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Grammy Awards Facing $6-8 Million Shortfall for First New York Show in 15 Years

There’s a reason why the Grammys Awards haven’t been held in New York for 15 years: The city is very expensive.

“The show is really looking good, but it’s a challenge,” veteran Grammys producer Ken Ehrlich says with a sigh. “Everything just costs more to do in New York versus Los Angeles, in terms of facilities, stagehands, hotel rooms, transportation, general expenses of the show — all of which we account for, but it’s just a different animal.”

New York’s first Grammys show since 2003, to be held Jan. 28 at Madison Square Garden, is the culmination of a two-year effort that was finally announced amid much fanfare in May. While the 60th anniversary show is projected to inject some $200 million into the local economy, based on an assessment by the Mayor’s Office of Music and Entertainment, long-simmering tensions between the city and the Recording Academy burst into the open last week with a Crain’s New York report that the production is $6 million to $8 million over budget. Academy president and CEO Neil Portnow confirms the dollar figure to Variety but contests the term “over budget,” preferring to describe the multimillion-dollar amount as “the delta of difference between holding the same Grammy Week in New York versus Los Angeles.

“The city had a list of ways they believed money could be raised to make it feasible [for the Grammys to be in New York], and that’s pretty much what we relied upon,” Portnow continues. “It hasn’t quite turned out that way.”

Julie Menin, the MOME commissioner who led the city’s effort to return the Grammys to New York, disputes that assessment. “Absolutely, the city did deliver everything it said it would,” she tells Variety, pointing to nearly $5 million raised in “contributions, union concessions and in-kind advertising” to help defray costs.

The devil, as is often the case, lies in the details. The primary points of contention are union givebacks and an Adidas sponsorship, both of which the Academy claims the city said it would deliver. While a representative for Local 1 of the stagehands union confirms that it granted around $250,000 to the Academy in relief, other expected union concessions did not come through. And while the city’s host committee secured $275,000 from Adidas, that falls far short of a full sponsorship. Official Grammy sponsors spend anywhere from $500,000 to upwards of $10 million, once sponsorship rights, on-air commercial buys, live events and talent fees are all factored in.

The agreement moved forward in 2016 after a plan to offset the added cost of presenting the Grammys in New York was outlined in a memorandum that the involved parties likely wish had been more explicit. Off-the-record conversations reveal conflicting perceptions over several matters, including categories of sponsorships. However, Menin says, “I don’t think there is [a misunderstanding]. I think the Grammys have made some changes to their show and they’re now looking to raise additional funding to cover that.”

“The city believed money could be raised to make it feasible to be in [New York], and that’s pretty much what we relied upon. It hasn’t quite turned out that way.”
Neil Portnow, Academy president and CEO

Music awards shows are notorious for featuring high-cost performances — witness Pink’s 2017 American Music Awards ballet on the side of a building in downtown L.A. — and this year’s Grammys are planning a similarly inventive stunt: U2 is expected to deliver a performance remotely during the telecast, possibly, according to Crain’s, from a barge in the Hudson River. Neither Portnow nor Ehrlich would confirm that nugget, except to say that they’re in talks with the band about a remote segment. But Portnow counters that the show’s production budget is separate from the added costs of doing business in New York.

One thing all parties can agree on is that a successful show and Grammy Week are far more important than a premature post-mortem. “It’s going to be a phenomenal show,” Menin enthuses. “We’re thrilled that the Grammys are here for their 60th anniversary — now we’ll just hope for good weather.”

Ultimately, Portnow says that one of the objectives in coming to the Big Apple was to spur a fresh direction. “When you do something regularly, it becomes predictable, and in entertainment that’s not necessarily good,” he explains. “Are there challenges [in that strategy]? You bet. But everyone’s up for it and energized and excited. I think we’re gonna look back and say, ‘What a great way to celebrate our 60th anniversary.’ That would give us a reason to consider [a location outside of Los Angeles] again,” he adds. “And New York’s not the only city that would be a candidate.”

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