[editorial] The Best Choice for the Greek: Nederlander/AEG
Don’t believe the hype about how complicated the city’s decision is for who will run the Greek Theatre for the next 10 to 20 years. It’s actually pretty simple. The only confusing thing is why the city is prepared to award the contract to the vendor that guarantees much less rent and whose proposal includes some dubious conditions.
If Live Nation is chosen to operate the Greek, Los Angeles will lose out on at least $17.5 million over the next 20 years. Think about that for a moment: The only money that the city will ever get from this contract—money for our parks and recreation programs—will be at least $875,000 less every single year over the next twenty years, simply by selecting Live Nation over Nederlander/AEG. $875,000 is no small chunk of change, equaling about 2% that Recreation and Parks collects every year outside of city general fund dollars.
Additionally, the city’s hired consulting firm’s scoring of the two proposals weighted improvements to the Greek four times what it weighted guaranteed rent.
While Live Nation has promised to spend double on venue improvements compared to Nederlander/AEG, much of that is contingent on the city awarding the full 20 years of the contract. If, after 10 years, we are dissatisfied with Live Nation and end the contract, we will lose $15 million of Live Nation’s $40 million in promised improvements. What’s more, Live Nation pads their bottom-line dollar amount with contingencies and operational expenses, and as a result, the city has given them a much higher score.
Finally, Live Nation’s proposal includes a provision that it can take money out of its guaranteed rent minimum—the only money the city will ever get from this contract—if anything goes wrong with their venue improvements. This is a provision that the city explicitly barred in its request for proposals but now appears ready to accept.
Live Nation would charge 10% more for its tickets than would Nederlander/AEG and it would give the city a smaller share of its revenues. While Live Nation is entitled to make a healthy profit for operating the Greek, the city is now prepared to give control of this significant resource over to a vendor who has outright promised to give less of its profits to us, all while we continue to see cuts in what few parks and recreation programs remain.
Over 30,000 people signed a petition asking the city to back Nederlander/AEG because we’ve seen how they have worked with the community. They are in this to provide a quality product, not just to make a hefty profit, and they have a proposal that is worthy of this incredible venue. That is why the Los Feliz Neighborhood Council has voted unanimously to support Nederlander/AEG and that is why I ask you to write our local city councilmembers, Mitch O’Farrell and Tom LaBonge urging them to do the same.