This week In the Hot Seat with Larry LeBlanc: David Campbell, president and CEO, AEG Europe.
With five arenas in the British Isles usually ranked into the Top 20 live music ticket sellers globally, The O2 Arena, Manchester Evening News Arena, O2 Dublin, Wembley and Odyssey in Belfast, the U.K. may be the most formidable event market in the world.
The O2 Arena in London appears to lead the world in ticket sales.
With a seating capacity of 23,000, owners Anschutz Entertainment Group (AEG) fill The O2 with music-related shows; and non-musical fare, such as sport, family shows and entertainment events. As well, there’s been considerable use of AEG’s multiple-show residency concept for such leading acts as Prince, the Spice Girls, and Bon Jovi.
In 2007, The O2 suffered a £9.7 million loss when it was only open for six months. In 2008, the venue made a pre-tax profit of £15.6 million. During 2008, the venue hosted 140 events, and its revenue doubled to £53 million.
In 2009, The O2 racked up 179 event days with 212 events. Of course, Michael Jackson had been booked to perform 50 shows during his residency there. The shows were scheduled to begin in July 2009 and continue through to March 2010 with 30 of the shows being in 2009. Despite losing those sales, other events at The O2 sold close to 2.5 million tickets in 2009.
When AEG agreed to take on the much-pilloried Millennium Dome in 2005, people were doubtful.
AEG, however, has proved all doubters wrong.
To its credit, AEG spotted a gap in the U.K. market. London was crying out for a large, state-of-the-art music venue. The city has not traditionally been fondly regarded for its arena facilities. On arriving at one complex several years ago, the Eagles' Don Henley reportedly asked the damning question: "Are we in Russia?"
AEG had the foresight to see the opportunities that the Millennium Dome offered and had the balls to move forward. Don't forget that at the time the complex was lying empty, and it was viewed with great distain.
Glasgow-born David Campbell, president and CEO of AEG Europe since 2005, is largely credited with transforming the Millennium Dome flop into the rebranded O2, one of the world's top entertainment venues in under three years.
Under the leadership of this dynamic former marketer, radio boss, TV executive and media strategist, and sponsored by the mobile phone company of the same name, The O2 has attracted the brightest of the brightest stars.
This includes: Prince (21 nights), the Spice Girls (17 nights), and Bon Jovi (12 nights). There was Led Zeppelin's celebrated reunion in 2007 as well as shows by Bruce Springsteen, Elton John, the Rolling Stones, the Eagles, Kylie Minogue, Stevie Wonder, Coldplay and James Blunt.
It has just been announced that the BRIT Awards will move to The O2 next year, following a 13-year run at the Earl's Court Exhibition Centre. The BRIT’s organizers made the call to move after deciding they wanted the ceremony to be based on an "arena event" in the future.
A seasoned deal broker, Campbell has more than 25 years marketing and management experience. He is a father of four, whose wife had just given birth to twins when he was approached by AEG to take over the Millennium Dome after £789 million of taxpayers’ money had been poured into the project that had closed within a year.
AEG’s initial investment in The O2 was an estimated £350 million between 2005 and 2007 when the company gutted the venue. Apart from the tent, everything else is new. A similar sum is being spent as the next phase is being completed in time for the Olympic Games in 2012, when the arena will host basketball and gymnastic events.
Meanwhile, AEG is considering taking over management of London's £550 million, 80,000 seat Olympic stadium after the 2012 games. While AEG is one of 106 parties interested in taking over the stadium, it is regarded as one of the front runners.
Born in Glasgow, Scotland, Campbell moved to London with his family at the age of 13. His father worked as a purchasing manager for a U.S. diesel engineering firm. The family moved to Indiana when he was 16. He studied media and business at Washington University in St Louis, earning an MBA specializing in marketing, before joining the marketing department of General Mills.
He was next hired by Pepsi to work in New York, selling diet and caffeine-free products. Two years later, Pepsi moved him to London, where he jumped over to a young upstart company, the Virgin Group, staying there 11 years.
Campbell sprang to considerable prominence as the chief executive of Virgin Radio, which made its debut in 1993, and became one of the largest commercial radio stations in the UK. It was acquired by the former “Big Breakfast” presenter Chris Evans in 1997. Campbell then played a pivotal role in setting up Ginger Media Group with Evans, which the pair then sold to the Scottish TV owner SMG for £225 million in 2000.
