‘Amph Wars’ : Pacific, Irvine Meadows competition brings cartloads of cash to concert performers

The outdoor concert season is on again--that long, spring-to-fall campaign when 40,000-watt salutes rise into the Orange County night from elaborately lighted amphitheater stages.

“It’s great to be here, Irvine!”

“It’s wonderful to be back, Costa Mesa!”

Touring pop stars tend to utter such lines, or something similar, at every show, filling in the blanks at the end of the greeting to keep up with changing geography. But when they reach Orange County, there is good reason for the stars to be sincere in their gratitude. They’re stepping into the world of “Amph Wars,” where a uniquely fevered competition between two similar, closely situated outdoor concert bowls makes this a notably lucrative stop on the pop-concert circuit.

Acts that play Orange County can look forward to becoming the prize in auction-like bidding between the Pacific Amphitheatre in Costa Mesa (built and run by the Nederlander Organization, a national theatrical giant) and--just 11 miles to the south--the Irvine Meadows Amphitheatre in Irvine (where Avalon Attractions, the leading independent concert company in Southern California, promotes shows for the locally based private partnership that owns the amphitheater). The competition has been going on since July, 1983, when the Pacific Amphitheatre opened and ended the brief concert monopoly that Irvine Meadows enjoyed following its inaugural in 1981.

For the performers, the bidding war means cartloads of cash--up-front financial guarantees that, for the biggest names, typically exceed $200,000 a night. Lower-echelon acts that might command a going-rate guarantee of $25,000 a night in other major markets can triple or quadruple their up-front take in Orange County, according to booking agents and neutral promoters who track the Irvine-Pacific competition.

For the Orange County music fan, Amph Wars means a wealth of opportunity to see top acts attracted by all that cash. It also means having to pay for all that opportunity with ticket prices that usually exceed--sometimes markedly--what concert-goers pay for large-scale shows in such other affluent markets as Boston and San Francisco.

For Randy Phillips, Amph Wars meant having to take his home phone off the hook during a hectic couple of weeks in February. That’s when Phillips, who manages Rod Stewart, opened bidding for two Orange County performances by the veteran British rock star. Phillips says he was so besieged by back-and-forth proposals, arguments, cajoling and personal pleading from the Irvine and Pacific camps that he let his answering machine take over. Eventually, he booked Stewart into the Pacific Amphitheatre for a two-night stand coming up Friday and Saturday.

The fact that the Pacific holds 18,764 people, compared to 15,000 at Irvine Meadows, was one consideration, Phillips said. Another was his relationship with Alex Hodges, “a very old, dear friend of mine,” who happens to be the vice president in charge of West Coast concert promotion for the Nederlander Organization.

“For a manager and an act, the situation in Orange County is bliss personified,” Phillips said. “The acts are the blood that keeps these buildings alive, and you have these desperate, desperate people bidding for them. If you wanted to engineer a better sting operation, you couldn’t do it.”

If Irvine Meadows and the Pacific Amphitheatre are being stung, their customers are feeling the bite.

The best seats for Rod Stewart’s Pacific Amphitheatre shows cost $33 (none of the prices quoted include additional ticket-outlet fees or phone charge fees that can run from about $2.50 to $6.50 per ticket). Second-tier reserved seats for Stewart’s dates cost $27.50, and a spot on the Pacific’s vast lawn goes for $19.25 (Rod the Mod’s stock seems to be rising steadily in Orange County: when Stewart played the Pacific last Nov. 11, tickets went for $27.50, $24.75 and $18.15).

In answer to the Pacific’s Rod Stewart shows, Irvine Meadows has an early-season blockbuster of its own--an April 22 date by Bon Jovi, the hot-selling pop-metal act. For that, fans will pay $26.50 for a reserved seat, $21.50 for lawn space. If price is any indicator of performance, it should be a night to remember: Bon Jovi’s rates back in the real world include $18.50 per ticket for two indoor shows at the Forum in Los Angeles, and $19.50 for reserved seats and $17.50 for lawn space at the Shoreline Amphitheatre, a suburban outdoor venue between San Francisco and San Jose.

None of which seems to daunt Orange County fans bent on getting good seats for a favorite performer. All those expensive reserved seats for Rod Stewart are long gone, leaving only lawn space available to latecomers. As for Bon Jovi, the fact that he can be seen for substantially less in two other California appearances didn’t stop his Irvine Meadows show from selling out in an hour and a half, according to Brian Murphy, president of Avalon Attractions.

