venues

Amid the sports memorabilia in Tim Leiweke’s office, there’s a small framed quote with the word “Motivation” at the top. Leiweke, the chairman/CEO of Oak View Group (OVG), is a 45-year veteran of the estimated global $25 billion concert industry who spent the pandemic building seven new arenas — five of which his company owns and operates — so he’s not one to hang inspirational thoughts from Wikiquotes on his wall. “Motivation” is followed by a question: “How does ASM differentiate itself from its main competitor, Oak View Group?”

The answer comes from Ron Bension, president/CEO of ASM Global, and the most salient part reads: “There are other companies that are noisier, but we’re managing more buildings, with more content from Live Nation and AEG than anywhere else in the world.”

Oak View Group and ASM are indeed competitors in managing facilities around the globe, and it’s important to know that ASM is co-owned by sports/live-entertainment company AEG, where Leiweke was CEO until his “mutually agreed upon departure” in 2013 from the company owned by billionaire Philip Anschutz. Leiweke, 66, says he wishes Anschutz “nothing but luck,” but he also says he carries a copy of Bension’s quote in his backpack and reads it before every presentation he makes. “Never piss off your competitor,” he says with a broad smile. “I thank Ron daily that he has decided it’s me that causes him success. Maybe that motivates me as much as it motivates him.”

In 2015, Leiweke partnered with multisector music magnate Irving Azoff to build a company that now manages approximately 500 facilities. OVG employs 5,000 people full-time (including Leiweke’s daughter, Francesca Bodie, who is president of business development), with another 35,000 part-time staffers.

The arenas OVG has built in the last 18 months include Climate Pledge Arena in Seattle; Acrisure Arena in Palm Springs, Calif.; CFG Bank Arena in Baltimore; and UBS Arena on New York’s Long Island. “We did it in the middle of COVID, inflation, rising interest rates, labor issues, political issues,” he says.

OVG is working on multibillion-dollar projects in Las Vegas; Manchester, England; and, in partnership with Live Nation, São Paulo, and Leiweke says it’s time for the music industry to recognize the crucial role companies like his play in fan satisfaction. “Everyone talks about the promoters, the agents and the managers,” he says. “The brick-and-mortars and the fan experience are equally important. We’re spending tens of millions on acoustics and air-handling systems that deal with things like COVID. And yet people underestimate our passion for how important that is to the live experience.”

“We did a lot of boxing in the AEG days,” Leiweke says. “I’ve got signed globes by Wladimir Klitschko, Lennox Lewis, Oscar De La Hoya. I don’t know how many gloves I have.”

Joel Barhamand

How did you get the Long Island Railroad to open a station at your UBS Arena?

Paid for it. Our landlord and our partner is the state of New York. We went through two governors and a lot of politics to get the deal done. If you look at all the other facilities in the New York area, except for [Madison Square] Garden, Citi Field was built with bonds issued by state and city authorities. The Meadowlands [in New Jersey] was paid for mostly by taxpayers’ dollars. Barclays Center [in Brooklyn] involved bonds. That’s the nature of many of these projects. We were private. Us and [New York] Islanders [co-owner] Scott Malkin put up $1 billion privately to build that arena. Of that billion, roughly $75 million was a cash contribution toward that light rail station. It’s about developing a private-public partnership that works for everybody, which enabled us to get a lot more done there than most anyone else.

The opening of that station has made going to UBS convenient and environmentally friendly. Did sustainability play a part?

We happen to be very sustainable around here. UBS is LEED-certified. Our goal is to make that a carbon-neutral venue within the next couple of years. Obviously, we had the first carbon-neutral arena ever in Seattle. You cannot be carbon-neutral if everyone is driving there for every event. So mass transportation was highly important to us, to get somebody from Penn Station or Grand Central [in Manhattan] in a 30-minute train ride. It was also highly important for the viability of that building in a very competitive marketplace for arenas. You’ve got Prudential Center [in New Jersey], Barclays, the Garden and you’ve got us. We’ve got to find a way to get people in and out without it having to be about the Long Island Expressway.

What is the strategy behind building in secondary and tertiary markets like Palm Springs, Calif.?

