Arena Concerts Generate Modest Revenue for Tech

Paul McCartney. Enrique Iglesias. Pitbull. Jason Aldean.

These are some of the artists who have performed at the United Supermarkets Arena (USA) in Lubbock over the last year. But surprisingly, no resulting millions of dollars have poured into Texas Tech’s coffins.

The arena generates only modest revenues, enough to cover its expenses. It made $155,340 from concerts and $135,842 from concessions and merchandising sales during events from January 1, 2014, to April 28, 2015, according to information provided by Ronny Wall, associate general counsel for the Texas Tech University System. The data were obtained through a Texas Public Information Act request.

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The Trans-Siberian Orchestra has performed at Texas Tech several times, the last time in 2013. Photo by Texas Tech Today, the university’s official news source.

Meanwhile, expenses for the same period totaled $244,546.93, suggesting the arena broke even by a margin of only about $55,000.

For the same period, the arena generated $4.3 million in ticket sales, but the proceeds did not go to Tech because most of the ticket revenue goes to the tour promoters as well as the artists and their tour-related expenses.

Kent Meredith, assistant vice president for Auxiliary Services at Tech, said the money concerts generate stays in the arena’s operating fund; no revenue is pulled out to support other parts of the university. Tech expects additional revenue of $50,000-60,000 from remaining concerts in 2015, depending on the number and type of shows booked, he added.

In spite of recent successes, the arena struggles to bring popular artsists to Lubbock because the city is a secondary media market. Their choice in Texas is usually Dallas, especially because of the convenience of the American Airlines Center, Meredith said.

Houston, San Antonio and Austin are often the second, third or fourth stops when a music star tours the state.  If the tour has more stops, El Paso and Lubbock may be next on the list of considered locations, Meredith said.

Lubbock ranks 144th in the country in the size of its media market as of Jan. 1, 2015, according to Nielsen‘s Local Television Market Estimates. The arena, however, has a competitive advantage in attracting artists because of its capacity, Meredith said. For that reason, its best marketing tool is selling tickets.

“We could be here with 15,000 seats, but if [performers] don’t sell tickets, they’re not going to stop at Lubbock,” he said.

Iglesias and Pitbull performed at the Arena on Feb. 6 because they decided to play smaller markets after playing the major ones, such as Houston and Dallas, Meredith said.

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Cindy Harper and Kent Meredith. Photo by Halima Fasasi.

But other big names? Hard to get!

“Madonna, we fight to get her here,” Meredith said. “When Justin Bieber was big, we tried to get him here.”

Some major acts cannot be performed at the USA because sometimes the space cannot accommodate the physical dimensions of the artist’s tour production or the revenues cannot meet the artist’s guarantee.

Tech does not buy shows itself, but instead works with promoters such as AEG or Live Nation.

“You know, when Britney Spears came here in 2002, I think her guarantee was $650,000, and so you have those kind of expenses if something were to happen, the promoters are still on the line for all that money,”  Meredith said. “That’s a lot of money for a department at Texas Tech, which explains why we work with promoters.”

John Osborne, president and CEO of Visit Lubbock, said that although his organization doesn’t directly pay to book concerts, it always promotes them because visitors want to know the fun things to do in Lubbock—including events, attractions, shopping, restaurants and more.

“Concerts are just one component of the many exciting things Lubbock has to offer,” Osborne said.

Cindy Harper, associate director of the USA, said concerts at the arena benefit Tech because they provide entertaining and sometimes also educational experiences for the university community.

Osborne said concerts also generate money into Lubbock’s economy because of spending from outside visitors.

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The arena on an “off” day. Photo by Halima Fasasi.

McCartney’s decision to kick off his North American tour in Lubbock last October generated not only national but international attention, Harper said. McCartney announced he was thrilled to play in the hometown of one of his idols, Buddy Holly.

Meredith said concerts at the arena not only add to the quality of life in Lubbock, but also serve as a recruiting tool for potential students.

“You know, when George Strait went out for his final tour, he mentioned Lubbock and how supportive they were of him,” he said. “It was a national press conference.”

Added Meredith: “Sometimes, it puts us on the map.”

About Halima Fasasi

I am a Journalism student from Arlington, Texas. Currently, I'm in my junior year at Texas Tech University. I'm an apprenticeship with The Hub for the fall semester. I am interested in creating a multimedia angle for the website.