Not sure if you caught the story in the AL today about the Pavilion’s financials in 2012, but it didn’t paint a pretty picture about entertainment facilities in this town. Normally, the Great Hall at the Pavilion is a good money maker for them. Not so much last year. Ticket sales were down $290,000 in 2012 compared to 2011. Remember, this is a 1,900 seat facility, not a 12,000 seat facility.
My concerns about building a new Event Center has always been about how much we will have to support it. The Pavilion gets a $1.4 million dollar subsidy from the city each year. Can you imagine what kind of subsidy we will have to throw towards the Event Center?
I was talking to a local ‘journalist’ the other day about the possibility of Huether’s 2nd mayoral term (I still think he is running for governor, or at least exploring it). The one ‘good’ thing about a 2nd reign of terror by Huether is that when the subsidy numbers start rolling in, he would be in the middle of his second term, and he will have to do a lot of explaining about the profitability of the Event Center.
Can the EC do better then the Pavilion? Sure. But the Pavilion has been around for 12 years, and when your ‘money maker’ within your facility takes a hit like $290,000 in one year due to low ticket sales, you have to start questioning if the ticket sales will be there with the EC.
I felt all along we should have just dumped $20 million into the existing Arena and remodel it to look like a new facility instead of building an over-sized new facility.
You also have to factor in all the other competing sports entertainment facility that are popping up around town like pimples on a teenagers face. This will take sales away from the EC to.
We should have seen this a mile away.
But we NEEDED to be able to get Bieber! Oh wait, his baton has already been passed to One Direction, which will then be passed a few more times before the building opens. And then the current teen idol still will not play here. I’ve been preaching for almost a decade – the music business is different now then it was 20, 30, 40 years ago. There are few mass acceptance groups anymore, and the ones that do exist don’t tour 250 days a year like they did in the era of AC/DC, Cheap Trick, and Rush. The needed subsidies for Huether’s Folly are going to be astronomical.
As for the Pavilion, I could fix the ticket sales problem in 5 minutes. I may have an Argus blog on it tonight.
The EC is the leftover of a 1960’s battle for control in Sioux Falls. There were families in this town who hated the Arena when it was built and swore they would do it better.
We are getting a facility dreamed up in the 1960’s to show how advanced we are 50 years later. Just like so many things done here, the average citizen is supporting dreams, ideas and pocketbooks of the old guard
The EC is going to start out every year with $1.5 million going toward operating costs from Sanford naming rights and the sale of luxury suites. And they are not done with sponsorships yet. I think they will be OK.
Do you think a $1.5 million dollar subsidy is going to cover it? LOL. The Pavilion receives a $1.4 million dollar one every year. Granted, the Arts Center usually breaks even thru federal grants, the Science Center is a money pit and the Great Hall, usually ‘makes money’ The most, that I can remember, after the subsidy, the Pavilion has ever been ‘ahead’ is about $56,000. So if you think a 12,000 seat facility can skate by on a $1.5 million dollar subsidy, you are smoking some very good herb.
My somewhat subdued commentary for the Argus blog – http://toomanynotes.tumblr.com/post/49611124607/a-solution-to-declining-ticket-sales – which I’m sure will cause them to go crying to the editors. Just like in the Tempest days.
….$1.5 million going toward operating costs from Sanford naming rights and the sale of luxury suites.
How long does a corporation retain naming rights? For most, don’t be surprised if its one and done. The Tyson Center has been open nearly ten years and they still can’t name a half dozen acts that could have filled our own 6000 seat arena. Scott Hudson’s take on this is spot on and will come back to haunt those who think a 12000 seater will thrive.
Who is our major tenant? IF there are successful arenas they have one thing in common. Tenants that draw crowds. Ole slew….do you really believe a corporate sponsor of luxury seats will stick around long for a half dozen shows a year that put 4 to 6 thousand folks in the stands?
Rest assured, tdenny himself will prolly see to it the first show is a sellout…even if he has to give 6000 tickets away to his cubicle warriors at first premier bank card and Sanford. The real test and eye opening numbers will start to roll in in years two and three.
@Poly43 – When you sign a contract for 25 years, it is hardly a one and done. I don’t believe the three sponsors in the naming rights will go bankrupt any time soon. The corporations who bought luxury suites are in 5 or 10 years contracts.
