Alerus bets on Britney
Grand Forks is a special town in Britney Spears' scheme of things. It's the single-smallest metro area she's visiting on her Circus tour and one of the most remote, which means a lot with a huge staff and tons of equipment. She's demonstrated the...
Grand Forks is a special town in Britney Spears' scheme of things.
It's the single-smallest metro area she's visiting on her Circus tour and one of the most remote, which means a lot with a huge staff and tons of equipment.
She's demonstrated the ability to fill arenas to the brim wherever she goes, from New York to New Orleans, and with ticket prices that, on average, are higher than those offered at Grand Forks' Alerus Center.
Yet she's bypassing Minneapolis, where her tour sold out in April, and ignoring the Fargo metro area, which has double the population, and Winnipeg, Canada's eighth-biggest metro area.
So, what makes Grand Forks, a metro area of less than 100,000, so special?
Knowledgeable sources say the city-owned Alerus Center is guaranteeing that Britney makes somewhere in the $750,000 to $850,000 range, though one source said that's not something unique to this tour.
"We did not pay any more than anybody else," Alerus Center executive director Steve Hyman said, though he said he couldn't talk about the arrangement until after tickets go on sale Saturday.
He said he got the show because of a professional relationship with tour promoter AEG Live going back 20 years, from when he used to head the i wireless Center in Moline, Ill.
And, he said, he patched up a contentious relationship between the Alerus Center and the promoter dating back to a disastrous Fleetwood Mac concert in 2003, which was before his time.
Though there's a lot to be lost, there's also plenty to be gained, such as a stronger reputation with promoters and a big economic impact from 18,845 concertgoers.
Logistically, the Circus tour is a huge undertaking -- so huge the press releases gush about it, boasting a "cast of nearly 50 dancers, magicians, clowns and acrobats, and a traveling staff of over 200" and "an unprecedented 60 tons of equipment in 34 trucks."
The first North American tour, which started in March and ended in May, followed a somewhat erratic route. In some cases, it connected venues separated by more than 1,000 miles. The second North American tour, which includes Grand Forks, also follows an erratic route.
Spears and her tour entourage will be in Des Moines, Iowa, on Sept. 11 and in Grand Forks the following night, a distance of about 560 miles. The Twin Cities is on the way as is Fargo.
Then, from Grand Forks, she'll head south to Tulsa, Okla., 914 miles away. She'd shave off about 1,000 miles if she went directly from Des Moines to Tulsa.
Rob Sobolik, the general manager of the Fargodome, said the route is odd but not that unusual in the business. His facility has hosted shows that go straight from Chicago, bypassing the Twin Cities, and then heading south to the likes of Omaha, Neb.
"We looked at it," Sobolik said of the Circus tour. "We might have wanted it, but this time, it didn't work out." One building, he said, can't have everything.
The Alerus Center's other rival, Ralph Engelstad Arena in Grand Forks, didn't fight for Spears, either. The facility is physically too small for that kind of extravaganza, marketing director Chris Semrau said.
During discussion with Sobolik, he mentioned that the Fargodome doesn't have a concert fund like the Alerus Center. "There's a point that all buildings get to that they look at it and say, "Mmm, we can't go that high; feel free to head down the road. But those thresholds are different for each building."
The concert fund is a pool of $250,000, which allows the Alerus Center to take some risks in booking concerts without it having a direct impact on funds used for operating the facility. The Fargodome does take risks, but they could affect operations.
In other words, the Alerus Center may be taking a risk that the Fargodome, which enjoys a bigger market, isn't able to take, especially if it's taking a risk on other shows it already has.
But is the Circus tour a big risk? It's certainly got excellent track record so far, which, according to Hyman, surprised even the promoters.
In the average number of tickets sold for each concert, the Circus is the nation's top concert tour. According to Pollstar magazine, Spears sold an average of 20,498 tickets per show this year, which is 853 more than Bruce Springsteen.
In the average gross revenues, the Circus is second only to the superstar team of Elton John and Billy Joel. Spears grossed a little more than $2 million a show. Sir Elton and the Pianoman raked in $2.1 million.
The Circus has had a pretty consistent performance, too. Fan sites citing Billboard data indicates that, on the first North American tour, Spears sold every seat in every arena in the first 29 shows. Data for other cities are not available.
If Spears did the same here, she'd sell 18,845 tickets, grossing $1.5 million, not including revenue from tour merchandise such as T-shirts and CDs. The economic impact in Grand Fork County would hit $2.1 million, according to an estimate from UND's Bureau of Business and Economic Research. That doesn't include the impact of concertgoers dining out or shopping before the concert. The bureau is doing research to determine that pattern.
A big chance
"It's totally amazing," Hyman said. "Just to be given the opportunity was an eye opener and then to really talk seriously about it..."
On the other hand, he also said, "This is truly a litmus test for this regional market. Are we still a market?"
That is, is the Alerus Center still able to draw a crowd for a big concert from around the region? With the track record that Spears has, if ticket sales do poorly here that would not indicate she's got a problem with this market, but that the Alerus Center has a problem with this market.
"I'm telling you, the eyes of the concert industry are on us," Hyman said. He's holding dates for two other major concerts, he said, and what happens with Spears will have an impact on those concerts.
Nuts and bolts
Details of the deal that he struck with promoter AEG Live are not public, and AEG Live itself doesn't appear to have anyone that could talk to the press. A call to the company's Los Angeles headquarters yielded a confused response, and no one picked up at its Midwest branch in St. Louis.
Typically, promoters of major concert tours require a guarantee from the venue, according to economics experts Marie Connolly and Alan Kreuger. That is, the artist and promoter will make a certain amount of money from ticket sales and recover expenses such as unloading equipment and advertising in the local market.
If the ticket sales do not add up to that guarantee, it might be up to the venue to pay off the difference. That's how the Alerus Center concert fund lost $719,000 last year, after disappointing ticket sales to some concerts, such as Neil Diamond's in November.
So far, there has not been a huge transfer of money from the concert fund, which also is meant to subsidize operations, if necessary. The city finance office said it's only transferred $125,000 to the Alerus Center out of $250,000 the City Council authorized.
The way venues make money is usually through parking fees and food and beverage, according to Connolly and Kreuger.
If every concertgoer at the Alerus Center spent $10 on hotdogs and beer (soda pop for the younger Spears fans) and all 4,198 parking spots filled at $5 a pop that would gross the Alerus Center $209,000.
Hyman said money was not the lynchpin of the deal with AEG Live, but relationship.
The Alerus Center damaged its reputation with the promoter in 2003 after the Fleetwood Mac concert, which sold only 6,174 tickets out of 20,000.
For reasons still murky, the Alerus Center failed to pay AEG Live a six-figure sum, causing the promoter to blackball the events center.
"We paid our dues," Hyman said. "This is the same gentlemen that didn't quite get straight on Fleetwood Mac. We straightened that out with Neil Diamond, even though we took a hit on it."
If Spears does as well here as she did elsewhere, the Alerus Center also will get a rebound in its reputation as an entertainment venue, both with promoters and with its advertisers and suite holders.
"A community's resume is based upon what you do and how well you do it," he said.
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