Next, Campbell became the vice chairman of Ministry of Sound, the independent music, clothing and club empire.
Campbell caught the attention of AEG during a four-year stint working for former London mayor Ken Livingstone, where he helped to set up the Visit London initiative, which delivered the first boost to tourism in the capital in over a decade.
What prompted you to leave a £250,000 job at the London Tourist Board to make a jump to AEG in 2005?
Most of my background, apart from that fleeting moment there (at the London Tourist Board) had always been in the commercial sector. I had started out with Pepsi, and spent a lot of time with Virgin. I got contacted by Ken Livingstone, who was then the mayor of London, to get involved with promoting the city. The first bit of that was tourism, because it’s about 10% of London’s economy. As part of that, I had gone to see Tim Leiweke (president/CEO of AEG). They were finishing off doing the deal to acquire the (Millennium) Dome. I had gone to sell him something. If you know Mr. Leiweke, you will know that he is a very high-speed salesman. He bettered me. He sold me something instead of me selling him something. He sold me a job.
You have worked with some colorful characters, including Ken Livingstone (dubbed “Red Ken" by the UK media), Richard Branson, and Chris Evans.
A lot of them are quite similar in many different ways. If you took a multi-national billionaire businessman in the form of Richard Branson, and a slightly Left leaning politician in the form of Ken Livingstone, and said that they were similar, people would go, “That’s a bit of a strange one.” But, they are quite similar. They are both very driven. They are both very passionate. They are both very clear about what they want to do. Neither of them spends a lot of time debating the issues. They are very action-oriented, and results-oriented.
The same can be said about Philip Anschutz.
Oh, very much so. I think that the only difference is that both Branson and Livingstone like the limelight, while Philip is not one to jump out into the limelight.
In 2005, while working at the Ministry of Sound, you stood on the stage of the Millennium Dome, and thought that it’d be a waste to tear the building down.
Absolutely. We had about 50,000 plus people in the building at the time. There wasn’t much infrastructure in it at all. I had never come when it was the “Millennium Experience” (an exhibition celebrating the beginning of the third millennium). People have asked, “Why wouldn’t you?” The reason is that I didn’t know I would be doing this. But, when I first saw (the venue) at the Ministry of Sound (party), I just thought it would be criminal to take it down, because it is a beautiful structure, and very iconic. There aren’t that many things that are iconic to that degree.
The National Audit Office reported that of the options they had for the Millennium Dome, AEG was the best.
In this instance, the National Audit Office chose wisely.
Around the time you took the AEG job, your wife had twins. Besides Tim Leiweke being persuasive, you must have felt that AEG could indeed pull off a turnaround of this “white elephant.”
Yeah, definitely. I guess it was a big white elephant. Somebody came to us once and said, “You guys are putting £350 million into this. You must have done loads of market research before you started.” They were shocked to learn that we didn’t do anything at all. The reason is that you can go on Google still, and put “white elephant + dome” and you get 650,000 (sic) hits. You kind of go, “Why would I research that?”
Turning around “the biggest white elephant in the country” was a real marketing challenge?
There were definitely days before we started when I would wake up in the morning in a cold sweat going, “This, perhaps, is not a really sensible thing to do.”
You can’t help working for people like Richard Branson, and not stay true to being a marketing-driven person. How did you market The O2 before it opened?
We were absolutely right in not trying to push out stories about what we were doing and not giving (media) people illustrations of (the venue). We only showed people (anything) when there was something real to talk about. We didn’t do any advertising or promoting of the building to the public until the 24th of June, 2007 when we had the first show (with Bon Jovi). That was first time the public got exposed to (the venue). We knew the reputation was pretty bad, so letting it carry on being bad…to be honest, anything we did was going to be better. We were obviously planning to do it quite a lot better.
How is your “white elephant” doing?
It ain’t no white elephant no more. It’s kind of funny. I would use the phrase, “Success has many fathers, and failure is an orphan.” Since this has worked, the number of people who have come out of the woodwork and said that they were going to do the same thing is amazing. I couldn’t find any of them five years ago. But there are an awful lot of them now.
Before The O2, London needed another major venue. It has the population, and the location to be regarded as national, if not international, destination city. There wasn’t much else available for year-round events, other than Wembley Arena, and Earls Court Exhibition Centre.
