Business
Pace on Earth
Houston megapromoter Pace Entertainment has built an empire stretching from Texas to Broadway, altering what we see onstage—and what we pay to see it.
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In a father-son interview in Brian’s office, the two men seem to personify the changes in the business. The contrast in their styles is striking. When Allen modestly attributes Pace’s rise to the top of the live entertainment industry to being “in the right place at the right time,” Brian quickly adds, “with the right skill set.” Spoken like a true MBA. The patriarch exudes a combination of easy charm and earnest enthusiasm, which helps explain his success in selling insurance. One gets the impression from Allen Becker that a deal could be sealed with a handshake, while with Brian, a team of lawyers would likely be involved. But then, as Austin concert promoter and venue owner Tim O’Connor says, “Twenty years ago, you could take more of a handshake approach.”
Today, the economics of big-time concert promotion have changed. “It’s no longer a business of buying an act, putting it on sale, taking the ticket money, and the act gets their share and we get ours,” says Allen. “It doesn’t work that way anymore. You need the other revenue streams: the parking, the food and drink.” In other words, you need the venues.
Allen gives Brian the credit for Pace’s timely push into amphitheater construction in the mid-eighties. With a few exceptions—like the Rolling Stones, Pink Floyd, and U2—most bands today would have trouble filling a stadium, and in the early nineties fans and many top performers began flocking to smaller venues in search of a more intimate experience. Starwood, outside of Nashville, was Pace’s first amphitheater, followed by the Coca-Cola Starplex Amphitheatre in Dallas and the Coca-Cola Lakewood Amphitheatre in Atlanta. Pace’s twelve “sheds”—ten of which are owned in partnership with Sony Music Entertainment and Blockbuster (a unit of Viacom), and two with MCA Concerts—give it an advantage when routing tours. “They can block-book a band into nearly a dozen U.S. cities at one time,” says Ray Waddell. And it doesn’t hurt that Sony has top-drawer talent under contract, including Springsteen, Dylan, and Billy Joel. While the artists aren’t obligated to perform in Sony-controlled venues, Pace has been chosen to promote their concerts.
Six of Pace’s sheds were built with some kind of public support. New Jersey contributed $26 million toward a $57 million amphitheater in Camden. Public financing also helped build Pace amphitheaters in Atlanta; Phoenix; Raleigh, North Carolina; San Bernadino, California; and Dallas. In an effort to keep the Dallas Symphony’s Starfest concert series and boost South Dallas’ economy, the city granted Pace and partner MCA unusual concessions to build their 20,000-capacity Starplex in Fair Park. The forty-year agreement Dallas signed with Pace commits $3.5 million to build and maintain the parking lot, yet the city receives parking fees only for non-Starplex events; moreover, although South Dallas gets 15 cents from every ticket sold for a Starplex event, and Pace pays the city at least $250,000 annually, Dallas does not share in the considerable revenue from the sales of concessions (food, soft drinks, and beer), T-shirts, and other merchandise. Two competing promoters—462 Inc. and Beaver Productions—were so outraged by Pace’s sweet deal that they sued the City of Dallas. “It’s insane,” one promoter was quoted as saying. “They [the city] gave away everything.” Both promoters eventually dropped their suits, 462 Inc. after Pace agreed to pay its legal expenses and allow it to co-promote some concerts at the amphitheater.
While the Beckers gladly take credit for the fact that the industry is consolidating, no one denies that the little guy is suffering. Smaller promoters say they can’t compete against deep-pocketed Pace when it comes to bidding for talent, and complain that Pace has been known to overpay for acts to gain market share. But, says Waddell, “There are a lot of factors at work. I don’t think you can blame the problems of small promoters on corporate promoters.” Ted Mankin, a president of Cellar Door—a Pace competitor and occasional partner based in Fort Lauderdale, Florida—seems to agree. “People who have amphitheaters definitely need shows to keep them busy,” he says. “They’re not going to sit on their butts and say, ‘Don’t want to do it.’ That applies to us, them [Pace], or . . . whoever.”
It wasn’t just small promoters who felt the pinch last summer. “The economics of the business are being squeezed to the point where everyone is losing,” says Brian Becker. From a promoter’s point of view, he says, “1996 was very possibly the worst touring year over the last ten years.” Competition from the Olympics hurt ticket sales, and unforeseeable events took a toll—including the death from an overdose of Smashing Pumpkins keyboardist Jonathan Melvoin and a hotel-room fight between the Gallagher brothers of Oasis, which led both bands to cancel Pace concert dates. “We’re experiencing about a twenty-five percent downturn across the board in ticket sales,” says Austin’s O’Connor, whose company, Direct Events, co-promoted the Dylan shows with Pace. “Believe me, if we could give you Bob Dylan for eight dollars we would, because you’d all come.” No such luck: The cheap seats went for $32, and the shows did not sell out. Promoters defend the higher ticket prices as necessary to cover their costs, which they say are being driven up by bands’ demanding a bigger share of the gross and—in many cases—unjustifiably high guarantees.
In Texas, according to Amusement Business magazine, which tracks ticket sales, Pace grossed $19.5 million at the box office through September (roughly the end of the outdoor concert and amphitheater seasons) versus $30.8 million in 1995. Nationwide, the numbers were rosier, with Pace grossing $96.7 million through September versus nearly $87 million last year, thanks in part to the opening of a new amphitheater in West Palm Beach and the acquisition of another in Holmdel, New Jersey.
In spite of the soft concert season, the Beckers say Pace did well this year (the company is privately held and doesn’t disclose financial results). The bright spot was Broadway, where Pace expects the $2 million to $3 million Dreams & Nightmares to gross more than $1 million a week during its five-week run, which ends December 29. Pace’s other production credits include a new American musical, Jekyll & Hyde, scheduled to open on Broadway in April, and The Who’s Tommy, which won five Tony Awards in 1994 and is currently running in London’s West End. With commitments to provide 25 markets with 350 weeks of theater a year, Pace needs product. “We try and invest in lots of shows in New York so we can have those touring rights,” says Zeiger. Pace has substantial investments in this season’s smash hit Rent, the revivals of Grease and Chicago, and the touring production of How to Succeed in Business Without Really Trying, as well as in three new shows scheduled to open next year: Webber’s Whistle Down the Wind, Cameron Mackintosh’s Martin Guerre, and Kander and Ebb’s Steel Pier, which is inspired by the movie They Shoot Horses, Don’t They?
What’s next for Pace’s father-and-son act? Last May, the Beckers established Pace Touring, which they hope will someday be an exclusive promoter of major national and international concert tours for superstar bands like the Rolling Stones, Pink Floyd, and U2. To that end, Pace hired John Meglen, formerly of Canada’s BCL Group, who toured the world with the Rolling Stones and Pink Floyd in 1995. That year, the Stones’ international tour grossed more than $225 million in ticket sales—nearly three times Pace Concerts’ total gross of $86.7 million. Says Brian: “That’s a business we aspire to be in.”
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