Wembley Arena, London, top left, is now part of a destination development called Wembley Park.
Increased bookings, sponsorships and premium seating options are a few of the ways AEG Facilities plans to build revenue at the iconic Wembley Arena, London, which they will manage for the next 15 years with options.
AEG was selected to run the venue in January, but had to await approval from the Competition Commission, the U.K.’s independent public body which conducts in-depth investigations into mergers and markets to guard against possible monopolies. That approval came Sept. 2.
The full management agreement is between AEG Facilities and Quintain Estates and Development, which bought Wembley Arena, included in its purchase of 44 acres now being developed as Wembley Park, in 2002. Wembley Arena sits in the heart of the development Quintain is executing there, including a 4* Hilton London Wembley Hotel, now open, and London Designer Outlet, which opens Oct. 24.
James Saunders, Chief Operating Officer at Quintain, said in a press release, that the new development should drive over 8 million visitors a year to Wembley Park.
Rod O’Connor, executive VP of AEG Facilities-Europe, and Bob Newman, president, AEG Facilities, view the increased foot traffic at the destination development as a major plus for the 12,500-seat Wembley Arena.
They also consider the fact that they manage and/or own several venues in London a plus. The major issue, as far as the Competition Committee was concerned, is AEG’s 20,000-seat 02 Arena in London, which opened in 2007. In London, AEG Facilities also operates the Hammersmith Apollo, 5,000 seats; Indigo at The 02, 2,400 seats, “and this year we took on Hyde Park, 60,000-capacity, for summer festivals,” O’Connor said. AEG Facilities has a new five-year management deal with Hyde Park. “Like Los Angeles, what we’ve been able to do in London is take multiple venues and offer content offerings across the spectrum.”
Newman also likened the scenario in London to Los Angeles, with the 7,000-seat Nokia Theatre next door to the 20,000-seat Staples Center, both at L.A. Live, a destination with hotels, retail, restaurants and residential, just like Wembley Park. AEG Facilities also manages multiple venues in Stockholm, Sweden, including a 35,000-seat stadium, 16,000-seat arena and 8,000-seat arena, Newman noted. AEG is able to populate all of them effectively.
“The seat differential between The 02 and Wembley is very comparable to Los Angeles and we truly view them as complementary buildings. Both will have a very focused event mix tailored to their locations,” Newman said.
“The 02 is like Staples Center, an extremely busy building that is already being stressed as far as availability goes. That’s why it makes sense to us. Wembley Arena complements The 02. They are going after different things,” Newman said.
Since The 02 Arena opened, ticket sales have doubled in London, O’Connor added. Attendance at live music events only at Wembley Arena was in the “one-million to 1.5-million range before The 02 came in and it’s over 3 million now,” he said.
Including sporting events, it’s even higher. According to Venues Today’s Hot Tickets database, The O2 Arena alone drew 2,103,440 attendance to 176 shows, grossing $169,101,905 in a 12-month period from July 2012-June 2013. That includes sporting events and family shows and both Wembley Arena and The 02 have a history in sports, though there are no big indoor team sports in the U.K.
John Drury, GM of Wembley Arena, provided attendance numbers for that venue as 542,700 in 2013; 520,250 in 2012; 742,000 in 2011; and 603,500 in 2010.
Sporting events in the U.K. which traditionally played Wembley Arena in the past include Premier League Darts, Snooker Finals and billiards tournaments. UFC currently plays Wembley Arena and The 02 and the ATP World Tour Finals, the final major event for men’s tennis, plays The 02, as do one or two National Basketball Association and National Hockey League games.
O’Connor said Wembley Arena has been averaging “north of 100 event days, but not by much.” The goal is a full event calendar. The 02 will do 200 event days, some multiple events, and that’s a full event calendar, he said.
Quintain approached AEG Facilities about managing Wembley Arena a year ago, O’Connor said. They have had to stand down while the Competition Commission reviewed the deal, only able to accomplish some “mechanical things,” but it’s full steam ahead now.
Drury, who has been general manager for Wembley Arena under Live Nation management and for Quintain in the interim, will stay on with AEG. A division of Compass manages the food and drink contract, also a keeper. “We may add some resources on the content side because we do want the building to be busier,” O’Connor said.
AEG Facilities will switch ticketing to AXS, its in-house ticketing arm, in the very near future.
Wembley is an iconic London venue, opened in 1934, and featuring a long list of firsts and sellouts for the elites of live music. Artists want to play there, which helps booking, O’Connor said. It is a different size than The 02 and has more availability, for now.
“If we are more strategic about the opportunities that come into the London market we can actually grow the market. If you look at ticket sales for Wembley before The 02 came in and look at ticket sales between the two buildings now, the market share has almost doubled,” O’Connor said. “London is an incredible live music market.
And the commercial district Quintain Estates is building out is a major foot traffic driver for the area.
The major weaknesses, other than more bookings, are in sponsorships, “not much going in there right now,” O’Connor said, and premium seating, which does not currently exist.
“We were held out of the process during the review. We haven’t had a chance to get a real look at all of that yet,” O’Connor said.
Wembley Arena represents “a great opportunity, given the location and iconic history of the arena, to increase the event load and to maximize our corporate partnerships and premium seating opportunities, including potential packaging with The 02 and our other London assets,” Newman said.
Interviewed for this story: Rod O'Connor, 44 207 7577550; Bob Newman, (213) 763-5425