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The potential for destruction is made greater by the disparity in the two theaters' costs. The Fox Theater isn't required to be union. The Paramount's three in-house unions not only increase the theater's operational costs, but also hurt profits for the promoters. With cheaper labor, it's likely that Another Planet Entertainment will be able to outbid other promoters to draw shows to the Fox. Stewart says the average labor cost for a concert at the Paramount is about $15,000, while the same concert with nonunion labor would only cost $7,500.
The Fox also benefits from the billboard revenues earmarked for the School for the Arts. The billboard money essentially subsidizes costs for the for-profit operator, Another Planet Entertainment. The nonprofit Paramount, which offers more community-oriented programming, such as high school graduations, it does not get such a benefit.
In addition, the Fox will earn twice as much as the Paramount for every ticket sold $2, versus the Paramount's $1. Although this facility fee is passed on to consumers through ticket prices, Another Planet's lower labor costs should enable it to make more money per show.
Paramount board member Killian says these advantages are not fair. "On the one hand, the Paramount is supposed to be self-sufficient and has to compete in the marketplace, whereas the Fox will receive a huge subsidy that will alleviate any concerns relating to operating costs, and the only one who will benefit will be the hired promoter. What we've said to the city is just treat us the same as you treat the Fox."
It's About the Patrons
Programming is one area in which the two facilities are likely to differ. Another Planet Entertainment was formed in 2003 when then-president and CEO of Bill Graham Presents, Gregg Perloff, left to form his own company. With years of experience in the business, Perloff has booked some of the world's biggest acts, including Bob Dylan, the Dave Matthews Band, and Bruce Springsteen. Today, the Berkeley company promotes the Greek Theatre in Berkeley and the Independent nightclub in San Francisco.
According to the study by Economics Research Associates, Bay Area venues with exclusive promoters, such as the Fillmore and the Warfield, far outbook places that lack such a relationship, such as the Berkeley Community Theatre or the Nob Hill Masonic Center.
In recent years, the Paramount has been an exception to this rule. Stewart is largely responsible for boosting the Paramount's concert count over the years, but she views the Paramount as a community asset rather than just a concert hall. The theater books some of the most diverse programming in the East Bay including a lecture series, symphony performances, high school graduations, films, plays, and musical acts from a range of genres.
Still, concerts at the Paramount which are responsible for the bulk of the theater's revenue tend to serve an older clientele. For every young act, such as Nelly Furtado, there are many older acts, such as Al Green, Jeff Beck, Lionel Richie, Anita Baker, Brian Wilson, Gladys Knight, or Lucinda Williams. In the last three years, Another Planet Entertainment has booked five concerts on average per year. Those shows tend to be among the Paramount's more lucrative events.
"The Fox will have more bands that appeal to a younger demographic, a more active crowd," said Perloff. "While there's some bands that will be able to play both buildings, the Fox is being set up much more as a club-like atmosphere. The Paramount is a formal theater."
Perloff has told Stewart that he "absolutely intends" to continue to book shows at the Paramount, although some board members are dubious about that claim. After all, Another Planet would only get a portion of the ticket sales at the Paramount, versus all the food and beverage sales at the Fox. Perloff sees the Fox's main competition as the Warfield Theater in San Francisco, which is run by rival promoter Live Nation, formerly Bill Graham Presents. The Warfield's upcoming calendar features decidedly popular acts like the Beastie Boys, Amy Winehouse, Rilo Kiley, and the Bravery that draw younger, drinking crowds.
Many of the Paramount's shortcomings, as with its charms, are inherent. Today's music patrons want the freedom to walk around instead of being tied to a seat. "People want that open-floor experience," agreed John Anagnostou, co-owner of the Fox Theater in Redwood City, once part of the same chain as Oakland's Fox. "People like to participate more than spectate."
Even given the Paramount's fixed seats, board member Boisvert believes there are other ways the Paramount could make itself more attractive to fans and promoters. The theater only has two bars and neither is very accessible; one is on the mezzanine and one is in the lower level. Even when concertgoers find the bars, they have to chug their drinks before returning to their seats. Considering that most successful theaters rely heavily on ancillary products for revenue, this is a huge missed opportunity, says Boisvert.
Anagnostou says allowing drinks in his theater "at least doubles, if not more" his revenue. The Redwood City Fox Theater is in the process of upgrading its concession stands to allow alcohol throughout the theater, after witnessing the success in his adjacent Little Fox nightclub.
Even Paramount manager Stewart realized this when she first arrived at the Paramount. "I noticed we didn't sell bottled water," she said. "People would come in either with their own water bottles or they would go to the water fountain. And I thought to myself, well, why aren't we selling it?"
So when Britney Spears played there in 1999, Stewart drove her husband's Jeep to Smart & Final and bought 21 cases of bottled water. She also decided to allow the fans to bring the bottles inside the theater. Originally bought for 25 cents per bottle and sold for $2.50, the water sold out.
"It was funny because one of the board members says, 'Leslee, you're brilliant,' Stewart remembered. "Of course, I was brand-new. And I said, 'Well, thank you. Well, I have to tell you everyone else is doing it, so I'm not all that brilliant. It's just something we haven't done.'"
In 2002, Boisvert convinced the Paramount board to pay for a study on possible sponsorships at the theater. According to the report, the opportunities were worth more than $400,000 per year. But board president Tom Hart says the findings weren't sufficient.
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