There are small markets and big markets, and a combination of those deals is smart. Partially because in North America, the majority of big arenas are owned or controlled by an NBA or NHL tenant. They’re greedy, and they have a strategic value within that market that we don’t have, which is, if you want me to keep this team here, you’ve got to help me build or take over this arena. We’re going to get a few of those — Seattle and New York are examples — but we also have to find either A markets that don’t have an anchor tenant, which are few and far between, or B markets. The business proposition in a B market is just as good as an A market because we can build an arena there for between $200 million and $300 million. I’m not going to get the 86 nights of music that I’m getting in Seattle, but Irving and I can live with 40 nights of music in Palm Springs. And then, we happen to have probably the most financially successful American Hockey League team there this year with the Coachella Valley Firebirds. The mix of those two means we get just as good a rate of return on every dollar I invested at Acrisure as we will in Seattle. We love these B markets because there’s 20 of them out there compared with half a dozen of the A markets.

You’re seeing a lot of growth right now. When does what you do plateau?

It won’t be in my lifetime. There are 50 markets in the world today that need new arenas, but only 20 of them will make sense. I’m very driven by the rate of return that we get on our investment. Irving, the employees and I own the majority of this company. I have an investment partner in Silver Lake, and I’m very driven to get them a healthy valuation on this asset one day because they put a lot of money into it.

Memorabilia from the arenas that OVG has built and the sports teams associated with them. From left: hockey pucks from Climate Pledge Arena and the Seattle Kraken; a plaque from Baltimore’s CVG Bank Arena; a shovel from the groundbreaking for UBS Arena.

Joel Barhamand

You talk a lot about the importance of “alignment” with partners before the work starts. How has that benefited OVG beyond the seven arenas you’ve built? 

In Seattle, Climate Pledge Arena was a 50-50 joint venture between us, [Seattle’s NHL team] the Kraken, and [the team’s majority co-owner] David Bonderman. David and I were aligned on that vision for the arena from day one — before he got the team.

That is a city-owned facility, and we continue to be good partners and good neighbors with Mayor Bruce Harrell, Governor Jay Inslee, and county commissioner Dowe Constantine. My brother deals with them every day on our behalf. We’re jumping into Memorial Stadium there because it’s the right thing to do for the city and the county and the school district. And so that alignment with the people I just mentioned has created a hell of an asset. Even though we privatized it, they own it. It has also created all kinds of other opportunities, including our new restaurant, event center and the bid we’re making on Memorial Stadium. And we’re just getting started. 

How much of an advantage is it for you that, once you build these venues, you can then bring in Harry Styles or the Eagles because of your partnership with Irving Azoff?

At the end of the day, we’ve got no chips with anybody out there. We’re not promoters, which means we get along with everyone. Louis Messina is one of my best friends. We have known each other most of our adult lives. I have a great relationship with Michael Rapino and everybody else at Live Nation. I like Jay Marciano. I hired Jay. I should be able to get along better with Jay, but there are other relationships at play there. As great as it is to have Irving as my partner, he’s only part of the equation.

Arena builds are not your only business.

We do 16 different services. I probably have 40 people in this company that work with every promoter, including some that route Irving’s tours for him. What makes us dangerous is, we are everybody that wants us to come in and bid because we’ve spent $4 billion building arenas. We’re going to do it better because we’ve got real skin in the game. We raise the debt on each of these buildings through my daughter Francesca and her division. We do the food and beverage, parking. We have a division called GOAL where we learn how to operate buildings more sustainably each year and rate them annually. We have 150 people selling naming rights and sponsorships every day.

How important are VIP packages and services?

We sell premium — suites and club seats. Premium and hospitality are still a huge growth opportunity. We’re just closing a deal on Rhubarb Hospitality Collection, RHC. They’re a high-end catering, food and beverage company based in London, New York and Berlin. They have one of the top restaurants in New York, Peak at Hudson Yards. We’ve also brought on Christian Navarro from Wally’s Wine and Spirits [in Beverly Hills]. When people come into our VIP areas, we want to create a whole different level for them. RHC is my fourth food and beverage company.

You’ve got a massive development in Las Vegas.