That’s true. Wembley is about two-thirds the size of us. You are talking about a 12,000 size venue in one of the world’s great capitals, and in a very music-oriented country. That was kind of crazy. There was a little bit of stuff at Earls Court. But Earls Court’s primary objective in life had been as an exhibition center, so they couldn’t really run concerts most of the time. It is one of those things that—20/20 hindsight is a fantastic thing—but you look back at it and you go, “Hang on a minute. Why did nobody do this before?”
Well, AEG did have a go at operating an arena facility in London before.
We used to own an ice hockey team called the London Knights, and they played in the London Arena. But, even we were ridiculous there because we went and bought an old banana warehouse, and tried to make it an arena, which is very much in the spirit of Wembley being a swimming pool (Wembley originally housed a swimming pool, as reflected by its former name, the Empire Pool). So this time we got smart, we decided to build a brand-new arena that was built to be an arena, and not be anything else.
[The London Arena (also known as London Docklands Arena) was an indoor arena and exhibition centre on the Isle of Dogs in East London that AEG tried to convert into being a major multi-entertainment centre. Built on the site of the old Fred Olsen tomato and banana warehouse, the facility opened in 1989.
Philadelphia-based, Spectacor Management Group (SMG) took over ownership of the venue in 1994. In 1998, SMG entered into a partnership agreement with Anschutz Sports Holdings which came to hold an equal share in ownership.
The arena, which could seat up to 12,500 people, had a £10 million refit in 1998. One of the primary reasons for the refit was that Anschutz was trying to introduce professional ice hockey to London.
Besides being the home of the London Knights, the London Towers basketball team, and the Greater London Leopards basketball team, the venue hosted boxing, wrestling and trade shows. Among its music shows were Duran Duran, Pink Floyd, Guns N' Roses, David Bowie, Robbie Williams, Justin Timberlake and Eminem. The London Arena was demolished in 2006.]
In 2009, The O2 had 179 event days with 212 events. A pretty healthy booking season.
It is good. It is especially good because we don’t have any anchored tenants here. That’s the big difference versus most other arenas worldwide. If I can compare it to Staples (Staples Centre in Los Angeles) where we, obviously, have a whole lot of anchored tenants or O2 in Berlin where we have a hockey team, and a basketball team, we are a pretty different proposition. But it has worked.
In 2008, the profit figure for The O2 was £16.6 million reversing a £9.7 million loss. How well did The O2 do financially in 2009?
Oh, the benefits of being a private company. But well-tried. We are doing fine. The numbers are very much on budget, and increasing. We still have to work very hard, but we do okay.
Would it be fair to say that you are covering expenses and operating costs, but you are not substantially knocking down the debt at this point?
No. We cover all of it. If we weren’t covering all of it, we wouldn’t be having this conversation.
Certainly the debt load is a burden.
We are paying down debt, and still make a profit after we cover the costs of reducing it. We are in a healthy position. Having said that, it was a big bet in a new market, which hadn’t been grown before. The good thing is that Wembley (Arena) still exists. There are still quite a few shows that go there. There’s still room for everyone. We definitely have grown the marketplace. I think that’s pretty important.
The death of Michael Jackson on June 25, 2009 resulted in his 50 date run being canceled.
That was a really sad event. That happened two weeks before Michael was to arrive in the country to get ready for the shows. I don’t have to explain to you that two weeks out, it is almost impossible to fill those dates because people just aren’t sitting around. I think the shortest lead time that I have on a bill at the moment is something that could materialize in October. So that’s 10 weeks out, and that’s incredibly short. Most of the stuff that we are booking is a year out. We have events into 2012.
One of the things that is interesting is that since we started, booking time frames have gotten longer, particularly in the peak times of the year. They used to be 6 to 9 months. We have people that we are booking a year or two years out.
Losing 50 dates with Michael Jackson must have given you a wakeup call that you had to diversify events.
The two (things) were kind of happening in parallel. One really isn’t a replacement for the other. If there was another show of the scale and caliber of Michael Jackson, we would still do that. Remember that the 179 days and the 212 events that you quoted, that was 2009, ex-30 Michael Jackson shows. Those were all four day shows. That (show total for 2009) would have been off the scale if that had all happened. I can’t remember how many we ended up replacing. There were probably three or four (events). So net, it would have been another 25 shows onto last year.
Are you in danger of having too many shows?
No. No. No, there’s no such things as too many. Never. Never.
Yes there is. If you have an overlap, and 20-25 days in building time, then there can be too many events.
