San Antonio City Council voted 9-1 Thursday to award Ticketmaster a five-year, multimillion dollar contract to continue to provide ticketing services to area sports and entertainment venues.
After two hours of discussion, which covered the merits of a competing proposal from the Tobin Center for the Performing Arts and a failed motion to delay the vote, City Council also directed staff to determine how the revenue generated from the deal could further support local arts and entertainment organizations. Ticketmaster will contribute $50,000 annually to that City fund as part of the deal; the Tobin Center had proposed a $500,000 contribution.
Council members weighed giving a globally recognized company with the highest score against a local nonprofit entity that the philanthropic community, City, and Bexar County spent millions to establish. The conversation on Thursday came amid changes to the way City Council will be updated on high-profile, big-dollar, or complex contracts in the future – with more lead time to give members more time to digest and understand them.
Ticketmaster, which is owned by entertainment giant Live Nation, scored 80.14 out of 100 points on the City’s contract scoring matrix while the nonprofit Tobin Center for the Performing Arts scored 60.60 and SquadUp, a relatively new California-based event and ticketing service, scored 36.97.
“The biggest concern that we need to have is can the ticketing service perform and draw an audience, and that’s where the scoring came in,” Mayor Ron Nirenberg told the Rivard Report.
Patricia Muzquiz Cantor, director of the City’s Convention & Sports Facilities Department, said Ticketmaster’s 35 years of experience, ticket sales, and enhanced marketing abilities “set Ticketmaster apart from the other respondents.”
Another key element in the contract was price to the consumer, Cantor said. Ticketmaster guaranteed it would cap online service fees to increase no more than 20 cents every two years, while Tobin Center’s online service Tobin guaranteed a 50-cent cap.
Councilwoman Adriana Rocha Garcia (D4) said the City Council should follow its own processes and use the matrix scores to inform its decision.
“I think that we need to stay fair to the process,” Garcia said. “I don’t think we need to punish [a company] who has done everything that they were supposed to” to favor a company with a lower score.
Councilman Clayton Perry (D10) said awarding a contract to a lower-scoring bid also “sends a bad signal to businesses” that will see a company submit a “winning bid but get overturned by this Council.”
Councilmember Roberto Treviño (D1), who wanted to delay the vote, ultimately cast the lone vote against Ticketmaster because of an 11th-hour correction City staff made to how
“I just want to take my time to dig a little deeper [into the proposals,” Treviño said on the dais. “This [could have] a transformative impact that is an opportunity for the arts.”
The presentation City staff delivered on Wednesday inaccurately represented how the Tobin Center’s proposal would fund the arts and entertainment fund and failed to mention the $300,000 that would be taken out of its profits for Tobin’s resident companies, Treviño noted. On Thursday, City staff provided an updated presentation with additional information.
Treviño’s motion for a delay, which ultimately failed on a 6-4 vote, was supported by Council members John Courage (D9), Manny Pelaez (D8), and Melissa Cabello Havrda (D6). Councilwoman Rebecca Viagran (D3) was absent during both votes.
The Ticketmaster contract will produce $2 million annually in revenue for the City, according to City estimates.
Ticketmaster also offered a $250,000 signing bonus and additional one-time payments of $10,000 to make improvements to the Cockrell Theatre box office and $30,000 to establish another box office at the Alamodome. The five-year contract has a five-year renewal option.
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Nirenberg suggested that the City and Bexar County, which both provided funding to build the Tobin Center, could work together on contract terms for the nonprofit to reapply for the contract in five years.
The Tobin Center’s proposal would have contributed up to $500,000 to the citywide arts and entertainment fund annually and produce an estimated $1.5 million in revenue to the City. Additionally, nearly $300,000 out of the Tobin Center’s profits would be divided among the seven performing arts companies housed in the Tobin, said Michael Fresher, Tobin Center president and CEO.
Over 10 years, the Tobin’s proposal would have provided $5 million for the arts fund, $5 million for the Tobin resident companies, and $10 million for maintenance and operations of the Tobin itself, he said.
A City analysis of the Tobin Center’s proposal showed slightly lower estimates for revenues and profits. But, as City staff noted, the estimates are based on historical ticket sales and costs rather than projected future numbers.
The Tobin, which opened in 2014, relies heavily on philanthropic donations, but it has established educational programming and a subsidiary that books and promotes entertainment here and in other major cities.
“[The Tobin Center] gets no government funding at all,” Fresher said, which is rare for a facility and city of this size. “There’s all these different entrepreneurial ways that we are looking to earn our [revenue].”
The idea to provide outside ticketing services to generate revenue for the Tobin and its residents started about five years ago, Fresher said.
Groups such as the San Antonio Symphony, Ballet San Antonio, and Opera San Antonio that perform at the Tobin receive funding from the City. After the symphony nearly dissolved in early 2018 because of financial troubles, the City and County have been trying to help the Symphony board find sustainable funding for it.
Although the Tobin didn’t get the ticketing contract, its proposal to build a sustainable funding mechanism for the Tobin and its resident companies took center stage this week and sparked a new policy discussion over how revenue from ticket sales could be used to support the arts in San Antonio.
“One of our goals was to get the concept of additional arts funding on the table,” said Fresher.
As a result of the discussion, the City is going to at least “curate new arts funding,” he said.
The discussion could lead to an additional source of City funding for art groups beyond the nearly $7.5 million in next year’s budget. Arts agencies funded through the City’s budget are selected through an application process on a three-year funding cycle.
Assistant City Manager Carlos Contreras told Council members he’ll report back before Oct. 31 with some options and a recommendation for how to enhance arts and entertainment funding.
How much money flows from ticket revenue into arts funding also would need to be discussed, as the City’s Convention & Sports Facilities Department has its own budget and long-term projects to plan for, said City Chief Financial Officer Ben Gorzell.
The Arts and Culture Department is working on a strategic plan for performance arts, said department Director Debbie Racca-Sittre said, so this directive could tie into that work. But Oct. 31 is a tight deadline, she added.
“This wasn’t something that we were talking about a week ago,” she said. “It’s something we have to digest and see what it looks like.”