The biggest bet we’ve ever made is our project in Las Vegas. You could add New York and L.A. together, and they don’t do as much live entertainment as Vegas. It’s the live-entertainment capital of the world. But let’s look at the venues. There must be 10 nice theaters on the Strip. You need good arenas, too. T-Mobile was my last deal at AEG. It’s a nice arena, but it pales in comparison to what we just built in Seattle, New York and Austin. How do you have the No. 1 live-entertainment marketplace in the world and its arena is not one of the 30 nicest arenas in the country? You’ll hear about this soon, but we have a lot of world-class partners, brands and entrepreneurs who have come together to build out a 100-acre campus that will be the destination for live entertainment, culture, the arts and hospitality.

What does your overseas strategy look like?

The majority of projects we’re working on are overseas, like São Paulo with Live Nation. Thirty million people live in São Paulo. It’s a great music market. Latin music and K-pop are the biggest industry influencers now. We are also highly focused on Singapore and Asia; Lagos, because look at the artists coming from Nigeria. That’s where you’ve got to go for live music and culture and arts. We have a partner from Nigeria to build the single best arena in all of Africa.

You’ve also got Co-op Live opening in Manchester.

That is the capital of the U.K. for live events. That arena is going to be a top five arena in the world. When I opened up Staples Center in 1999, Bruce Springsteen was my opening artist for two nights, and the first night he told everyone, “Why don’t you come out of those corporate boxes and join us.” He didn’t have a great experience. I was like, goddamn it, the Boss just ripped me a new one from the stage. What he told me after the Staples concert is, “Tim, I like hot, sweaty halls.” When he opened up the CFG Bank arena for us in April, I said to him, “You’ve been running around my brain for 25 years because I failed you miserably.” Co-op Live is going to be the first music-only arena that is a hot, sweaty hall, and yet it will have 32 points of destination — restaurants, clubs and VIP spaces. It’s the first time we said, make it about music — make the bowl perfect — and then we’ll shoehorn in whatever else is important outside the bowl. Make all of the people right on the artist so it’s a hot, sweaty hall. I think that arena is going to change our industry. We’re sniffing around in Barcelona and Madrid. We want to go to the great cultural markets of the world where they have arenas that are 30, 40 years old and make those the next flags for the company. We have $2 billion to $3 billion of additional investment coming outside of Vegas and the projects we’re building in the U.S.

What’s your perspective on the Taylor Swift ticketing issue that Live Nation encountered? What could it have done better?

Ticketmaster did nothing wrong on Taylor Swift except for handling the demand, and we all knew that was coming. In a perfect world Taylor, Louis Messina and Ticketmaster would go back, take those dates and spread out the on sales. But at the end of the day it’s the bots and the scalpers that broke that system down. Did Taylor get any money from all of those secondary companies? Not a penny. Did the arenas or stadiums? I’ve spent $4 billion. Why is it that I let a secondary company come into my arena and resell my tickets and keep those fees? It’s a crime.

What are you doing to solve scalping and secondary-market issues?

I’ve got some ideas. In Seattle, we cleansed our season ticket list, our premium list and our club seat list. We got rid of anyone that was a scalper or secondary company so they couldn’t use the right of first refusal on concerts to tie those tickets up. Second is the bots. If an artist wants to be protected, we have to create smart tickets. And one day, your tickets are going to be here. (Holds up his hand.) We use the Amazon “grab and go” using your hand system. It’s not perfected yet, but within two years, it’s going to be phenomenal. Then we’ll be able to put the ticket in there and work a deal between Ticketmaster and Amazon. Just as technology has created the problem, so technology will solve the problem.

There’s also an outcry against fees.

They want to come in and say get rid of fees, but the reality is the fees are split by everybody in the pool. The artist gets some of the fees. Yes, they do. The building gets some of the fees and the promoter gets some of the fees. The fees are shared. There is an economic universe out there of rebates and waiving rent and giving artists free nights in the arena. That’s all part of this ecosystem of sharing fees. Everyone tends to forget about that. Ticketmaster does not even make the majority of fees. It’s not the fees. Should we tell people what the fees are in advance? That’s a good idea. But at the end of the day, if we want to attack what ultimately creates the majority of problems that people like The Cure or Taylor Swift feels strongly about, then attack the secondary companies who have no skin in the game.

“Shaq is our partner,” Leiweke says of NBA star Shaquille O’Neal, whose Big Chicken franchise is among the concessions found at OVG venues.

Joel Barhamand

Do you think Congress is focusing on the right players then?

