Operating in the Fox's Shadow 

The aging Art Deco Paramount Theatre is booking fewer shows since its neighbor remodeled.

Before Oakland's Fox Theater opened about a year ago, board members at the Paramount Theatre feared that the new renovated venue would take shows away from its Art Deco neighbor. And, it turns out, they were right.

The Fox Theater opened in February 2009, and this fiscal year, the Paramount Theatre will see a 23 percent decline in rentals, according to theater officials. During the Paramount's board meeting last week, General Manager Leslee Stewart blamed the Fox as well as the economy and the changing industry landscape for the decrease.

For example, she said that Live Nation, the huge promotion company that recently merged with Ticketmaster, is refocusing its efforts to book acts at its own venues rather than rent third-party facilities such as the Paramount. For the current fiscal year that ends June 30, the Paramount will have held only ten Live Nation events, two by Another Planet Entertainment (down from an average of about five three years ago), and two by AEG. Smaller, independent promoters, meanwhile, find that they lack the financial resources to compete.

Both the Fox and the Paramount are owned by the city, but the Fox is operated by a for-profit promoter, Another Planet, while the Paramount is operated by a nonprofit board. As a result, Another Planet has less of an incentive to book shows at the Paramount since it runs the Fox.

While the Paramount's endowment has increased from about $2.6 million last year to about $3.4 million this year, the theater needs those funds to keep afloat because it receives no city subsidy. The theater also is in need of expensive capital improvements, such as a new roof and paint job, so it may be forced to use its endowment toward those costs. The board expressed frustration toward the city at Wednesday's meeting for what they believe is continued preferential treatment for the Fox.

In an interview after the board meeting, Stewart said that about eight acts that performed at the Paramount in past years went to the Fox this year. Though she said it would be hard to determine what dollar amount the loss of those shows represents, it's likely significant. Stewart refused to release financial statements even though the Paramount is publicly owned, and is subject to the state's open records law.

Concerts have historically made up the bulk of the Paramount's revenue. Yet of the Paramount's 64 performances to date this fiscal year, only 14 were concerts (meaning music or comedy). Other rental income comes from the Paramount's Classic Movie series, religious services, symphony performances, variety shows, plays, family shows, ballets, lectures, and musicals.

Because of the formal seated setup of the Paramount and because the theater is simply a rental facility and does not have an in-house promoter, the theater's board says it's at a disadvantage in drawing moneymaking shows. Yet critics say the board could do a lot more to maximize the theater's revenue potential. Some believe the city should turn the Paramount over to a private promoter, much like the Fox.

In fact, the Paramount board once had an opportunity to possibly operate the Fox Theater, but because its proposal required a city subsidy, Fox developer Phil Tagami ultimately went with Another Planet, which is more aggressive in its bookings. When asked whether the Paramount would do anything differently in its booking approach or strategy in light of the Fox's success, Stewart responded: "This building is open with open arms and always has been for who would like to present — that hasn't changed."

The question now is whether the Paramount can continue the status quo next to the Fox in light of its capital improvement needs and the city's own financial problems and its apparent hands-off position toward helping with the theater's costs. As for the board's next move, the members agreed they would put their grievances in writing to the city.

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