To Murphy, the bidding war between Irvine Meadows and the Pacific Amphitheatre makes Orange County the Disneyland of the concert promotion business.

“We start bidding in Frontierland, and we end up in Fantasyland every time,” he said.

In Bon Jovi’s case, Murphy said, “Pacific Amphitheatre put in a ridiculously high number, and I put in a ridiculously high number. The ticket price was a function of the guarantee.”

Acts that headline at indoor arenas in Los Angeles, Long Beach and San Diego “routinely” command twice as large a guarantee when they play outdoors in Orange County, Murphy said.

(Concert deals typically call for an act to receive a fixed amount-- the “guarantee”--unless ticket sales cross an agreed-upon threshold. Beyond that point, the performer receives a percentage of the take, which, for the hottest-selling acts, is commonly 5% or more. Industry observers say that acts capable of surpassing that threshold and tapping into percentage payments can earn about as much elsewhere as they do in Orange County. But the high guarantees in Orange County are still considered a prize, allowing acts to budget their tours with the certainty of an exceptionally large Southern California payday.)

In Rod Stewart’s case, according to Nederlander’s Hodges, the high ticket prices reflect both competitive bidding with Irvine and an acknowledgement that professional ticket brokers commonly acquire many of the best seats and resell them for several times their face value.

By putting “a little bit of a premium” on reserved seats, “you’re putting a little bit of the money that people will (otherwise) pay to brokers back into the (amphitheater’s) gross so the acts will get some of it,” Hodges said. “We find that everything in Orange County costs a tad more. I think our prices are in line with what is appropriate.”

Both amphitheaters make up for high talent costs by tacking an extra charge onto the price of a ticket--a fee that the venues don’t have to share with performers. At Irvine Meadows, this “facility surcharge” is $1.50 per ticket. At the Pacific Amphitheatre, the additional fee, known as the “state assessment,” adds $1.50 or 10%--whichever is greater--to the face cost of a ticket. The amphitheater keeps 79% of the assessment money and pays the rest as rent to its landlord, the Orange County Fair.

What audiences see on stage at Irvine Meadows and the Pacific Amphitheatre are the glamorous spoils of Amph Wars combat. The trench fighting is carried on far away, in offices where the lead instrument is the telephone, and the most important talent is a knack for negotiation and forging good business relationships with the managers and booking agents who decide where bands will play.

Nederlander’s Hodges fishes for talent from a large office above the lovely old Pantages Theatre in Hollywood, where he is surrounded by a colorful clutter that includes a transparent mailbox full of candies, an electronic exercise machine, a clock shaped like a violin, a bowling pin, a large ink drawing of Linda Ronstadt mounted on an easel, and some 40 gold and platinum records--tokens of clients’ thanks accumulated during Hodges’ 20-year career as a booking agent, promoter and band manager (Hodges, who took over last February as Nederlander’s top West Coast concert promoter, continues to manage the careers of rockers Stevie Ray Vaughan and Gregg Allman).

Speaking in an evenly modulated Georgia drawl, Hodges took a gloves-off approach as he presented his side of the Orange County amphitheater competition, trumpeting the Pacific’s advantages while willingly taking verbal pokes and jabs at rival Irvine Meadows and its promoter, Avalon Attractions. “Some of the things they reduce themselves to doing, I find offensive,” Hodges complained as he detailed what he sees as Avalon’s “negative campaign” to play up Pacific Amphitheatre’s ongoing court battle with neighbors over concert noise.

Avalon’s Murphy operates in more subdued surroundings: a gray-walled, gray-carpeted office in Encino where the only decorative feature is an abstract painting, and where business is carried on from a neat, Spartan-looking desk dominated by a computer terminal. Murphy maintained a carefully gracious tone as he talked about the Pacific-Irvine competition, sounding like a baseball manager who takes pains not to give the opposition any inflammatory quotes to tape on a clubhouse wall for inspirational purposes.

Unlike Hodges, a conversational battler loathe to concede any points at all to his foes, Murphy was quick to praise the Nederlanders--whom he described as “an established, organized, well-run entertainment family, the oldest in the country, so they are worthy competitors, to say the least.” But before the interview was over, Murphy, in his own milder way, had put on as partisan a defense of Irvine and Avalon as Hodges had mounted for his side.

“You have to be a fighter in this business,” Murphy said.

The two amphitheaters’ continual battle for the biggest pop attractions isn’t fought strictly with dollars.