The corporations who purchased luxury suites and loge boxes get to go to EVERY event, including hockey and football. The only events they are excluded from could be a concert or two or three where the promoter has a big name performing and will not let them in for free.
@Lewis — I didn’t say it would cover it but it is $1.5 mil they don’t have to take revenue from somewhere else and a pretty good start “going toward the operating costs”. Maybe you were doing a “little herb” when you misread my post :>)
Poly, there is already some behind the scenes maneuvering to create a fake sellout when the building opens. They want a local corporation to fund a show so that tickets will be next to nothing, which will create a false impression that more seats indeed mean lower ticket prices.
Something similar happened once before a few years ago when Elton John somehow sold out in under a minute. Word is that was because a certain medical facility did a huge buy before tickets went on sale.
Scott H…you and those who listen to you are the only ones who have any sort of grasp on “entertainment.” Ole slew will find out what a lot of Macarena have found out the hard way. There are damn few acts that can fill a 12000 seat arena, and those that can certainly are not going to stop at every cow town along the way.
If corp sponsors ponied up for 5 to 10 years then they will soon enough learn they were bent over. If OSFoot and whoever he is carrying water for think this thing is a win win…..well….all I can say is time will tell. Right now we have two very very minor league tenants that will call the place home. The storm and stampede. The stampede are in playoff and the arena is an echo chamber. The storm, at their peak, can sell out the arena. As they are presently playing, they will be lucky to put 3 to 4k in the place. I really cannot believe this is what suite and loge sponsors had in mind when they were sold this bill of goods.
Poly, they’ll counter you with the Summit League hype. Yes, that tournament did well this year, but even they didn’t need any extra seats. Plus, they had the benefit this year of two local teams advancing far. There’s no guarantee that will happen every year. In fact, it’s doubtful. The moment SDSU is eliminated the ticket sales plummet.
You act like people who bought luxury suites care what is going on down on the floor. They bought them to entertain clients and make even more money for their corporations and, in some cases, stockholders – Go Raven. Many won’t even care what the score is or who is playing.
@Scott – Summit League hype alert — If you read the paper you work for, the Summit League all sessions advanced ticket sales is already sold out for next year. And we don’t even know who is playing. If you go to the games, the women’s competition is getting weaker every year, esp with Oral Roberts leaving. It could easily be a SD final for a few years. The men’s will always be a toss up of about 3-4 teams so there may be years USD and SDSU will not be in the finals. That is just like every other tourney you watch on TV. Look at the stats. The Summit is one of the top selling tourneys. Out of 32 conference tourneys held this year the Summit avg was 11th out of 32 tourneys (5,606/game). NCAA Div I BB is going to be around awhile in SD.
Hey Poly43 – I carry my own water to counter the lame arguments made by people such as yourself who do not care to involve themselves in facts before they post comments filled with innuendo about a future that is unknown to any of us.
DL runs a great blog here. You know, a place to exchange thoughts without exaggeration and over the top hype.
esp with Oral Roberts leaving.
Ya spose? Why do schools defect the summit every year?
http://www.kansascity.com/2013/02/07/4054339/umkc-to-join-western-athletic.html
(5,606/game). NCAA Div I BB is going to be around awhile in SD.
Really??? Last time I checked there were 14 games in the tourney. That’s a real salty average of 3200 per game. Take the jacks out of the equation and even those lowly numbers plummet, and take the jacks point guard out and that’s prolly what’s going to happen.
Really does not matter tho. The summit champ will never be more than a 13 seed and 12 to 15 point underdogs regardless of who they play once they play real basketball teams in the regionals.
You act like people who bought luxury suites care what is going on down on the floor. They bought them to entertain clients and make even more money for their corporations and, in some cases, stockholders – Go Raven. Many won’t even care what the score is or who is playing.
~OSF
Good luck with that one. If I were a client I’d want to be “entertained” in an electric atmosphere. You gonna find that in a center where 3 out of 4 seats are empty? You’d do better taking your clients in your own backyard watching drunks fall in the river off cherapa’s baptismal steps.
Scott’s blog post said it all, we should be capitalizing on smaller facilities. I am still of the opinion we could have remodeled the Arena and made it a nice place an got what we needed. Another rumor out there that the Stampede is angling for an almost ‘next to nothing’ rental deal with the new EC.
