February 2018 - Parks & Recreation - 51

shouldn't be the only factor. A big bag
of cash doesn't tell the entire story. Big,
which usually comes from the big player,
doesn't mean they will spend the requisite time to build the event, the market
or put the site on the map. Conversely, a
more nimble, smaller player, who may be
willing to spend the time, simply may not
have the muscle. Performance is equally
important, and it is critical to assess respondents' level of commitment.
Well-crafted RFPs in the concert space
ask respondents to describe their business history and current business, such
as the number of venues they control,
number of annual events produced, tickets sold and financial wherewithal. Certainly, these are important questions and
will shed light on the operator's ability
to perform under the contract. However, the ability to perform is only half
the question. It is equally important to
assess the level of focus and dedication

the respondent will commit to the new
project. Questions that require the respondents to address how the new venue
will fit within their current operations in
the market or how they will succeed as a
new market entry are essential.
How will the respondents maximize
the new project by leveraging, or how
will they address obvious conflicts arising from, these other operations? You
can require that the bidder not only provide for financial guarantees, but also include performance guarantees, such as a
certain level of admissions or number of
shows per season that are tied to financial penalties. This is certainly helpful,
but these will be too late and act as poor
substitutes if the event or venue doesn't
yield all the benefits you intended for
your various constituencies.
You are most likely looking beyond revenue for a viable operation that results in
a host of benefits beyond just the money.

Financial and performance guarantees
don't always ensure great performances,
but they are potential remedies if the operator fails. What happens when it is simply
more lucrative for the operator to put the
better shows in one of its other competing
venues where it makes more money even
after paying financial penalties to you?
A right to terminate isn't a great remedy
when it leaves your site tarnished and you
in a weakened position at the bargaining
table the next time around.
Don't rely on the remedies, buy into the
plan. It's not simply about your strategy
and objectives, but also about the bidders'. And, of course, once you feel comfortable about their commitment and plan
for the project, ask for solid financial and
performance guarantees, just in case.
Adam Friedman is a Live Entertainment
Consultant and Owner of Friedman
Entertainment Advisors (adam@
friedmanentertainment.com).

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Parks & Recreation

February 2018 - Parks & Recreation

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