Arena Honored Again

February 13, 2006
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GRAND RAPIDS — Since Van Andel Arena opened in 1996, many have called it a world-class facility — and deservedly so, as the building was recently ranked by Billboard Magazine as the sixth highest-grossing venue for mid-sized arenas on the planet in 2005.

"We are excited to maintain a place on Billboard's chart year after year," said Rich MacKeigan, SMG general manager.

For the first time since 1998, though, Van Andel Arena didn't find itself in the top five in the latest ranking, which was based on events held from November 2004 through November 2005. From 1998 through 2003, the arena finished No. 1 four times and No. 2 twice on the annual list. And in 2004, the arena was fourth worldwide for buildings with a seating capacity from 10,001 to 15,000.

But grosses were down in 2005 and not just for Van Andel Arena, which reported about $2.5 million less last year than in 2004. The entire top 10 listing of mid-sized venues, three of which are outside of the United States, had $21.3 million less in gross revenue in 2005 than the previous year. (See related chart.)

So a lower gross isn't exclusive to the local arena; it's also occurring in other locales. But why? MacKeigan recently told the Convention and Arena Authority, which owns the arena, that there were two factors coming into play: one, the concert audience was changing, and, two, fewer artists were touring.

Ticket buyers are getting younger, and MacKeigan said that growing group favors individual songs that they download into their iPods instead of albums produced by a favored artist. So their loyalty is more in tune to a specific sound, which can change at any moment, rather than a specific group, which can carry a large and dedicated number of fans for decades, as the Rolling Stones and the Grateful Dead have.

"Fewer and fewer artists are touring. They have a big hit and the incentive to tour isn't there," said MacKeigan of his second point.

Halfway through the current fiscal year, Van Andel had slightly more than $2 million in total income and net revenue over expenses of $343,179. Total income for the year is down by $140,000 from the forecast at the midpoint, while net revenue is almost $197,000 lower than what was projected last June.

Total income was about the same as a year ago. But net revenue was much higher in FY2005 at just under $500,000, and that figure was roughly $200,000 under what was budgeted.

To stop the revenue slide, CAA Chairman Steven Heacock suggested that SMG try to book more country artists, as they have an older and more dedicated following than rock performers. He also said that the arena should book more diverse acts to draw a new group of ticket buyers to the building and curtain off a portion of the arena to host smaller shows in the building.

MacKeigan told the CAA he didn't think the arena would be able to play catch-up over the second half of the fiscal year and make up the difference between the actual net revenue and the projected figure, because there aren't enough artists who are touring.

"We are definitely getting more than our fair share," said MacKeigan of the concert business, which is worth about $65,000 in gross revenue for each event.

"But we're still looking for more before the fiscal year ends," he added.

Pollstar Magazine supported MacKeigan's remark about Van Andel getting more than its fair share of business, as it ranked the arena 37th worldwide on its 2005 list of the top 100 venues of all sizes. The Van Andel sold 222,171 tickets in 2005, which was 21,000 more than in 2004.      

Ticket Revenue Down Worldwide

Total ticket revenue for Billboard magazine's 10 highest grossing, medium-sized arenas across the globe was down in 2005 by a substantial $21,370,312 from 2004.

Here is a listing of the top 10 arenas ranked by gross revenue for 2005 and 2004.

          

Venue 2005 Gross Revenue Rank Venue 2004 Gross Revenue

Boardwalk Hall, Atlantic City, N.J.

$15,862,550 Wembley Arena, London

$26,814,276

National Exhibition Centre,
Brisbane, Australia
$14,778,605 Boardwalk Hall,
Atlantic City, N.J.
$16,776,246
Entertainment Center,
Brisbane, Australia
$13,024,927 DCU Center,
Worcester, Mass.
$16,561,941
John LaBatt Centre,
London, Ontario
$12,982,388 National Exhibiton Centre,
Birmingham, England
$14,424,425
Ipayone Center,*
San Diego, Calif.
$11,812,788 Van Andel Arena,
Grand Rapids, Mich.
$14,150,371
Van Andel Arena,
Grand Rapids, Mich.
$11,595,413 Verizon Wireless Arena, Manchester, N.H. $10,861,041
Verizon Wireless Arena,
Mancester, Mass.
$10,079,859 Mandalay Bay Center,
Las Vegas, Nev.
$10,167,331
DCU Center, Worcester, Mass. $8,972,097 Sports Arena,
San Diego, Calif.
$9,964,602
Giant Center,
Hershey, Pa.
$8,760,994 John LaBatt Centre,
London, Ontario
$9,194,157
Patriot Center,
Fairfax, Va.
$8,375,166 10 Arena at GwinnettCenter
Duluth, Ga.
$8,718,729
Total $116,254,807 $137,635,119

Note: The IpayoneCenter was known as the San Diego Sports Arena in 2004. Wembley Arena was closed for renovation for much of last year and will re-open in April.

Source: Billboard Boxscore, January 2006 & January 2005

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