Is Britney Spears a big risk for Alerus Center?
Grand Forks is unique to Britney Spears' current nationwide tour as it's the smallest metro area she's visiting on her "Circus" tour.
It's also one of the most remote, meaning there is a lot of effort that goes into staging the concert thanks to a huge staff and tons of equipment.
She's demonstrated the ability to fill arenas to the brim wherever she goes, from New York to New Orleans, and with ticket prices that, on average, are higher than those offered at Grand Forks' Alerus Center.
Yet she's bypassing Minneapolis, where her tour sold out in April, and ignoring the Fargo metro area, which has double the population, and Winnipeg, Canada's eighth biggest metro area.
So, why perform in Grand Forks, a metro area of less than 100,000?
Alerus Center Executive Director Steve Hyman said he couldn't talk about how much the facility guaranteed Spears until after tickets go on sale Saturday. However, he said, the Alerus Center landed the show because of a professional relationship he's had with tour promoter AEG Live going back 20 years.
"We looked at it," said Fargodome General Manager Rob Sobolik of booking the "Circus" tour. "We might have wanted it, but this time it didn't work out."
One building, he said, can't have everything.
Sobolik added that the Fargodome doesn't have a concert fund like the Alerus Center.
"There's a point that all buildings get to that they look at it and say, 'Mmm, we can't go that high; feel free to head down the road.' But those thresholds are different for each building."
The concert fund is a pool of $250,000 that allows the Alerus Center to take some risks in booking concerts without it having a direct impact on funds used for operating the facility. The Fargodome does take risks, but that will affect operations.
But is the "Circus" tour a big risk? It's certainly got an excellent track record so far, which, according to Hyman, surprised even the promoters.
In the average number of tickets sold for each concert, "Circus" is the nation's top concert tour. According to Pollstar magazine, Spears sold an average of 20,498 tickets per show this year, which is 853 more than Bruce Springsteen.
In the average gross revenues, "Circus" is second only to the superstar team of Elton John and Billy Joel. She grossed a little more than $2 million a show. Sir Elton and the "Piano Man" raked in $2.1 million.
"Circus" has had a pretty consistent performance, too. Fan sites citing Billboard data indicate that, on the first North American tour, she sold every seat in every arena in the first 29 shows. Data for other cities are not available.
If Britney did the same here, she'd sell 18,845 tickets, grossing $1.5 million, not including revenue from tour merchandise such as T-shirts and CDs.
The economic impact in Grand Fork County would hit $2.1 million, according to an estimate from the University of North Dakota's Bureau of Business and Economic Research. That doesn't include the impact of concertgoers dining out or shopping before the concert. The bureau is doing research to determine that pattern.
A big chance
"It's totally amazing," Hyman said. "Just to be given the opportunity was an eye-opener and then to really talk seriously about it ..."
On the other hand, he also said, "This is truly a litmus test for this regional market. Are we still a market?"
"I'm telling you, the eyes of the concert industry are on us," Hyman said. He's holding dates for two other major concerts, he said, and what happens with Britney will have an impact on those concerts.
Nuts and bolts
Details of the deal that Hyman struck with promoter AEG Live are not public, and AEG Live officials weren't available.
Typically, promoters of major concert tours require a guarantee from the venue, according to economics experts Marie Connolly and Alan Kreuger. That is, the artist and promoter will make a certain amount of money from ticket sales and recover expenses such as unloading equipment and advertising in the local market.
If the ticket sales do not add up to that guarantee, it might be up to the venue to pay off the difference. That's how the Alerus Center concert fund lost $719,000 last year, after disappointing ticket sales to some concerts, such as Neil Diamond's in November.
So far, there has not been a huge transfer of money from the concert fund, which also is meant to subsidize operations, if necessary. The Grand Forks city finance office said it's only transferred $125,000 to the Alerus Center out of $250,000 the City Council authorized.
The way venues make money is usually through parking fees and food and beverages, according to Connolly and Kreuger.
If every concertgoer at the Alerus Center spent $10 on food and all 4,198 parking spots were filled, the Alerus Center would make $209,000.