It will be important to reelect Huether. He can take the executive privelege option if he’s not in office when the city faces bankruptcy. With our crazy form of government, Huether has all the power. If he’s in office, he’ll also get all the blame and face federal public funds fraud prosecution. He’ll never be governor but may run. It’s his excuse for escaping as mayor.
I’m still waiting for a legitimate reason why the Pavilion is down $300,000 in ticket sales. We’ve heard nothing but kudos as to the city’s economics, so they can’t use that excuse. There also wasn’t some one time giant show the previous year that would make it tough to top. It’s simply because their lazy booking practices aren’t bringing any acts that anybody cares about.
(Actually, didn’t the SFJB pull out this past year? If so, wouldn’t that be a good portion of it?)
PL – Funny you bring this up, a city official said to me yesterday, “Maybe our form of government in SF isn’t working.” I pretty much said, “Fucking Duh!” And pointed out that the home rule charter has been found unconstitutional in 3 supreme court cases. What more do you need. I also brought up the fact that the city hasn’t touched the old Oaks Hotel property with a 10 foot pole.
Just a few technical points, Scott.
First, as for that $300k, it’s worth noting that, at least as reported, that number lumps ticket sales in with admissions. Your characterization of it owing solely to ticket sales is self-serving in terms of your argument but is also inaccurate. I’m not sure if the Pavilion’s fiscal year is January-December or July-June, but it’d be worth noting, for instance, that the art gallery hosted exhibits by Norman Rockwell and Andy Warhol in 2011 and charged entry for both of those. We’d also need to consider Science Center and Cinedome admissions. In my opinion the Science Center is desperately in need of a refresher, and the Cinedome seems underutilized at best. But that’s another story.
Secondly, the kinds of acts that you referenced in your blog post are almost always rentals. The Pavilion would negotiate a flat rate for the space and services rendered, and the ticket revenue (minus processing fees, etc.) would go to the promoter. This is how the majority of events that occur at any PAC are run. It won’t matter, for instance, if Celtic Woman sells 8 seats or 1,800, the Pavilion’s cut will barely change. So even if they did more of what you suggested, that revenue would show up on an entirely different line of the budget. That’s yet another reason I’d be skeptical of hanging that $300k entirely on ticket sales – the Pavilion just isn’t on the hook financially for that many events outside of their own Performance Series.
Also, if a PAC had a dollar for every time someone said the answer to a revenue problem was to book more acts that particular individual likes, running one would be the easiest job on earth. As per Tori Amos, do you have any idea what she costs? I do. Accordingly, it’s no coincidence that her last tour did venues mostly between 2,500-4,000 seats, and that when a smaller venue was used, it was usually in a large city where one can score substantial earned media or where one can charge a premium for ticket prices. If the Pavilion sells 1,800 seats at an average of $50 a pop, that’s only $90k in revenue, and that’s before any costs are factored in. Washed up groups like the Beach Boys routinely charge mid-five figures. And any time the Pavilion tries to charge real-world prices, tight-fisted Sioux Falls audiences moan and complain about ticket prices.
Finally, when it comes to ticket sales, any PAC’s bread and butter is subscriber income. And like you alluded to in your post, that’s always a fine line between providing a set of performances that is diverse enough to capture the interests of many without being too eclectic that it pushes subscribers into becoming single-ticket buyers. And you’d much rather have subscribers, because those seats are guaranteed sold and the revenue is locked in.
My guess is that a couple of their Performance Series missed their target. I’ve heard that Billy Elliot was a bit of a flop, but I can’t speak to the others. Say you’re 300 seats short of goal and your average ticket price is $50. That’s $15k of red ink in one night. Do that a couple times and you getting to $100k mighty fast.
Fair enough on most of what you have to say, but I just have one reply. I threw out Tori Amos (and Westerberg) as a bit of an inside joke directed at a friend (although I saw Tori at the more-fun-allowed version of the Pavilion in Sioux City). And the lines about attending four shows was a self-deprecating slag at myself.
Truth is, I’m not self-centered enough to think the place should be booked for my individual tastes (although a ton of people do think anybody they like could fill the Arena). My point is that the bookings there are overly-conservative, and I’ve held that belief since the day it was opened. Not only that, from what I’ve been told from reputable promoters who have wanted to put the kind of shows that I mentioned at the building, the Pavilion is not promoter-friendly. The rent is way too high, and they show little desire to work with anybody.
