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You can thank the NFL for the three-day music festival coming to Pasadena next year.
The nearly 100-year-old Rose Bowl Stadium, once sought as a possible home for an NFL team, passed on the league after voters and officials agreed that it wouldn’t be a good fit. But now, the ramifications of that decision are playing out, as it will face an increasingly competitive market for concerts and special events when the $1.9 billion NFL stadium in Inglewood opens in 2019.
“There will be very significant competition,” said Darryl Dunn, the general manager of the Rose Bowl.
Pasadena officials hope the festival planned for June 2017 will make up for the potential loss of business.
The Rose Bowl isn’t alone in worrying about the new stadium, as the competition will likely affect the bottom lines of each of Los Angeles County’s other football stadiums, experts say.
“Whenever a stadium gets built, it gets a share of the events that used to take place at other places,” said Roger Noll, a Stanford University professor emeritus in economics. “The main effect is likely to be that it will bid down the price. Even if you manage to keep it, you’ll get less money for it.”
All of the local stadiums rely on their main tenants — their bread and butter sports teams — for the bulk of their revenue. But each also uses one-off events, such as massive One Direction concerts and outdoor hockey showcases, to fill in during their offseasons.
There’s not a lot of big-named concerts, flea markets and visiting sporting events that need more than 50,000 seats to begin with, Noll said. But now, with an NFL stadium in the market, the battle between the giants is only going to intensify.
“The opening of the new stadium in Inglewood will significantly elevate the competition for major special events throughout the region, whether those events are sports or entertainment-related,” said David M. Carter, a principal in the Sports Business Group and executive director of USC’s Marshall Sports Business Institute. “Although there may not be that many events requiring a venue the size of a football stadium relative to that of an arena, those that own or operate large venues in the area need to be both creative and proactive to land future events.”
Those secondary events are “critical” for a stadium’s profitability, he said.
“The Rose Bowl and the Coliseum, once renovated, will have to offer a strong value proposition and event-day experience in order to compete with the Inglewood stadium for certain major events,” he said.
How hosting NFL now will help the Coliseum compete in the future
The Los Angeles Rams will play at the Los Angeles Memorial Coliseum for the next three years as their facility is built in Inglewood. The arrangement gives the Coliseum a lucrative tenant while it moves forward with $270 million in restorations.
Those upgrades will actually help it compete better against the NFL stadium and the Rose Bowl in later years, according to officials.
“Of course it’s going to be a competitive environment for us,” said Dan Stimmler, chief operations officer for the Coliseum and Sports Arena. “Once the Inglewood stadium gets built, and the Coliseum gets renovated, all three of them will be at the same level.”
The competition might not be all bad either, Stimmler said.
“It’ll increase the amount of events in Los Angeles, and I think the more events that start to come, whether it’s to Inglewood or the Coliseum, L.A. becomes more and more relevant to every tour and every stop,” he said. “It becomes a stronger destination for everyone.”
Part of the Coliseum’s renovations will allow it to not only host large concerts, but small, intimate ones, too. The layout of the stadium allows for performers to set up stages to play for crowds that range from 6,500 up to the full 77,000 seats expected to remain when the restoration ends in 2019, Stimmler said.
Why the iconic stadiums still matter
Even with a state of the art facility in town, the history of the Coliseum and the Rose Bowl will keep people coming back, Stimmler said. They each have long lists of past performers and one-of-a-kind experiences that matter when a promoter is picking a location for an event.
Artists such as Bruce Springsteen and Pearl Jam, for example, specifically choose to play at the Sports Arena or the Coliseum, Stimmler said.
“So much of it is the promoter or the act that has a preference where they go,” he said.
The Coliseum has hosted two Olympics, two Super Bowls, three presidents, the Rolling Stones, Pink Floyd and more.
Fred Claire, a member of the Rose Bowl Operating Company’s Board, agrees. Claire, the former general manager of the Dodgers, said Kenny Chesney, who came to Pasadena last year, had playing at the Rose Bowl on his bucket list.
Other stadiums can’t provide that, said Pasadena City Councilman Victor Gordo.
“That’s what distinguishes us from a strip mall stadium that is built to last 30 years and then be torn down and replaced by another strip mall stadium,” Gordo said. “You can’t re-create that.”
How the Rose Bowl developed its NFL-free ‘Plan B’
Officials at the Rose Bowl say they’re trying to stay ahead of the curve. They completed their renovations before the Coliseum and ahead of the NFL’s return, after seeing both as their inevitable competition in the future.
They’ve set up an arrangement with AEG Live that will not only bring the Arroyo Seco Music and Arts Festival to Pasadena’s Arroyo, but that will give the Rose Bowl the right of first refusal for any of AEG’s other events that need a stadium-sized venue.
“It’s not being fearful; it’s just recognizing what is there and for us to do everything that we can to keep the Rose Bowl relevant,” Claire said. “It’s critically important that we sustain the longevity and viability of the Rose Bowl.”
Besides taking away those one-off events, the new NFL stadium could hurt ticket sales for the UCLA games, according to Dunn, the Rose Bowl’s general manager.
The Arroyo Seco Music and Arts Festival is the Rose Bowl’s solution, both for the potential loss of revenue from increased competition and for paying off the debt from their renovations. The music festival — a much-more family-friendly twist to the formula popularized by Coachella — is poised to bring in more than $90 million over the next 20 years. It’ll be the third leg in the Rose Bowl’s financial support system that includes two other long-term tenants, UCLA and the Tournament of Roses, Dunn said.
“We believe it is critical,” he said.
The Rose Bowl saw the NFL’s return as unavoidable, according to City Councilman Gordo, who serves as the president of the Rose Bowl Operating Company’s board of directors.
Previously, the NFL offered to pay $500 million to renovate the Rose Bowl, but Gordo said the plan would have gutted the facility and took away a lot of its historic value. When Pasadena officials passed on the NFL, they also realized they needed to prepare for the idea that it’ll likely still come without them, and that could mean the competition they’re now expecting in 2019.
When the stadium decided to pay for its $180 million renovations itself, it also signed a 30-year agreement with UCLA and the Tournament of Roses. Part of the worry was that UCLA might be enticed away by a closer stadium built by the NFL, Gordo said.
Now with the three tenants, the Rose Bowl is in a better position; it might even turn away events in the future, instead of having to take whatever it could get to keep its revenues consistent, he said.
“It allows us to be pickier, thankfully, about who gets to the participate in the history and the glory of the Rose Bowl,” Gordo said. “(The financial stability) gives the RBOC and the city a newfound level of control over the future of the stadium and its short term tenants.”