MGM exec questions LVCVA show biz programs

MGM Grand Inc., steaming forward on an $800 million mission to differentiate itself from competitors with big-name entertainment, has a new well-financed rival.

The hardest thing for MGM Grand Garden Director Mark Prows to reconcile is that the new rival -- SFX Live -- is indirectly financed by his own company.

SFX is in the first year of a three-year, $6.75 million deal with the Las Vegas Convention and Visitors Authority to bring nine special events to the city on weekends with traditionally low visitor counts.

The first event, the George Strait Chevy Truck Country Music Festival, put 42,000 fans in Sam Boyd Stadium May 8. SFX executives said 16,000 tickets were sold out of state, with 35 percent of them going to Southern Californians who turned the concert into a Las Vegas weekend.

Prows, speaking last week at a lunch meeting of the Las Vegas chapter of the International Association of Business Communicators, stopped short of demanding that SFX cut its ties with the LVCVA.

But it was clear that he has some concerns about the type of events SFX Live plans to produce and whether they would compete with MGM.

The LVCVA signed the multifaceted agreement with SFX earlier this year. The tourism agency is funded by room taxes collected from each hotel property.

"All I'm going to say is that SFX needs to be very careful and they must remember how they're funded and that free enterprise should be allowed to take its course," Prows said.

He said he doesn't want to see Las Vegas' entertainment product revert to a loss leader that draws people to the city with cheap seats. MGM's goal, he said, is to make entertainment a memorable experience for customers.

Attracting big-name acts and selling them at lounge prices is counterproductive for the entire city, he said.

Prows emphasized his point with a series of videos showcasing previous concerts at the MGM Grand Garden arena. He explained that Generation X -- the second largest demographic the company believes it serves -- craves entertainment. Baby boomers, who represent the majority of MGM's customers, make up 53 percent of its market and have the disposable income to buy top-dollar tickets to acts like the Rolling Stones and Neil Diamond.

Prows said MGM was responsible for breaking the single-day, single-event sales record for TicketMaster recently. The day tickets went on sale this month for Barbra Streisand's New Year's Eve concert was the biggest in TicketMaster's 30-year history.

The company is proud that its concert contributed to the record, Prows said, since entertainment is a cornerstone on which MGM is repositioning itself. The company is in the midst of the third phase of change in an $800 million makeover.

In addition to emphasizing big names at the arena, the company has built a new conference center, revamped its swimming pool complex, turned a promenade area into a "Studio Walk," remodeled the casino and sports book, rebuilt the front entrance and transformed an Emerald City display into an entertainment dome, with Studio 54 and the Rain Forest Cafe.

"We really have sent Dorothy back to Kansas," Prows said.

SFX isn't the only source of competition. Prows said 15 venues in Las Vegas have seating for 1,500 people or more for an event.

One of those is the events center at Mandalay Bay, which opened last month with a sold-out performance by Luciano Pavarotti.

John Marz, corporate vice president of marketing, said the Mandalay Bay events center doesn't share the concerns voiced by MGM about SFX -- for now.

"I think the first one they did at Sam Boyd (the George Strait festival) was not indicative of what SFX is going to do," Marz said. "My understanding from the convention authority is that SFX's main responsibility is to develop events that will benefit the entire city."

Marz said he envisions SFX organizing multiday festivals, like jazz events similar to those in Montreal and Monterey, Calif., that could be staged in venues all over the city.

"If it turns out to be just one-night concerts, then we could have a problem with it," Marz said.

Rob Powers, a spokesman for the LVCVA, said SFX's bottom-line mission is to help draw 6 million additional visitors to Las Vegas over the next three or four years.

"It was clear we needed some bold, innovative marketing programs to get those kinds of numbers," Powers said.

Since SFX is the largest producer of live entertainment events in the nation, the company is uniquely qualified to develop programs for the city, LVCVA officials decided. Last year, the company produced 13,000 events and sold 35 million tickets.

In addition to producing the shows, the company will advertise the special events and Las Vegas at several cities across the nation.

Powers said it's not SFX's intent to be in competition with any property, but to help all Clark County resorts prosper while the city works to fill more than 20,000 new hotel rooms.

archive