Despite whatever errors you may feel I have, it is a fact that mid-sized facilities are the type of venues that are thriving in this time where music isn’t driving popular culture and radio playlists are shrinking. They can and should be capitalizing on that.
I agree that mid-sized facilities are great for a lot of these acts that can’t fill a 10k seat arena. The problem is that, by definition, we don’t really have a solid mid-sized venue in town. The Orpheum in Sioux City (to which I presume you’re referring) seats nearly 50% more people than the Great Hall. At 50 bucks a seat, that’s an additional $42,500 that facility can bring in for selling out the same show that the Pavilion might host at the same cost. That gives them a lot more options in terms of who they can present profitably. The Belbas Theatre is too small to be profitable for all but the cheapest of local/regional acts; there just aren’t enough seats to sell in there. And really, if you’re a group in that category, wouldn’t you rather play at our Orpheum? The Belbas is fine for recitals, indie films, kiddie plays, but it’s not exactly rock band ambiance in there.
As for rent at the Pavilion, I’ll stay agnostic on that issue, but would point out that on the one hand you’re expressing frustration about their revenue situation and then on the other hand you’re expressing frustration about how they generate revenue. If they start lowballing themselves on rent, all their other regular customers are going to want better deals too. And then they’re in the position of having to produce more events just to bring in the same revenue. In terms of production, I’m sure you can appreciate, for example, that it’s way easier for a facility to host one event that nets $30k instead of hosting 3 events at $10k each.
But on a couple notes of agreement, I’m familiar with criticisms you’ve made of the Pavilion on other posts here, and I think a lot of it is legitimate. I do think the Pavilion would be well-served to try and figure out some way to create events targeted at young professionals and Sioux Falls’ more urban crowd. There are lots of low-cost ways they could sell some booze and bundle some local live music in with tours of the art exhibits or maybe some TED-esque lectures. I think some of the hours they keep are ridiculous – what’s the point of having the Science Center, the Visual Arts Center and Cinedome if both are only open after 5 p.m. one night a month? Absent field trips, who’s using either of those facilities at 1 p.m. on a Wednesday afternoon? The Pavilion could learn a thing or two about customer-friendly hours, to be sure. (Oh, and has the Science Center replaced an exhibit in, like, ever? Walking through that faux TV studio is like revisiting MY childhood in the 80’s and 90’s. That place is one step from the second coming of Gigglebee’s. Hell, I half expect to see Wilbur scurrying around the place in that friggin’ coal car or whatever the hell he rode in.)
I also agree that the programming is overly conservative. But then again, I think a lot of that is on the fact that Larry Toll, as I understand it, was basically told to put more butts in seats when he took over for Gary Wood because everyone grumbles and whines about the Pavilion subsidy. So now we get lots of touring productions of B-cast Broadway shows. Gary really took the broader mission of the Pavilion to heart and was a real vision guy, and then had his legs chopped out from under him within 18 months by his Board when honoring that mission wasn’t raking in the cash in the throes of the recession.
Anyway, I’m all for expanding the Pavilion’s reach and making a broader array of activities available to people – whether it’s music, dance, theater, art, you name it. The question is, how do the fair people of this city react when they’re forced to realize that risk-taking in the arts doesn’t always pay off financially?
You act like people who bought luxury suites care what is going on down on the floor. They bought them to entertain clients and make even more money for their corporations and, in some cases, stockholders – Go Raven. Many won’t even care what the score is or who is playing.
~OSF
I’ve thought long and hard the past couple days about that quote. All these new event centers popping up across the country seem to have this quote as a central theme. We need a place to gather and wine and dine clients for corporate America. Never mind who pays for it. OSF….if you have a widget to sell, why not take your client onto the workroom floor, show how your widget is made and how well it works. Do you really need to “entertain” if your widget is that good.
In the meantime, I read in today’s pay leader corporate profits are at record breaking numbers and workers wages are stagnant. Some things just stay the same, or in our case getting worse. Soon there will be no middle class. Then who will fill those 12000 seats?
An example of the Pavilion branching out came to fruition a few years back when the city contracted a study on the facility. A couple of things stood out that the Pavilion has ‘yet’ to jump on.
1) Move the gift shop to the main floor
2) Diversify entertainment
3) Change business hours of the Science Center so working families can attend it at night during the week
4) Laser Light shows!