“When you start getting up into the hundreds of thousands of dollars, $10,000 or $15,000 isn’t going to be enough to sway the decision either way if the decision is based on a longstanding relationship,” said Mike Piranian, a veteran booking agent for the Creative Artists Agency who regularly books clients into both amphitheaters.

Hence, Rod Stewart’s manager, who plays golf with Murphy, decided that, all things being fairly equal, he would do business with his friend. And the fact that George Michael’s manager, Rob Kahane, is a close friend of several members of the Irvine/Avalon team had a lot to do with Michael playing three concerts at Irvine Meadows last year.

Relationships aside, the Pacific Amphitheatre would seem to have a clear advantage when it comes to booking the biggest acts: it holds nearly 3,800 more people than Irvine Meadows.

Murphy tries to even out the size advantage by offering major bands multiple-night stands at Irvine, where he says it is easier for acts to achieve the status symbol of a quick sellout.

“When they come to a major market, the managers and agents and the people that surround the artists are interested that they sell out,” Murphy said. “And we have a tremendous track record of selling out dates at Irvine Meadows.”

“I’ve heard the argument used, and in cases where perhaps we have lost the act. But I think it is a hollow, meaningless, fairly ridiculous argument,” said Hodges, who has to dispose of more than 10,000 harder-to-sell general-admission lawn tickets before he can sell out the Pacific Amphitheatre (in terms of actual seats, Irvine has the advantage, with 10,418 permanent seats, compared to about 8,400 at the Pacific). Hodges says he tells managers that it makes no sense for an act to limit itself to 15,000 spectators when it has the potential for greater sales. “All they have to do is stop and hear themselves think, instead of my competition thinking for them,” he said.

On Avalon’s side, Murphy says, is a history of establishing links with bands when they are still club attractions, then working with them as they climb the pop ladder.

The Nederlander Organization, meanwhile, is known for concentrating on running its big summer venues, the Pacific and the 6,250-seat Greek Theatre in Los Angeles, and leaving the off-season, indoor shows to year-round promoters.

But that has been changing. “The fact that you were not promoting year-round made a difference in the action,” said Hodges, who as a booking agent regularly made deals with both Avalon and the Nederlanders until last February, when he took over his present assignment as promoter. “You don’t have the contacts, the day-to-day dialogue you might have with managers and agents.”

To make up for that weakness, Nederlander has embarked over the past few months on a stepped-up promotional drive, presenting shows at small Hollywood clubs like the Roxy and the Whisky, and putting on several indoor-arena concerts at the Forum, where Avalon previously had predominated. A byproduct of all this activity, Hodges said, will be firmer contacts and relationships with acts that could improve the Nederlander Organization’s position on the burgeoning southern front, where it fights its annual open-air war in Orange County’s affluent, fast-growing marketplace.

Financially, it appears that Amph Wars has been a war of attrition.

“Neil Papiano (Pacific Amphitheatre partner and attorney) and Jimmy Nederlander (head of the Nederlander Organization) have told me the Pacific loses money,” said Rod Stewart’s manager, Randy Phillips. “Bob Geddes (managing partner of Irvine Meadows) and Brian Murphy have said Irvine Meadows loses money. They all say that at the end of the season they lose $1 million.

“I don’t know if it’s true,” Phillips added, noting that amphitheater operators might want to plead poverty as a bargaining ploy in negotiating for talent.

Norb Bartosik, general manager of the Orange County Fair, said that he also has heard Papiano refer to losses “between $1 mil

lion and $2 million a year,” at least prior to the 1988 season, which promoters for both amphitheaters say was their best year financially.

“We have lost some big money,” acknowledged James M. Nederlander, chairman of the board of the Nederlander Organization. “I’m not at liberty to tell you how much. But we’re not discouraged with it. We are not making money, no. But we expect to.”

Stan Seiden, vice president of the Pacific Amphitheatre, said that talk of million-dollar losses is out of line. “There may be some losses, but in no way is it that much money,” he said. “It depends on how you look at it,” he said, noting that factors such as payments on the amphitheater’s construction debt affect profitability.

Geddes, the managing partner of Irvine Meadows, said that talk of losses of more than $1 million a year at his amphitheater is “not accurate.”

“We have had years where we have lost money, years where we have broken even, and years where we have done a little better than that,” he said. “But I would say the project would not be deemed a financial success. An investment of this size would typically generate a more lucrative return than Irvine Meadows does.”

