The tug-of-war over entertainment spending in North Dakota escalates this week with management changes at the Fargodome and a recent addition to the Alerus Center concert-booking team.
Such changes are almost certain to spur a more intense rivalry between the state's top two concert halls than in the past 2½ years since the Alerus Center opened in Grand Forks.
Egos, reputations and hundreds of thousands of dollars in potential revenue will be on the line for both facilities and for the communities of Fargo and Grand Forks, which continue to place a heavy emphasis on their buildings.
Last month, Global Spectrum management company was awarded a 5½-year contract with the dome worth more than half a million dollars. The company has promised to attract the biggest, best and most diverse acts to Fargo.
A division of a Philadelphia-based entertainment and sports company, Global Spectrum begins managing the Fargodome on Tuesday.
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This change comes just two months after Global Spectrum beat out competitor SMG, an East Coast firm that's had a hand in managing the dome for several years.
Meanwhile, SMG will part ways on a somewhat bitter note with the Fargodome. It wasted no time signing an agreement with the dome's prime competitor, the Alerus Center, to book major concerts in Grand Forks.
SMG President Wes Westley has said he was disappointed by the dome's reasoning behind the selection of Global Spectrum. As a result, SMG will take its expertise up north.
"I guess we'll see who books the best events," Westley said.
Dome well-positioned
Paul Johnson, executive director of the Fargodome, says the dome is well-positioned for anything that comes its way.
"By all means we're all out to maximize the number and diversity of events we bring to the facilities," Johnson said.
"But with our market size, with our building size, with our location ... if we have the same dates available (as Grand Forks), then more than likely the Fargodome will continue to be the top choice of promoters," he said.
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And no matter who does booking where, Johnson said there's still only a certain number of acts that will route their tours to North Dakota.
"The big winner in all this is the patron. They can decide which ones they want to go to," Johnson said. "The potential loser in all this is the venues that have to compete for the amount of acts out there. That competition definitely lowers the profit margin."
Charlie Jeske, Alerus Center executive director, said he has stayed out of the spat between the Fargodome and SMG but said he looks forward to having SMG working for him.
"Anytime you get a willingness like that, it's a plus," Jeske said. "We're hopeful they'll (SMG) get some big shows that will be good for them as well as us."
Rivalry not new
SMG won't be the first booking company or promoter to use the rivalry between the Fargodome and the Alerus Center to its advantage.
Both Jeske and Johnson say it isn't uncommon for promoters to pit the buildings against one another in an attempt to get the best deal.
Jeske said it's to be expected since Fargo and Grand Forks serve almost the same area.
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"Of course we want the shows as bad as they want the shows," he said. "It's what we feel is friendly competition."
But such competition isn't always good.
For one thing, it's led to a sharp decrease in the amount of money each building can charge to rent their facility for concerts and other events.
In 1999, the dome charged the Rolling Stones $43,888 in building rent -- the highest concert rental that year. Three years later in 2002, the highest rental charge dropped to $18,000 for Alan Jackson.
In 1995 for example, the Eagles paid $48,711 to rent the dome. When they came back to play last summer, they paid $13,000.
"When we had no competition, we could pretty much name our rental rate -- within reason of course -- and it would be accepted," Johnson said. "Now that's not the case."
In some situations, the dome does not charge rent. This happens when the dome co-promotes an event, rather than renting the building to a promoter or act.
"What we have to ask is, 'Is it better to take a risk on this concert and have the event' or have the promoter say, 'If you're not going to take the risk with us, we're not going to bring it in'," Johnson said.
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Susan Thompson, dome finance director, said this is more likely to be the case for a smaller concert that isn't guaranteed big numbers.
Still, lower rental rates are a contributing factor to the dome's decreasing overall revenue the past two years.
In 2002, the Fargodome ended the year with a $50,876 profit, about $300,000 short of what was budgeted. This was the smallest profit year in the dome's history.
In 2001, the dome ended the year with $194,646, compared with an all-time high of $708,761 in 2000.
Attendance lagging
Shrinking paid attendance is also a major reason the dome's bottom line has decreased.
In most cases, paid attendance and actual event attendance is not the same since complimentary tickets are often given to advertisers, dome employees, Dome Authority members and other guests deemed appropriate by the dome.
With some exceptions, the dome receives about 125 complimentary tickets per show from the promoter.
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Concert and event attendance -- specifically paid attendance -- is an area Global Spectrum has said it hopes to focus on improving.
Last year, despite having more concerts than in any of the previous five years, the number of paid attendees -- 5,470 on average -- was lower than ever.