The 4th one is actually a gigantic money maker for science centers across the country who have cinedomes. But, as I understand it, the Pavilion has resisted because they think the ‘clientele’ that attends these shows are a bit ‘unsavory’. There has often been this ‘snooty’ attitude by the board that ironically started with the lady they named the Great Hall after. It’s gotta stop, if it doesn’t, expect the Pavilion to remain stagnant.
Hornguy, I probably wouldn’t be so critical at financial shortcomings if I felt the building was used up to its potential. I completely agree that the majority of the building is stagnant. I can’t imagine going to the exhibits more than a couple of times. WHen my kid was young, we had a great time the first visit. We returned a year later, and saw no reason to ever go back.
Back to live events, though. They should work with promoters on the rent. Two more shows per month at a reduced rent would generate more overall rent plus additional revenue generators. And when I say “more adventurous”, I’m being pretty conservative with that term. When your current booking is along the lines of Kenny Rogers, Barbara Mandrell and Michael Bolton, almost anything else would be considered “edgy”. We live in a time of the cult act, where a supposed household name doesn’t have that much advantage over a niche act with a strong social media presence. They could do well to try to tap in to people younger than 50, or those whose cultural knowledge extends beyond what local TV and radio tells them are popular.
Another thing to point out when it comes to the Pavilion is that the popularity of DT has exploded over the last 4-5 years with more 20-30 somethings coming DT. The Pav should be capitalizing on this crowd.
show me 1 NFL or MLB stadium that really makes money or breaks even by honest kitchen table math. They are all created via accounting fiction and as taxpayer welfare queens rolling in the transfer payments. Even the taxpayers have to shell out to bulldoze them when the fiction and a “new stadium” begins again.
@Poly43 – In most businesses, the widgets are too much alike. The smooze and booze sells much more product than a 90 minute workshop. We’ve all learned it from the gang in DC.
For clarification, I do not work for RAVEN, but I am a stockholder. I worked there for 18 years and it was a great work environment. Most government guys and high level clients expected the smooze and booze treatment.
My father worked at Raven until I was 12 or so.
So while Joe and Jane Sixpack subsidize the 12,000 seat echo chamber, these lucky logers are smoozin and boozin with little regard for what the “event” is?
What an upside down world we live in.
SDN Communications
Wells Fargo Bank
Dakota King, Inc.
J&L Harley-Davidson, Inc./McNally’s Irish Pub
DMG, Inc.
John Morrell and Company
Maguire Iron
Dakota Beverage
Hegg Companies, Inc./Silverstone Group
First Bank and Trust
Fiegen Construction Company
Argus Leader Media
Lawrence and Schiller
T&R Contractring
Home Federal Bank
So the AL asks its employees to take ‘unpaid leave’ every year, lay people off, but have money to sponsor a SF Bike Tour and a Loge Box? That place gets funnier by the day.
The Paywall leader may be cutting employees hours short and running constant help wanted ads in their own pages, but money for smoozin and boozin they got. Based on what they charge Joe Sixpack per column inch of Obit space, they can pay a years worth of Loge in a week.
When one entertains potential clients and obtains their business, ones business grows and with it you can give Joe and Jane Sixpack jobs. Kind of the way the world works. If someone does not trust you and feel they can talk to you, they don’t do business with you. Entertaining is one venue in the sales process.
And exactly how is anybody subsidizing the EC, except through the sales tax? So it is not just the citizens of SF subsidizing it, everybody shopping inside the city limits does.
The City now has $1.8 million/year from private corporations to go toward the operating costs. That is a pretty good place to start from.
……When one entertains potential clients and obtains their business, ones business grows and with it you can give Joe and Jane Sixpack jobs…..
Kinda like the ol Reagan trickle down economics? How’s that workin? There was a time a generation ago when only Joe had to work. Now Jane, by necessity also is working. Trickle down works great eh?????
…ones business grows and with it you can give Joe and Jane Sixpack jobs…
Most kids get the hell out of this town when the time presents itself. Why? Joe and Jane can’t afford to live here, not with the prevailing wage scale. There are 34,000 jobs in the SF MSA that pay less than $11.08 an hour. Most are jobs like this one.
http://www.siouxfalls.org/human-resources/employment/career-opportunities/finance-assistant.aspx