No, no, no. You can never get too many events. It’s a big city. There’s plenty of people. We’re connected to Europe. It is quite easy to fill all of the dates.
Thousands of Beyoncé fans were stranded for hours in Greenwich after her gig at The O2 last year, because of engineering work on the Jubilee Line.
We have had a couple of challenges on the tube (subway line). The tube should be fixed by this fall. We should be fine by then. The only advantage that the tube problem has had is that it makes it very easy for me to get a hold of the mayor of London. I don’t think I would have paid that price even if that was easy.
In the Fall, both “Les Misérables” and Roger Waters’ “The Wall” are coming to The O2.
One of the other areas we have really focused on is trying to broaden the musical range. Rather than just rock and pop and family shows, which are kind of traditional as arena fillers, we are trying to expand into classical. We have gone down that route with “Carmen” (starring Darius Campbell). We have had Carmina Burana. Now we have Cameron Mackintosh (British theatrical producer Sir Cameron Mackintosh) bringing in Les Miz for its 25th anniversary.
That has sold really well.
The weekend that Les Miz went on sale, it was the fastest selling-ticket on Ticketmaster. We went straight through the first show into a matinee show. It kind of surprises people that we are playing it in an arena, but if you have respect for the size of the building, and you put a good production together, it can be a fantastic show. The absolute key, is to have respect for the size of the building. If you try to take a 1,500 or 2,000 size theatre show, and put it into a (much larger) area, you are going to be challenged. But, if you respect the size of the building…when we did “Carmen,” for example, it filled the whole arena floor. Because (the production) respected the size of the building, it worked.
The O2 has expanded into numerous non-music events, such as sports, family shows and pure entertainment shows like “Ben Hur,” featuring chariot racing.
That expansion was very much underway. In fact, we were going in and out. If (Michael) Jackson had played, we were going in and out with Jackson and “Ben Hur,” so that was already in place. We didn’t have tennis a year ago. Then we started up a tournament and we got 256,000 people for a sell-out event. That is because we brought in a good product, put it into a good venue, and we promoted it well.
So the two booking strategies happened in tandem with each other?
To be a phenomenal success, rather than to be (just) successful, you need the variety. We are always looking for different areas to go into, and different things to do. We have managed to get a good rapport with people who want to do that. A lot of those things have worked and succeeded. So people like Cameron Mackintosh have seen other shows here, and he goes, “This is great. Why don’t we stage Le Miz here?” (The production) will go out on TV, which will expose it to a whole new audience that will see that happening in the arena.
We have managed to really broaden up the base of events that would go into an arena--apart from sports which was never really that big in London before. That’s absolutely stuff that we would have taken somewhere else. Basketball wasn’t coming to the UK; and the NHL wasn’t coming to the U.K. We did fantastically well with the ATP World Tennis final, which we brought from Shanghai. It’s a joint interest (venture) between us, and the ATP. We also have two junior partners in (the co-venture), the All England Lawn Tennis and Croquet Club, who do Wimbledon and the Lawn Tennis Association. We sold over a quarter million tickets in year one to that. It is the fourth largest sporting event in the UK. It is the largest tennis event indoors in the world. Those kinds of things are really good for us.
You recently sold 8,000 tickets for the coming Ultimate Fighting Championship in a weekend.
Yes. It’s coming up in October. UFC has always been very strong for us. I think the whole program is strong within UFC. Basketball, we have also always focused on. This year, we have again a sold-out pre-season (NBA) game (on Oct. 4, 2010). We have (the NBA Champion) Los Angeles Lakers against the Minnesota Timberwolves. Unfortunately, we had already sold out by the time the Lakers won the (NBA) championship otherwise we might have gone back and had another look at the ticket prices. We’ve got a couple of other big announcements coming up.
Explain how Power Snooker works.
People keep playing with (sports) formats. In cricket there’s something called Twenty20 where they tried to make it a bit more exciting, and it is. (A Twenty20 game is completed in about 3 1/2 hours, with each inning lasting around 75 minutes). Three years ago, we tried to do Turbo Tennis, which is an abbreviated tennis format (five matches of 30 minutes each). It never took off in the same way. Power Snooker is the same thing. It is trying to take longer format games, and put them into a shorter, more entertaining format. Tennis didn’t quite catch on. Cricket has worked fantastically. I hope that Power Snooker will do the same thing for snooker.
