In 1975, there were more than 40 concert promoters nationwide competing for the lucrative bookings generated by the top recording acts of the era.
Today, less than 15 promoters exist, all vying for a shrinking piece of the touring artist pie. And the future appears equally bleak for the individual promoter, who is facing stiff competition from the major conglomerates that control key venues and have the cash to attract big name acts.
But concert industry veteran John Scher, whose Metropolitan Entertainment has been a concert promotion powerhouse for more than 20 years, has seemingly ensured the future of his own firm by pacting with Odgen Corp. to form Metropolitan Entertainment Group.
Odgen, in exchange for a 50% interest in Scher’s firm, has agreed to invest nearly $50 million in the joint venture deal giving MEG and Scher a war chest with which to build arenas and expand the firm’s holdings.
Scher, who will assume the title of president/CEO of MEG and will oversee the operation of the full-service entertainment company boasting six divisions, has negotiated a settlement of his contract with Polygram Diversified Entertainment, to whom he had sold a 40% share of his comapny in 1991.
Though the Odgen pact ostensibly gives MEG a leg up in landing national tours of superstar acts by offering MEG’s expertise combined with the numerous venues under the control of Ogden, Scher says local promoters will not be bypassed.
“They know their markets and have relationships that a national promoter couldn’t possibly have,” said Scher. “They can get better deals and that translates into everyone, especially the artist, making more money.”
MEG will also tap into theater and TV specs, music-based series and specials.
In addition to developing new amphitheaters, MEG will also form a record label and homevideo arm, and will be involved in artist management.
To that end, Scher has made a trio of key exec appointments.
Music industry veteran Michael Leon has been named to head the record label and homevideo arm of MEG. Leon, a former veep of EMI Music in the international arena, will be charged with landing a distribution deal with a major label for MEG’s unnamed imprint.
Agency and production honcho Jeff Rowland will oversee the TV and theater projects. Rowland, who worked with Scher at Polygram Diversified Entertainment for four years, was instrumental in bringing to the stage the successful “Jelly’s Last Jam” and “Damn Yankees.”
And Rob Kos, who worked in the artist management division of Metropolitan, has been upped to veep of the same area of MEG.
Kos will have a mandate to step up the company’s presence in the music industry and sign acts to MEG.
“We’re going to get the maximum out of the opportunities we develop,” said Rowland. “Whether it will be creating musical cast albums from the shows we produce, or creating TV specials that become successful homevideos. Plus, we have a number of resources and a body of experience that nobody else has.”
Sources said MEG is close to inking a deal with PBS to provide the pubcaster with six music specials, and is in discussions with cabler Bravo to develop music-based programming.
MEG is also in talks with Japanese broadcaster NHK to coventure on music and entertainment programming in Japan.
But a deal MEG is close to landing with singer/songwriter Bruce Hornsby is indicative of the type of opportunities that MEG will seek. The Hornsby pact will have MEG produce a TV spec, which will spawn an RCA album and likely a homevideo that the label will help market.
By providing key tours with a TV special, a homevideo and a record album – all financed or co-financed by MEG – Scher believes he can revive the careers of once-successful artists whose popularity has waned, or break new artists by providing them the much-needed exposure that may not be available through other avenues.
But some industry wonks wonder just what Ogden purchased with the precedent setting pact.
Insiders note that Ogden’s inhouse concert promotion business has floundered under a lack of direction, but the company’s enthusiasm for the business remained high.
They suggest the Scher deal may now give Odgen a concert industry marquee name with contacts, but question whether Ogden could have just as easily beefed up its internal division with key hires.
But the lion’s share of the income derived from its entertainment sector comes from its food and beverage service and facility management contracts. Less than a third of the revenues generated come from concert promotion.
But Scher dismisses the criticism as “sour grapes,” and notes that the few companies with the capabilities of creating multipronged approaches to the business have failed to take advantage of the opportunities.
“Let (my critics) look at us a few years from now and if we’re successful. I’m sure you’ll see those guys stepping to the plate to do exactly what we’ve been doing,” said Scher. “The creation of MEG represents a giant step for fans and performers in the artistic pipeline.”