Congress can’t even get a budget passed. Can they please just go run the country. Do I think they could solve the ticketing problem? No. These are the people saying it’s all Ticketmaster’s fault. No. Come learn the business, and what we’ll tell you is that the very same lobbyists you’re listening to that wrote that bill that you want to pass — they’re the problem.

The lion’s share of an act’s income comes from live shows. How much longer can we look at the live business as this sort of unlimited resource for artists, and whose responsibility is it to foster new arena and stadium acts?

How long can we maintain this ratio?  I think forever because as I said music is the essence of our life. The economics have shifted, but the demand for music, recorded music, hasn’t shifted. It’s streaming now, and the economics are different. But we now have more ability to get more music from more artists than ever before. That’s who’s developing the emerging artists, god bless them — those streaming services. Ironically, they took some of the economics out of what an artist makes but they’ve created tens of thousands of more artists now, and who would have ever guessed that today we’d be seeing these K-pop and Latino artists? I’m looking at some of the numbers we did for Grupo Firme and Rauw Alejandro. The amount of tickets that Latino artists sell is unheard of. The same with K-pop. We just did four nights of K-pop including Suga, and UBS sold out everything. We had record merchandise sales. We’re going to continue to see that, and I give a lot of credit to the streaming industry. That’s going to be the live pipeline. So, maybe the economics ultimately got kind of turned a little bit against the artist, but it’s created far more artists that can now go sell out arenas.

Will they come up through the clubs or go straight to arenas?

We have the theater alliance because I think that’s highly important. Clubs are highly important. Both Live Nation and AEG are doing a great job on clubs. I’m a huge fan of Bowery Presents, and we’d like to have a better relationship with them. We will one day when the personalities get shifted.  Will we keep going at the rate we’ve been going the last two years? Probably not. We’re seeing record rates, and we see it again next year. Our bookings are very, very strong for next year. But this is going to continue for a while because people have pent-up demand and discretionary income. I also think people went through Covid and said I’m going to go live life. Well, music happens to be something that relates to everybody. So, this isn’t going to stop. We’ll continue to develop smaller venues like Acrisure, which is a huge stepping stone for a lot of Latino bands. Everyone was scared of that marketplace except for Paul Tollett. I’m like, Paul’s pretty smart. I’ll follow his lead.

The same goes for sustainability when it comes to venues and festivals. You seem to be doing a lot on that front, but whose responsibility is it?

Sustainability is the overriding factor of this company. We spent $150 million on sustainability in Seattle saving the roof. I floated that roof in the air for three years. Everyone thought build a new arena, but that is the greatest waste of our planet — new steel, new glass, new everything. I thought, what if we reuse stuff? The arena’s roof is historic. It was originally part of the Washington State Pavilion at the 1962 World’s Fair. We figured out how to float it in the air with temporary steel supports, and I reused the steel. Then we took the front of the building and built an atrium system and a people-moving system to get everyone up and down. Take the existing arena, tear it down, build a hole three times as large, go down, not up because I use less energy below ground level. I don’t have to spend as much money on heating or cooling. Then drop the roof back on. Everyone says, “Oh, the renovation.”  I’m like renovation? This is $1.15 billion. Renovate my ass. The only thing that stayed was the roof, and then three of the four sides is the original glass from the 1962 World’s Fair. I preserved it, packed it, stored it for two years and then put it back on. Then I had to retrofit the glass with fiber for earthquakes because the earthquake standard has changed since 1962.

You and Irving Azoff were once rivals and now you’re partners. What does that say about the music industry?

Yo-yos. It’s up and down, up ad down. We were partners, then enemies, then partners. I’m hoping that cycle has played itself out completely. Michael Rapino and I fought aggressively against each other. We’re not best of friends, but I’d say in our business he’s one of the greatest partners I have. The music business is a unique business because everyone thinks they’ve got to be either best of friends or fighting each other. There’s no in-between. The drama in the music business is crazy. We’re drama free around here. Our job is to get along with everybody. That’s the good thing about being private. People say, “Do you get along with Phil?”  I wish him nothing but the best of luck. Whatever AEG does, I’m proud that I hired the majority of those people. And guess what, whether they succeed or fail, it will have little impact on my company. The greatest drama I had in my life is when Irving and I were fighting each other because he’s formidable. I’m very happy he’s on my side of the equation.