Los Angeles can roll out the welcome mat for space marines, elves and blue hedgehogs for the next three years.
The organizer of the E3 video game convention is expected to announce Monday that it has signed a contract to keep its annual event in Los Angeles through 2015. The deal ends a yearlong standoff that threatened to end the city’s 16-year run as the event’s host.
The Entertainment Software Assn. said in June that it would take E3 elsewhere unless it received assurances that construction of the proposed Farmers Field football stadium on Los Angeles Convention Center property would not disrupt the weeklong annual convention held at the convention center. Other cities vying to host E3 were New Orleans, New York, San Francisco and Chicago.
“We felt it was important to remain in L.A. because the city is the entertainment capital of the world,” ESA President Michael Gallagher said in an interview. “We're very pleased we could make it happen.”
E3 has been among L.A.’s most lucrative conventions. At the event this June, for example, 47,500 attendees generated an estimated $40 million in direct spending on such things as hotels, taxi and car services, parties, restaurant meals and hundreds of temporary booth employees.
But negotiations to renew the contract with the city snagged when the ESA expressed concerns that proposed stadium construction could disrupt the show. Those worries are hypothetical at this point. The City Council has yet to approve the stadium proposal. And AEG, the company spearheading the stadium project, has said it would proceed with four years of construction only after it receives signed commitments for an NFL team to play there. Plans call for AEG to build a new convention center hall over Pico Boulevard before demolishing West Hall to make room for the stadium.
E3 officials were also unhappy with the limited number of hotel rooms made available at guaranteed rates within the city. In addition, ESA members — which includeSony Corp.,Microsoft Corp.,Nintendo Co., Electronic Arts Inc., Ubisoft Entertainment and more than two dozen other game companies — balked at a new convention center requirement for exhibitors to employ contractors and workers from an approved list.
At the last minute, AEG broke the logjam by guaranteeing to halt any stadium construction during the annual show. Next year's E3 event has been scheduled to run the week of June 10.
“Working with ESA to provide the confidence in scheduling they have requested has truly been a collaborative effort,” AEG Chief Executive Tim Leiweke said in a statement.
Los Angeles Mayor Antonio Villaraigosa also intervened to broker a deal with the convention center that would allow exhibitors to continue using the same contractors they had this year. E3’s technical exhibits, the ESA contends, require firms with specialized skills and knowledge to set up the 55 miles of fiber optics needed to support on-site broadband Internet capabilities for tens of thousands of connections.
“My office was committed to doing whatever it took to keep the largest annual conference that the city hosts here for another three years,” Villaraigosa said in a statement.
Economic terms of the deal were similar to prior years, calling for the ESA to pay the convention center $1 million for each event. That rate is reduced to $1,000 if E3 attendees generate at least $450,000 in transit occupancy tax, which is tacked on to hotel bills. The ESA has never had to pay the higher amount.
“We’re booking every hotel room we can get our hands on,” Gallagher said. “Our members alone can easily fill 40,000 hotel room nights. That’s not including the 270 non-member companies that come to exhibit at the show.”