Both amphitheaters are owned by private concerns that aren’t required to file public accountings of profit and loss. However, some publicly available figures indicate the revenues that each amphitheater generates through ticket sales.

United Leisure Corp., a publicly held company that subleases the 20-acre Irvine Meadows site to the amphitheater’s operators, reports in its federal securities filings that it receives 10% of Irvine Meadows’ gross ticket proceeds as rent.

Based on United Leisure’s figures, Irvine Meadows grossed $5.85 million in 1985, $4.09 million in 1986 and $6.33 million in 1987. Those amounts do not include revenues from the $1.50 per ticket surcharge, according to United Leisure’s president, Harry Shuster--which would add several hundred thousand dollars to each total. Figures are not yet available for 1988, but based on the amphitheater’s reported attendance of 500,000 for the year, it’s safe to assume that gross ticket sales were above the $9-million mark.

The Pacific Amphitheatre’s gross ticket proceeds can be estimated from the limited financial information it is required to share with its landlord, the Orange County Fair. The fair, a state agency, keeps track of the amount collected in “state assessment” fees--the additional charge, averaging slightly more than 10% overall, that is tacked onto each ticket.

Based on those figures, the Pacific Amphitheatre’s gross ticket sales, including state assessment fees, were about $6.63 million in 1986, $4.93 million in 1987 and $8.3 million in 1988.

Besides ticket grosses, both amphitheaters share in proceeds from such lucrative additional income sources as food and beverage sales, merchandising (those high-priced souvenir T-shirts, posters and programs), and parking fees. Last year it cost $5 to park a car at Irvine Meadows, $3 at Pacific. In a proposal that County Fair officials will take up later this month, Pacific management has requested that parking fees be raised to $5.

If the competition between the amphitheaters has hurt profits, the prospect of continued boom growth for Orange County keeps both sides determined to fight on.

“I think Orange County will be a stronger entertainment market” than Los Angeles, said Geddes, whose other interests include ownership of a San Diego radio station. “It could be in the not-too-distant future. Anyone who doesn’t foresee Orange County as a sleeping financial giant is not paying attention.”

The Nederlander Organization certainly is among those paying close attention: it is part of a group that has proposed to build and operate a new indoor sports and concert arena in Anaheim that would augment the Pacific Amphitheatre.

“Orange County is a terrific place,” Nederlander said. “Eventually, as the population gets bigger and bigger, I think it’ll turn around. We’ll both be able to survive.”

Meanwhile, promoters on both sides say they see little chance of the competition cooling down, although each side thinks its rival has a potential Achilles’ heel.

Hodges theorized that the sheer development value of the Irvine Meadows site off Irvine Center Drive may one day prompt the Irvine Co. to replace the amphitheater with homes or commercial space. But that may be wishful thinking on his part: While Irvine Meadows’ existing lease expires in 1997, the Irvine Co. and amphitheater owners have already agreed on terms for a 20-year extension.

“If we had a different use envisioned for the amphitheater, we wouldn’t have negotiated an extended use of it through 2017,” said Larry Thomas, Irvine Co. vice president for corporate communications.

“The bottom line is that we’re in the game and we’re not going away,” said Geddes, who also is a partner in Avalon Attractions. “We’re in it until 2017, absolutely.”

The Pacific Amphitheatre is in the game even longer than that, under a 40-year lease with the Orange County Fair that expires in 2023. However, fair officials have the right to buy out that lease in 1998, and every five years thereafter, at an unspecified “fair market value.”

The noise suit that neighbors are pursuing against the Pacific Amphitheatre is the only apparent wild card in what has been a closely fought competition. If the case results in court-ordered limits on amphitheater sound, the Pacific could have trouble attracting harder rock acts that don’t like being told to keep it down.

“It’s the only way that one is going to win over the other,” said Brian Murphy, who has the advantage of promoting shows at Irvine Meadows, far removed from any homes. “I don’t have the internal problems that Costa Mesa has. Whether you call it sound or inability to coexist with your neighbors, there’s a problem at Pacific Amphitheatre. If they don’t resolve that, if the citizens continue to make inroads, something is going to happen some day.”

For now, as the 1989 season warms up, it’s competition as usual as Amph Wars moves into its seventh year.

Gregg Perloff watches the battle from his neutral, comparatively quiet perch in San Francisco, where he is executive vice president of Bill Graham Presents, the Bay Area’s dominant concert company.

