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MLB Clubs May Create Group to Promote Concerts PDF Print E-mail
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Written by Maury Brown   
Thursday, 31 July 2008 19:21
Fenway ConcertThe Red Sox owned Fenway Sports Group is in talks with the Cubs, Brewers, Giants, and Padres about forming a joint venture to assist in the purchase and promotion of concerts at their facilities. Concerts have become a continued source of revenue for clubs as they fall outside of revenue sharing. 

As reported by the Sports Business Journal, by getting into the concert business, MLB teams take on a considerable risk, that at the same time can garner huge payoffs. FSG has worked with concert heavyweights AEG and Live Nation. Now, a joint partnership would place more concerts in the ballparks controlled by those in the joint venture without the middleman. A joint venture by several NFL and MLS teams called Gridiron Stadium Network already has a similar consortium for their venues. As reported by SBJ (subscription required):

When booking acts directly from a tour producer or artist manager rather than renting, teams become promoters, assuming the financial risk for the concert by paying most expenses associated with producing it. Those costs easily reach seven figures, excluding artist guarantees, which can also hit $1 million for acts popular enough to fill stadiums.

Taking that risk opens the door for teams to reap a greater share of concert income, including a percentage of ticket revenue after production expenses are paid. Financial details for concerts are scarce, so it’s hard to pinpoint the profits that clubs could make, but country star Kenny Chesney’s tour is regularly bringing in more than $3 million in revenue at stadium dates this summer, according to published sources.

According to the report, the Brewers Enterprises, the wing of the Brewers that works on concerts and other non-game day events hooked up with FSG during the Red Sox Interleague play at Miller Park. The Cubs have had Jimmy Buffet and the Police at Wrigley, after seeing what FSG could do at Fenway Park.

The short and the long of it, clubs are ever increasing their reach into non-MLB related events where profit goes more directly to ownership due to not being tied to the revenue sharing system.

 
 
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