[On Oct. 30, 2010, indigO2 will host a snooker event, where the world’s top players will compete in a Power Snooker knockout tournament. In Power Snooker, points count, frames don’t. The player scoring the most points in half an hour wins. The clock starts as the reds are broken, and stops when the final black of each frame drops.]
“Ben Hur” featured chariot races around the arena?
That was pretty interesting. We’ve got arena polo in February (2011). That’s polo being played inside the arena.
In April, you brought in Sally Davies to be venue director of The O2. Is that to take pressure off you so you can turn to other parts of the business?
I hope so. So far so good. Sally is really competent. She came up through the ranks. She ran Indigo (music club), and the exhibition building called ‘the bubble,’ and she’s done a great job. I think that she can add a lot of value to our team. So we’ve added Sally as the venue person, and changed around some of the sales and ticketing team to make (the team) even better.
[In April, 2010, AEG Europe promoted Sally Davies to the position of venue director for The O2 arena. Davies was previously GM for indigO2, and The O2 bubble. Her new position gives her overall responsibility for the success of The O2 and its operations, sales, technical, ticketing and marketing strategies. As part of a management shuffle, Paul Newman, who was previously responsible for The O2’s ticketing and box office, now also heads up The O2’s entertainment and music sales; and Emma Bownes, having spent three years at Wembley Arena, joined Newman’s team as sales manager.]
One of the things that is really important is not to become complacent. We are constantly striving to make things better. Just because we do pretty well, and we sell more tickets than other people, that isn’t a reason to sit and say that everything’s fine. We are constantly trying to push things forward. Both in terms of staffing and customer service. We do a lot of measurement of customer service to make sure that we deliver to people the best possible service.
Will there eventually be a hotel complex at The O2; perhaps, a Marriott as well as a theatre that could house Cirque du Soleil year round?
We are certainly looking to push forward for the development. When we started out, we were hoping to have a casino here, which would have been the catalyst to make all of that happen. I think that is unlikely to happen in the short or medium-term.
Yeah. It was, basically, the outgone Prime Minister Gordon Brown. He didn’t believe in (casinos). He thought that he would be celebrated by the media for getting rid of (the casino policy), even though it was his government who came up with the idea. There’s the expression, “A day is a long time in politics.” For him, it lasted for about two days. (Brown’s tenure ended in May 2010, when he resigned as prime minister, and leader of the Labour Party).
So that (opposition) has slowed the process down. We hope that in the next two months, we will get planning (approval) for a hotel. Then, as soon as we get the planning, it’s a matter of trying to operate it. The Cirque theater we had talked about for awhile. That is a bit more challenging from an economic standpoint, but we hope we’re getting close to a model that can work. If it literally isn’t that, it is something in that direction.
[If the Labour Party government under Gordon Brown had not reneged on its commitment to a network of casinos across Britain, it’s likely that The O2 hotel would almost be completed. The casino policy, championed by former Labour Party PM Tony Blair, was dumped in 2007 as one of Brown's first acts as prime minister.]
AEG’s multiple-show residency concept has been successful with Prince, Spice Girls, and Bon Jovi.
As I said, to be a phenomenal success rather than to be successful, you need the variety, but you also need the big long-staying acts that you just talked about. This (concept) is good from our standpoint. It is also something that you can do in London that is relatively unique. I’m not saying that (the concept) can’t be done anywhere else, but it is relatively unique here just because it is London. Even if we took a show, and toured it around the UK, if I looked at the ticket sales, we are very much a national venue. People buy tickets from all over the U.K., and come to see the show even if it is playing closer to them geographically. I think part of that is because people will go out for a weekend or go out and stay overnight in London. They won’t necessarily do that in other places. So we get a lot of people coming into (London).
From an artist standpoint, if you were talk to Jon Bon Jovi or any of the band, they like coming to London; camping out for a month; staying in the same hotel; and not having to pack up each day, and go back on the road. The numbers work better for everybody. We still go in and out between (performances). So we still had shows in between the (12) Bon Jovi shows when they had dark days; but (the concept) is still far, far more productive, and far better from the artist’s point of view.
(The concept) is kind of a phenomenon we saw happening in London theatre where people (from throughout the UK) were going to the theatre; and big Hollywood stars were sticking around London for three or four months and playing in London theatres. We thought, “Why don’t we try to do that in music? We had done the same type of thing in Vegas; the Celine Dion shows and others there. So you can do residencies. Why don’t we have a go at trying to make that happen here?
