On all fronts of our business we’re in the customer experience business and enhancing that customer experience,” Mirhashemi said of the deal. “Live Nation is at a point where they were looking at these venues and ways to enhance the experience, and certainly food and beverage is one of those. As we got into more details and into the weeds as to what all that meant, it came to life for all of us that what they wanted to accomplish and what our desires were a perfect complement.”
PUTTING IT ALL TOGETHER
At this point, over 75 full-time people have been hired with year-round responsibility for Live Nation business. Mirhashemi said they began recruiting in mid-December and the result is a mix of Legends personnel, existing amphitheater employees and industry veterans.
Bill Wilson came on board as vice president, Live Nation Hospitality, responsible exclusively for Live Nation Business. He answers to Michael Bekolay, newly named Legends Hospitality Group COO and, ultimately, to Dan Smith, President of Legends Hospitality.
“We had a unique approach to this business. We suggested to Live Nation that these venues deserve and need year-round dedicated attention and staff,” Mirhashemi said. Legends created a dedicated structure just focused on the Live Nation Business, under the Hospitality umbrella, but 100 percent focused on Live Nation. Then four more dedicated folks responsible for clusters of amphitheaters in their region joined Wilson.
Those four regional VPs include:
· Kevin Austin, South Eastern Regional Manager
· Don Griffin, North Eastern Regional Manager
· Brent Sloan, Western Regional Manager
· Geno Svec, Central Regional Manager
Legends regional infrastructure already in place will be involved as well, but the key is the dedicated staff concentrating only on Live Nation Business, which also includes general managers and dedicated staff below them, such as finance and human resources. “Then layer in the not-for-profit groups involved with all these venues and we’re talking thousands of people,” Mirhashemi said.
“That dedicated infrastructure was hired within two weeks of Jan. 1, when we got the keys to this new car,” he added. “We put together an all-star team. All the GMs are now on board and going through the process of the transition.”
Live Nation Business will be overseen from Legends new Culver City, Calif., offices, relocated just this week from Century City. “With Live Nation assets out here, plus we have the L.A. Coliseum, Rose Bowl (Pasadena), US Bank Tower (L.A.) and Angel Stadium of Anaheim, Los Angeles and this region are very important for us,” he said.
THE PLAN IN PLACE
The winning bidder promised to make food part of the show, helping create an environment where fans would come earlier and stay longer and spend more.
To “elevate the food and beverage program” Legends Hospitality Group will create diverse food offerings, like a picnic basket program and an enhanced grab-and-go market concept, Mirhashemi said. “Some concepts only fit in certain markets.”
They are also looking at increased vending services, “making sure we go out to the customers and fans so they don’t have to miss the action by coming out to the concessions area,” he continued.
They will also institute a regional chefs program where appropriate, customized to each market. There may also be a national chef program.
Enhanced POS (point of sale) offerings so fans spend less time in line so Legends has the flexibility to go out to the customer is in the works, as are VIP premium services at various levels and price points.
Innovative technology is a hallmark for Legends and “we are developing an app that can enhance the experience for the customer. We’re currently in the process of identifying what, which one, how quickly and what level,” Mirhashemi said, promising an announcement in the next few weeks.
The plan, or course, is to drive revenue. Per caps on food and drink are normally in the midteens at amphitheaters. “We can certainly increase those numbers,” he said, saying they will be setting internal goals soon. “We think you get what you pay for. The deal structure was the right deal structure on these venues. We will provide them with the opportunity to grow the pie.”
THE PLAN GOING FORWARD
“We wouldn’t have been able to do this without this partnership approach,” Mirhashemi said. “They’ve been amazing as partners.”
Both parties have committed significant capital which will be deployed over the next several years, he said, declining to say how long or how much.
“We need enough buying power to do what these venues deserve,” he added, confirming Legends has been on a major buying spree.
The deal does not include equity in Legends for Live Nation and does not include sponsorships. Both companies have robust sponsorship sales divisions. “We don’t take our own sponsorship revenue when it comes to our venues,” Mirhashemi said. “We will identify opportunities and inventory for Live Nation and their team that can be monetized through sponsorships. We’ll bring that to the table.”
The differentiator for Legends is that “we are not just a food and beverage company. We have this robust global sales and global planning group that allows us to be involved with the life cycle of a venue from inception to opening and operating a venue,” he said. That diversity may lead to yet more Live Nation business.
It’s a game changer for Legends in that this is the firm’s first significant foray into the music side of the business. It was founded on sports, owned by the New York Yankees and Dallas Cowboys organizations. They dipped their toes into music festivals last year and have spent the last year and a half developing the attractions side of the business, namely One World Observatory atop the World Trade Center which opens in June in New York City and has a robust food and beverage business.
While this deal with Live Nation is transformative as a different vertical of business, it also opens new doors to other strategic ways Live Nation and Legends can work together going forward, Mirhashemi said. “The core businesses Live Nation is in, we’re not in. Strategically, we are going out to third-party opportunities in the marketplace, where we could deliver our best-in-class operations in our verticals of business – global planning, global sales and hospitality, in addition to Live Nation’s content. We could provide a real turnkey solution to third-party assets out there. We will be strategically aligned and looking at going out there and presenting together an opportunity for other third-party assets.”
It is comparable to what is happening in the venue construction business, where architects and construction companies are aligning for an initial design/build, versus the traditional design/bid/build where each entity is contracted separately.
As to third-party deals with Live Nation, sometimes the approach will be more traditional and one or the other will secure a contract and work to bring the other on board, but where opportunity presents itself, Legends and Live Nation will bring a unique, collective solution to the table, he said.
Where and when? “Within a month, we’ve identified a couple of third-party opportunities and we’ve already started having those discussions about how do we then go to market,” Mirhashemi said.
“But make no mistake about it, our focus this year certainly and going forward, we want to do a tremendous job on these 34 amphitheaters. That’s the core of what we signed up for, that’s why they chose us.”
Interviewed for this article: Shervin Mirhashemi