[Updated] Hoping to alleviate at least some of its revenue challenges, the City Council Monday unanimously approved a motion for the Rose Bowl Operating Company (RBOC) to enter into a ten-year exclusive partnership with Anschutz Entertainment Group (AEG) for upcoming soccer matches held at the Rose Bowl.
The contract is subject to final agreement by both the Rose Bowl Operating Company and AEG.
According to Rose Bowl Operating Company CEO/General Manager Darryl Dunn, the events would increase the number of yearly “displacement events” to 15, but earn the Rose Bowl a “minimum” of $300,000 per event.
“It could easily go north of that,” Dunn told the Council.
Meanwhile, much of the Rose Bowl Company’s financial woes apparently stem from the overall decreasing interest in golf nationwide. Golf course revenues are part of the overall financial revenue scheme of the RBOC. Even as the Rose Bowl revenue increases, the golf revenue continues to decrease.
“The golf industry is shrinking,” explained David Sams, director of golf operations at Brookside Golf Course.
Sams’ assessment echoes many reports that the golf industry is in decline, as fewer people have the time to play golf.
In 2016, the total number of operating courses in the United States falling by 171 to 14,117, according to the National Golf Foundation. This was down 5.9 percent from a peak of nearly 16,000 courses in 2006.
Meanwhile, local activist and Allendale resident Nina Chomsky, reacting to the proposed agreement, voiced concern over additional matches staged on Friday nights.
“That’s the end of the world for our neighborhood on those nights,” said Chomsky.
Mayor Terry Tornek agreed, and asked the RBOC’s Dunn to include a “best effort” not to include Friday games in the upcoming agreement.
Dunn agreed, saying, “Tickets to Friday games don’t sell well.”
As noted in the Council staff report, the historic Rose Bowl has “a tremendous history of hosting soccer events at our venue, including the finals of both the men’s and women’s World Cups, the gold medal match of the Olympics in 1984, and COPA America in 2016.”
The iconic stadium has also hosted games for the national teams of the United States, Brazil, and Mexico. In addition, the stadium was home to Major League Soccer’s Los Angeles Galaxy from 1996-2002. In recent years, the Rose Bowl has hosted European club teams, including world-renown Barcelona, Real Madrid, Chelsea, Inter Milan, and Manchester United.
AEG has been an integral part of soccer programming at the Rose Bowl, beginning with the Galaxy playing at the stadium, as AEG is the owner of the franchise, the staff report noted. AEG has been involved in the marketing, promotion and securing almost every international soccer match held at the Rose Bowl, over the past few years.
Dunn also told the Council that with additional venue competition coming into the los Angeles market—the Banc of California Stadium, the LA Coliseum renovation, and a new NFL stadium in Inglewood—and said, “it is imperative that the RBOC officially align itself with a global force in soccer.”
As a founding partner in Major League Soccer and operator of dozens of soccer venues throughout the world, AEG is the logical partner for the RBOC. When soccer match promoters host an event in a market they almost always partner with an in-market Major league Soccer team to help market and execute the match.
A partnership with the Galaxy and AEG would ensure that when AEG or the Galaxy are involved in high-profile matches in the lbs Angeles area, that the Rose Bowl will be the host, said the staff report. Without such a partnership, soccer programming at the stadium—and associated revenues—could be significantly reduced in the next 10 years.
According to the basic framework of the agreement, The RBOC would be obligated to partner with AEG in all soccer matches at the stadium, and would not be able to host a soccer match that does not involve AEG).
According to the proposed agreement, revenue streams for the RBOC would consist of License Fees, Admission Tax, Concessions, Parking, and Premium Seating Per ticket fees.
In return for the exclusivity, and additional marketing and operational support, the RBOC will provide AEG with 30% of net revenues from all requisite events (excluding admission tax).
This portion of net revenues will, according to the staff report, “be offset by higher license fees charged to event organizers based on the additional services that AEG will offer, such as marketing, and match management, to the group promoting the event.