The O2 is more than a national venue. Europeans visit London, and fans fly there for shows.
That is indeed true. If you do 21 nights of Prince, and those are his only European dates, you definitely get a European audience. Prince used to play an after show ‘til 3:30 or 4 A.M., and I remember going back on the boat on the (River Thames) at 4 A.M. It was fantastic because going under the Tower Bridge at quarter past four in the morning, there were 7 or 8 different languages (from people) going on in the back of the boat, all of whom had come from the Prince show. That was the kind of crowd that we were drawing into.
Some 28% of the 256,000 tickets The O2 sold for the ATP World Tennis final were to people outside of the U.K.
One of the things I can never get across to the government as strongly as I would like to, is that the leisure and entertainment industry is a big economic driver. It is not just the business that we do here. It is the fact that those 28% of people that that come from outside the of the U.K. are staying in a hotel, probably for a number of nights; are all traveling; are all going out to restaurants; and are all going to other places in London etc. Certainly in the U.K., and I think most governments, underestimate the impact that leisure has in the economy.
The final part of the mantra that I have on my soapbox is that in bad economic times, you can change the number of people spending money on leisure much quicker than you can change other things. If I want to change the amount of people putting money into financial services in London, that’s a complex, international, and regulatory nightmare for me to try and play around with. Whereas, if I go and promote London, and promote shows abroad, I can pull people here.
Led Zeppelin’s 2007 reunion at The O2 benefiting the Ahmet Ertegun Education Fund was a coup.
The Led Zeppelin show was amazing, because you didn’t have half of the production around the last time they played together. For them to play with the production that they played with was quite stunning. It was such a polished production, but a relatively simple one. It was all done on this LED screen. Sometimes the (28 x 10m LED) screen showed the band playing that night or showed them playing with previous footage. It was brilliantly done, but (the technology) was something that didn’t exist 20 years ago. For me, having them playing with the clarity, and all of that support which you didn’t have before, was one of the most amazing things; other than the fact that they were back together, and playing again.
[The use of the giant LED screen was controlled so that the show didn’t just become about what appeared on it. A Spyder Video Processor utilized 16 channels to address various areas of the screen individually. These mixes were turned into two separate blocks of information that the screen processors could understand.]
Harvey Goldsmith recently told me that Led Zeppelin’s members had first checked out an Elton John show at The O2.
There are three bits to that story which are quite funny. We were going through (the venue) with the band, and Mr. Page said, “I bet it doesn’t sound any good up there.” So, with all of them, as well as Harvey (Goldsmith) and myself, we took the elevator up to Level 4 to go to the very top of the building to have a listen. Someone held the elevator, and we were sort of standing there waiting for them to go. They just put their thumbs up, and sort of smiled at each other. That’s when Harvey and I knew that this was going to be okay. Then, John Paul Jones started running up and down the stairs; and that was it.
The second story that comes behind this is that it was Elton John’s Vegas show that was playing in the arena at the time. It had a massive LED screen that is very similar to the one we have in Vegas, in Caesars’ Palace in The Coliseum. The remark (from Led Zeppelin members) as we went back to get into the elevator to go down was, “That screen. We have to get one just like that, but bigger.” And they did.
A funny bit happened after they walked across the (arena) floor. They wanted to hear what the show sounded like on the floor. So we stood at the sound desk; the four of them, Harvey and I. As we walk out to take them back to their cars, they are going, “Harvey, there are lots of rumors around about us reforming, and getting back together. You have to put a stop to that. You have to get people to stop writing about it in the press.” Harvey, and I can’t give you a proper impersonation, says, “What do you mean? The four of you just stood in a public arena together. What am I supposed to do?” So it was, “Okay, fair enough.”
It must have been gratifying having Bon Jovi return this year for 12 shows.
It was fantastic. (Bon Jovi’s personal manager) Paul Korzilius said, “Okay, we’re coming back. We have to do something really big and special to celebrate what is going on here.” We began brainstorming, and people came up with the normal thing of fireworks, banners and blah blah. Then, we said, “Why don’t we take the band up on the roof, and get them to play off the roof. They are the first band to play inside the building; why don’t we make them be the first band to play on the building?” Paul said, “That’s a crazy idea but I like it. Let me ask the band.” He came back the next day, and said, “They love it.”