In 2002, no concerts had a paid attendance over 20,000. In 2001, both AC/DC and the Dixie Chicks eclipsed the 20,000 mark. The Elton John/ Billy Joel concert earlier this year brought in 22,013 paid attendees.
The Fargodome normally holds up to 25,000 people for a concert, with possibly more depending on stage location. For example, George Strait played a round set, which allows for more seating.
Decreasing paid attendance numbers can be attributed to several factors, including an increase in quality and quantity of casino shows and festivals showcasing bands, Johnson said.
It all comes down to people having more options for spending their entertainment dollars, said Fargo Dome Authority member Marilyn Guy.
Coupled with an industry-wide hike in ticket prices, people tend to be more selective when deciding what concerts or events to attend, Guy said.
"You think about spending $75 or even $45 for a ticket, compared to Garth Brooks when we paid $20," she said. "There's just a lot of difference in terms of people being able to do that when they go out."
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Ticket prices now generally range from $25 to $75. In 2002, the highest ticket price was $96 for the Eagles concert. Tickets for that event started at $56. When the Eagles played the dome in 1995, the highest ticket price was $25.75.
This year when Billy Joel and Elton John played at the dome, ticket prices ranged from $45 to $140.
Keeping ticket prices down is another issue Guy said she hopes the new management company, Global Spectrum, will be able to tackle for the Fargodome.
James Taylor's upcoming Aug. 2 concert at the Fargodome may be an indication of good things ahead.
All tickets are $43.50. This is relatively low given Taylor's position in the music industry. The ticket price also is lower than what's offered in other nearby markets.
For the same show at the Xcel Energy Center in St. Paul, Minn., a reserved floor ticket would be $51.50, according to the event center's Web site.
Triple threat
Another competitor not to be ruled out in the battle for entertainment dollars is Ralph Engelstad Arena, also in Grand Forks.
While its primary focus is Sioux hockey, the Engelstad Arena also has generated several big shows, such as Tim McGraw, Stars on Ice and Dennis Miller, to its facility since opening in October 2001.
"It's definitely a unique situation to have three multi-purpose venues in the Valley. There is and always will be direct and indirect competition," said Chris Semrau, head of marketing and media relations for Engelstad.
"We'll always keep hockey at the forefront of our vision, but we also take pride in having a diverse line up each year," Semrau said.
National vs. local
Since the competition only appears to be getting more intense, it will be even more important for the Fargodome to have a management company that has the resources to keep the dome at the top of its game.
Global Spectrum is the world's second-largest management, consulting and event development company for public assembly facilities.
In the past, the Dome Authority debated whether it's more beneficial to pay money for a national management company or if the job could be done locally for less.
Paul Johnson got caught in the middle of the debate this spring, after forming his own company for the sole purpose of running the dome.
He submitted a proposal in March under the company name Vision Management Inc. to take over the dome's management contract. Johnson offered to run the facility for $90,000 per year -- about $36,000 less than what SMG proposed.
This upset SMG, which likened itself as Johnson's employer because of its association with Aramark Entertainment -- the dome's manager until Tuesday.
Aramark, a joint venture company with SMG, did not seek another Fargodome contract during the bidding process earlier this year.
Despite earning the support of at least one other Dome Authority member, Johnson withdrew his proposal under pressure from his employer.
A copy of the Vision Management bid obtained by the Forum contains previously unreported information about the dome's concert operations from 1994 through 2002.
Johnson, the dome's director since 1995, recently provided The Forum with concert revenue information and statistics prior to 1994 and information that is available for this year.
Johnson said he now looks forward to working with Global Spectrum and believes their commitment to increased corporate support at the local level will be beneficial for the dome.
Guy said Global Spectrum's Philadelphia roots also will be an asset. Philadelphia is a top-four market and a regular stopping point for most tours. If a concert has to go through this area, the company could push for a stop through Fargo, Guy said.
Also with Global Spectrum at the helm, there will be an increased focus on marketing, which will be important for the dome, said Russ Johnson, president of the Fargo Dome Authority.
"We will need to be on our toes to get our market share," Johnson said. "We'll have to add even more diversity in terms of events."
The seven-member Dome Authority will meet with several representatives from Global Spectrum Tuesday in a six-hour strategic planning session to map out the building's future under new management.
Johnson said there's a lot of talent that hasn't been to Fargo, and the dome will attempt to bring some of those acts to town in the future.
The two major event centers in Grand Forks will be plotting to do the same.
"I'm sure they'll get their share of acts, and we'll get ours," Russ Johnson said. "We wish any friendly competition the best."
Readers can reach Forum reporter Mary Jo Almquist at (701) 241-5531
