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Feats for filling seats
04-07-2006
Memphis Business Journal
Forum gaining in popularity for non-basketball events
Following a team that broke attendance and sell-out records, made it to the NBA playoffs for the second year in a row and got off to the best start in team history should translate to "butts in seats" at Memphis Grizzlies home games, but this season has seen everything but butts.
Even though the team hasn't been setting NBA attendance charts on fire, FedExForum is becoming a growing haven for fans of everything but professional basketball, including monster truck rallies and music.
High-end concert tours are adding to the Forum coffers, including events featuring the now-disbanded Destiny's Child, which drew 8,000 fans, and rock legends The Rolling Stones and Elton John, which drew 14,188 and 13,315, respectively.
Steve Zito, vice president of arena operations for the Grizzlies, says FedExForum is in use more often than not thanks to a strong first quarter. January saw the building host 18 events, while 21 were held in February. March ramped up to 26, including the 2006 Conference USA Tournament and a concert by Kid Rock on March 18, bookended by Grizzlies games on March 17 and 19.
"Success breeds success and right now things are busy and going well," Zito says.
Since the financial arrangement of every event is structured differently, Grizzlies officials are reluctant to release financial details about any deal. But Andy Dolich, Grizzlies president of business operations, says some events -- especially high profile concerts -- make little or no money.
Brian Young, owner of PrizeFight Boxing, has arranged three events in FedExForum, including two HBO pay-per-view fights and the upcoming Jermaine Taylor/Winky Wright fight on June 17.
PrizeFight rents the Forum for boxing events and shoulders the financial risk by paying for marketing, advertising and insurance for fighters, but has turned a profit on all of its fights. Typically, the facility can either be rented or the team will partner with the promoter, which is done for some concerts, like 2004's Usher concert. Young chose the former. While he declines to share what he pays for renting FedExForum, he says the rental fee is based on how many tickets he plans to sell.
The ESPN Friday Night Fights event held at FedExForum last February was designed to sell tickets in the lower bowl of the building only, which required less staff and thus a lower rent. Regardless of what he makes from events, Young says, the Grizzlies and the city of Memphis both benefit.
"They're in a win-win because they keep parking and concessions and don't have to put up a dollar, just like the city of Memphis with our events," Young says. "Whatever they make is pure profit."
Young says other venues across the country will often put up money for events, but most don't for boxing. Other events, like the Rolling Stones concert held last December, can be a losing proposition for the Grizzlies because the high-profile acts get most of, if not all, ticket sales and revenue. In those instances, what money the team does make comes from parking and concessions.
Dolich says the exposure these events give the city and the building offset the loss.
"There are some events that go straight to our bottom line and are pure profit, but the Stones take the largest percentage possible," he says. "The arena business in most places is a very thin margin and sometimes at a loss because of economics. A lot of big shows take 100% ticket revenue and merchandising out of the event. You don't have to be on the council of economic advisers to know that 100% of tickets and merchandising revenue doesn't leave you much."
The concert business is not alone in that aspect. Events like conference and NCAA basketball tournaments have stipulations in their contracts that cover existing signage and replace it with sponsors of the conferences or NCAA. Those events also control all but 20% of signage, parking and concession revenue.
When he took over booking responsibilities for FedExForum last summer, Zito says his goal was to get promoters to come to Memphis and see the building for themselves. That initiative resulted in Destiny's Child, Elton John and the Stones performing here -- with Memphis actually stealing one date from Little Rock.
"Little Rock had the (Rolling Stones) date and Memphis was going to be passed over, but we went to bat and fought long and hard to get them here," Zito says. "Needless to say, we were successful."
One of the issues Zito and Dolich say promoters had to get past was the perception that Memphis couldn't or wouldn't support big shows. Also there was the black mark of The Pyramid not being the most acoustically sound building on earth.
"We had to overcome a lot when it came to the music industry because people were used to bypassing us," Dolich says. "There weren't a lot of pyramidal recording studios in the country at the time, but with the Stones being the biggest gross in Memphis music history and the success of Alan Jackson, Kenny Chesney and Elton John, that'll change. This is our second year, but people are noticing the building."
When FedExForum first opened, much was made of the non-compete clause that gave the Grizzlies the first right to refuse any events. Some promoters took shows like Velvet Revolver's 2004 tour to DeSoto Civic Center, while shows that weren't expected to pack FedExForum like Kanye West's Touch the Sky Tour went to the Mid-South Coliseum.
Dolich says the team is selective about concerts because "not everyone can fill up an arena," but events like the Harlem Globetrotters yielded high numbers earlier this year, drawing more than 10,000 fans in January.
The Feb. 18 concert by country music star Toby Keith was expected to draw 8,000 fans, but ended up drawing more than 9,000 the day after an ice storm.
"The fans got in their Ford trucks and came out," Zito says. "There might have even been a few Chevys there, too."
One of the home games against Christian Brothers and LeMoyne-Owen, attendance improved as the Tigers began to win and move up in the rankings. Home games against Purdue, Texas, Gonzaga and a surprising Tennessee team were big draws, with Gonzaga, Texas and Tennessee being sellouts.
Bill Lofton, associate director of athletics management and finance at the U of M, says even the games the Tigers didn't sell out had great crowds.
"This is probably the best non-conference schedule we've had in years," Lofton says. "John (Calipari) knew the conference was going to be weaker this season so he beefed up the schedule. Plus, this team was fun to watch, even if they won by 30 points."
While winning games has brought fans to Tigers' games, the Grizzlies haven't felt the love this season. The team is averaging 15,993 fans and almost 400,000 fans have been to games this season. Last year, the first in FedExForum, the Grizzlies averaged almost 17,000 fans per game and drew more than 600,000 for the season.
Dolich says the Grizzlies and Tigers have put together the most successful college/pro combination in the country, with the Grizzlies having the eighth best record in the NBA and the Tigers winning the Conference USA Tournament, getting their first ever No. 1 seed in the NCAA Tournament and advancing to the Elite Eight. Other cities with pro teams that share their arenas with college teams (Chicago and New York) haven't had that same success.
"Both of our teams are flying under the radar," Dolich says. "It isn't Dallas, L.A. or New York. It's us."
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