There wasn’t a night of the 12 nights that Paul didn’t talk about it. He still talks about it. The band loved the shows, but, even more so, they loved being on top of the roof. Jon said, “It was just insane standing on top of the roof playing and you’ve got helicopters buzzing around filming you, and planes landing at the London City Airport. That was a real buzz.”
It is all about the show.
It‘s about the show, and it’s about making it memorable. We were trying to do something that would punch through. Some people said, “Why don’t you have the band play on a boat?” Okay, that’s good but other people have played on boats. Nobody had played on top of the building.
The O2 is just one of the things under you. You also run AEG Europe.
Yeah. We are a bit of a funny company. We’re privately-owned, and we are quite a matrixed organization. Most of my focus is on London, and what we do at The O2 which is, by far and away, our biggest investment.
Do you oversee, the recently-formed AEG Sponsorship division, headed by Paul Samuels?
Paul works for me. People, spending the amount of money that they do with us, want to do a valuation. They want to know that they are getting value for their money. We do all of the (AEG Live) evaluations globally out of London. There’s a team here that does that; both for our benefit, but also for our clients’ benefit.
Do you oversee the Berlin O2?
We work together. The best way to describe it is a confederation of companies. So, we work together rather than people working for one another. So Detlef Kornett runs Berlin. We talk all of the time.
When artists like Leonard Cohen, Justin Bieber or the Black Eyed Peas perform multiple dates in Europe, do you oversee the overall strategy?
We will get involved in that. The three you named are all AEG Live shows. It is by far easier to do if it is an AEG Live show going into an AEG facility. But, if I take something like Roger Waters and “The Wall” and that’s going into AEG facilities across Europe, I get involved in making sure that it goes into our facilities in as many cities as we can across Europe. It is easier with an existing AEG show or an AEG promoted show than if it is not. Roger Waters is Live Nation promoted, working in AEG buildings.
There’s been speculation that AEG is seeking to take over management of the Olympic Stadium after the 2012 games.
Everybody calls it a bid. Bid means that you are putting money forward. We are not looking to put money forward. They are looking for a use for the Olympic Stadium—actually the Olympic Park after the games. It’s a great stadium. It will be fantastic for the Olympics.
It’s an 80,000-seater.
Yes, but it is sort of a semi-permanent stadium. It has been built on the basis that you can de-construct it down to a 25,000 person stadium.
After each Olympics, buildings remain and have to be filled.
The Olympic Park Legacy Company is working through that at the moment. We are involved in the conversations of what to do afterwards. I can’t say to you one way or the other if we are going to bid for it; or if we aren’t going to bid for it. We will bid for something that makes commercial sense. The bidding process will be one whereby (it is considered) who is going to be involved; who is going to be paying for what; and who the tenant is going to be. I don’t have to explain to you that to have a stadium, you have to have a tenant.
So are you a West Ham supporter?
Ah, no. Very nice people, but I am not going to change my allegiance to them (from the Chelsea Football Club). I may be reaching to them from a business standpoint. West Ham is certainly one of the strongest positioned in terms of being a tenant in the Olympic Stadium. I think it is more, than less likely, that the government would do a deal with somebody else to start as the operator of the stadium, and then have a tenant involved in it. Rather than just giving it straight to the tenant, and missing out on any other opportunities.
You’re from Kelvinside in Scotland.
I went to school there in Glasgow, yeah.
What kind of a cultural shock was it moving to London when you were 13?
It was a big city wasn’t it? It was going from a big industrial city up north to a town south of London called Cobham in Surrey.
Your father was a purchasing manager for a U.S. diesel engineering firm?
He bought the parts that made diesel engines. He worked for a big U.S. company in Europe, then in Africa, and then in the States at (the company’s) headquarters.
You lived 9 years in America, first in Indiana.
Not a lot of it in Indiana; most of it in St. Louis, Minneapolis, and New York. My parents lived in Indiana, but I went to school in St. Louis for five years. Then, a year in Minneapolis with General Mills; and two years in New York with Pepsi.
What career did you plan by taking media and business at Washington University?
I got exposed to radio and TV; and I liked business. I liked how business works; what are the drivers; and what are the things that make it happen? That bit of radio and TV fascinated me. Not the bit of being in front of the microphone or in front of the camera.
Though you were briefly a radio DJ.
That was a very short-lived part of my career. That was at the university station, and I did some work at commercial stations as well.