“There is competition in every city. In Orange County, it’s insane,” he said. “The difference is that Orange County is the only place that has two largely similar facilities. What we pay (in performers’ guarantees at Graham’s Shoreline Amphitheatre) is very similar to what they pay in Cleveland and Chicago and Boston. What’s different is what Orange County pays. If an act says, ‘We want $75,000 around the country,’ and that’s a fair going price, in Orange County it could be $200,000. It’s way off the Richter scale.”

So what would be Perloff’s approach if he suddenly found himself transferred to Orange County and placed in charge of promoting shows at Irvine Meadows or the Pacific Amphitheatre?

“I would open a scuba shop,” he said with a laugh. “It’s very difficult there. They go to work, they’re at war every day.”

AMPHITHEATER ENTERTAINMENT COSTS

1988 concert-going costs at the Pacific Amphitheatre and Irvine Meadows are higher than three comparably sized and situated outdoor amphitheaters in other affluent concert markets. Great Woods Center for the Performing Arts (15,000 capacity) is in Mansfield, Mass., about 30 miles south of Boston. Shoreline Amphitheatre (20,000 capacity) is in Mountain View, Calif., about 45 miles south of San Francisco and 10 miles north of San Jose. Jones Beach Theatre (10,500 capacity) is in Wantagh, N.Y., about 30 miles east of Manhattan.

Comparisons for Great Woods and Shoreline are based on full data for all 1988 shows. Figures were not available for all Jones Beach shows. Costs do not include ticket outlet fee or phone charge fee.

Shows in the survey included Bob Dylan; Barry Manilow; John Cougar Mellencamp; Jethro Tull; Linda Ronstadt; Sting; Bruce Hornsby; Steve Winwood; Julio Iglesias; Hall & Oates; Heart; Earth, Wind & Fire; Whitesnake; George Michael; Aerosmith; Kenny Loggins; Def Leppard; Eric Clapton; Grateful Dead; Bill Cosby; Santana; Rod Stewart; Randy Travis; Hank Williams Jr.; Robert Plant; Chicago; Beach Boys; Jimmy Buffett; Dan Fogelberg; INXS; Sam Kinison; Lynyrd Skynyrd; Tiffany; UB40; Crosby; Stills & Nash; Miami Sound Machine; Steve Lawrence & Eydie Gorme; Dirty Dancing; Moody Blues; Barbara Mandrell; Belinda Carlisle; Yes; Sade; Manhattan Transfer; AC/DC and Iron Maiden.

Average cost includes tickets plus parking for two people attending a show together.

Pacific Great Woods Higher in Amphitheatre Center Orange County Avg. Cost/Couple Reserved seat $45.80 $39.22 +16.8% Lawn seat $33.98 $31.10 + 9.3% Number of common shows: 22

Irvine Great Woods Higher in Meadows Center Orange County Avg. Cost/Couple Orchestra seat $54.82 $40.72 +34.6% 2nd level reserved $47.82 $39.46 +21.2% Lawn seat $39.50 $31.26 +26.4% Number of common shows: 11

Pacific Shoreline Higher in Amphitheatre Amphitheatre Orange County Avg. Cost/Couple Reserved seat $46.42 $41.96 +10.6% Lawn seat $34.16 $36.60 - 7.1% Number of common shows: 21

Irvine Shoreline Higher in Meadows Amphitheatre Orange County Avg. Cost/Couple Orchestra seat $52.90 $42.40 +24.8% 2nd level reserved $47.10 $42.40 +11.1% Lawn seat $39.20 $37.80 + 3.7% Number of common shows: 10

Pacific Jones Beach Higher in Amphitheatre Theatre Orange County Avg. Cost/Couple Reserved seat $45.26 $40.26 +12.4% Lawn seat $33.60 NA -- Number of common shows: 19

Irvine Jones Beach Higher in Meadows Theatre Orange County Avg. Cost/Couple Orchestra seat $53.00 $39.00 +35.6% 2nd level reserved $46.00 $39.00 +17.9% 3rd level reserved $44.34 $39.00 +13.7% Lawn seat $38.00 NA -- Number of common shows: 3

Costs of shows based on information from amphitheaters and Amusement Business magazine.

Estimated median Irvine/ Great Jones income for 1988 Pacific Woods Shoreline Beach Household income* $37,194 $31,303 $33,676 $39,241

*Based on Donnelley Marketing Information Services estimates for metropolitan or consolidated metropolitan statistical areas surrounding each venue.

Researched by Mike Boehm