You were recruited by General Mills, then onto Pepsi.
I kind of went from media into advertising and marketing. The three big marketing companies then bringing people in were General Mills, General Foods and P&G (Procter & Gamble). So, if you wanted a good post-education education, those were the places to go to. Being a horribly obnoxious MBA student at the time, I didn’t understand at General Mills why I wasn’t running half of the company a year after I got there.
Were you obnoxious?
I was really obnoxious, yeah. I was an arrogant MBA student not understanding; I knew everything about business, so why wasn’t I running this company? Then a very nice man from Pepsi offered me a very substantial increase in salary—a 40% increase in salary, I think—to work for Pepsi in New York. I thought, “Ah-hah, they understand.” So I went to work for Pepsi in New York. The one thing I got wrong was that the cost of living in New York was about 45% higher than it was in Minneapolis. So a net gain of minus 5%.
You worked on selling diet and caffeine free drinks from 1982-86.
I had a fantastic time. For two years, I was based in New York, and then I traveled the world. I spent half of my time traveling. I introduced diet colas and caffeine free colas all over the world. And in really sophisticated markets. While my colleagues were out in the middle of Africa, or the middle of the Middle East trying to get Pepsi to kick off, I was in Athens, Sydney, Tokyo, Buenos Aires and other really horrible places. I was 23 or 24.
Did someone at Pepsi notice your Scottish burr, and decide to move you back to the UK?
It was a coincidence. I got on well with the (Pepsi) people in the U.K., so they moved me back here. I was on an international development track; you worked for two to three years in each market, and then were moved to the next place. Come 1986, it was time to move on, again. My choices were Lagos (Nigeria) or Jeddah (Saudi Arabia). At age 27, living in London, faced with going to either Lagos or Jeddah, I thought that five years of promoting branded brown fizzy liquid was probably enough for me.
You also met the folks from The Virgin Group.
I met Charles Levison. He was my entry into Virgin. Then I worked for Robert Devereux, (head of Virgin Communications), who is Richard Branson’s brother-in-law.
[In 1983, as joint managing director, Charles Levison brought together the Virgin Group, Yorkshire Television and Thorn EMI to form the Music Channel and exploit new opportunities in cable and satellite TV across Europe. Between 1987-1991, Levison worked as managing director of Virgin Broadcasting, overseeing all aspects of the Virgin Group’s activities in world broadcasting markets.]
It was right before the company floated. I even remember the launch (IPO) slogan, “From the Rock Market To The Stock Market.” I have a fantastic picture of Richard Branson jumping from the edge of a swimming pool in a bowler hat and an umbrella. Oh, how we laughed.
You worked initially for Virgin Communications.
It was about 30 companies in total. We did everything from music videos of bands to film, radio and TV, book publishing, all kinds of stuff. It was run by Robert Devereux and I was kind of his right-hand. So I was involved across the board.
You became Virgin Radio’s chief executive.
I ended up running a bunch of the TV stuff. We also had investments in radio, and I sat on the board of a lot of the radio stuff. I was on the board of Virgin Radio.
How did you become Virgin Radio’s chief executive?
I had been doing some TV stuff in LA. I got back that morning, and went to the board meeting. I was a little bit jet-lagged. The incumbent management, which was setting (the station) up had come up with some programming. I opened my mouth and said that I didn’t think it was very good, that I thought they were wasting everybody’s time. The room was silent. It was one of those times where you think, “I don’t think that was the right thing to say.” In any case, that afternoon I got a call from a woman saying, “We’d like you to take the station over and change it and make it work.”
Your first job was as a caddy at a golf club, where you carried clubs for British game show personality Bruce Forsyth. He said you were a lousy caddy.
You don’t know that (laughing). I was a good caddy. I ended up caddying in the British PTA at one point. The British PTA is held at a course called Wentworth, where I was a caddy. Golfers need to know the course as well as they can, so they take a bit of local knowledge from the caddy. Mr. Forsyth was a regular, and I was a regular.
[The Wentworth Club is a privately owned golf and health resort in Virginia Water, Surrey. The club is surrounded by and entwined with the Wentworth Estate, one of the most expensive private estates in the London suburbs, Wentworth Club has three 18 hole courses. The headquarters of the PGA European Tour are located at the club, and each year it hosts the Tour's BMW PGA Championship.]
Larry LeBlanc was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.
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