A 360-Degree View on Partnerships, Premium and Other Trends from AEG
Nick oversees worldwide sponsorship sales for AEG’s portfolio of more than 130 world-class platforms including venues, sports franchises, events, tours, festivals, digital content, entertainment districts and real estate assets across five continents. With the ability to activate and engage customers at more than 10,000 events annually, the AEG Global Partnerships division generates more than $600 million in revenue annually.
Under Nick’s leadership, the division manages more than $3 billion in sponsorship and premium seating revenue and has forged agreements with more than 1,000 companies. In addition to managing the teams responsible for the analysis, budgeting and forecasting for its sales strategies, Nick is responsible for identifying and cultivating relationships with emerging companies and categories. He also oversees the maintenance of more than 4,500 partnership agreements.
Nick shared his take on building relationships, the importance of small businesses, what’s happening in premium seating, crypto deals and more with podcast host Jim Andrews. Below are edited highlights of the conversation.
Jim: You and I spoke recently, and I was struck by something you mentioned. We talk a lot about sports being fully back in person this year, but mostly from a fan standpoint. But you have seen the impact on business and how being together with people has created opportunities that simply didn’t exist when we couldn’t attend events. Can you elaborate on that?
Nick: Certainly bringing fans back is the central theme of our business in live entertainment, but from a commercial standpoint, we are in the relationship business and those relationships are best created in person. So when you have the ability to bring your current clients or prospective clients out to a live event that you are discussing a potential partnership with, that’s the best platform for those discussions to take place.
There are two parts to that theme that we are seeing crystalize right now, which are internally and externally. Focusing on the internal standpoint, from the employee perspective, that’s where our best work gets done. The collaboration and being together with our colleagues at a live event allows us to make adjustments and think of new ways we can activate or bring a live event to meet our sponsors’ objectives in a better way. That collaboration internally has led to great new ideas, which create new revenue streams for us. That internal component has been central to some success we have had in the recent past and in the present day.
Externally, I would highlight an event we had recently in Las Vegas. We were the promoters for the El Clasico match between Real Madrid and FC Barcelona. We hosted clients in our suite, including Manny Rodriguez (chief marketing, experience and customer officer for UCHealth).
Jim: A great guest on this podcast!
Nick: He came out to enjoy the match with us and we talked with him about our partnership we have with UCHealth in Colorado around some of our music assets. We had our friend Bill Melo from Toshiba there and we spoke about business we do with him in Berlin and London. We had other partners and clients there speaking about the whole AEG portfolio, and it was all centered around them being at that game, so business gets done in those settings of live entertainment.
Jim: It’s great that you’re back to creating relationship with new companies just coming into the sports marketing space. What are some of the categories you are seeing emerge?
Nick: There seems to be a rush of new opportunities and new categories. Those live events give you an opportunity to host and meet with those new folks and learn a little bit more about what their businesses are doing, whether it’s private equity making an investment in a startup, etc.
One theme we are seeing is the objective around small businesses, whether you are a small business yourself or you are a major business and your focus is on how you can cater to small businesses—in the financial sector, the legal sector, software as a service—all of these critical components to running any business. We see a lot of those folks using our platforms to convey to small business owners that they can help their business grow.
Jim: I’ve seen some of that activity in the past where it centered on pass-through rights, with larger companies “sharing the wealth” of their sponsorships with their small business customers. Are you seeing any of that?
Nick: Absolutely. There is a component of some bigger businesses doing good to the smaller organizations that are beginning to grow. A lot of times we create partnerships that have pass-through abilities, depending upon the category, where one business can say to another, “We purchased this inventory from AEG; we have this platform, and we would like to bring you on board.” That’s a great component. We want any of our partnerships to make that partner’s business better. A lot of times that means they need to provide visibility to a business partner of theirs. That has been very successful for us in several aspects of our business.
Jim: You also mentioned in our conversation that one of things you’re watching is how the marketplace is approaching the “over-supply” of jersey sponsorship opportunities with MLB and NHL teams in the market with first-time offers, as well as NBA and MLS teams that have rights available. What’s your take on how those patches are being bought and sold?
Nick: It’s certainly a buyer’s market. There is a great deal of opportunity for brands to determine what is best for them. There is also tremendous opportunity for teams when you create that type of new inventory. Each of the sport disciplines have their intricacies, whether it’s through the ratings they have or the size of the logo. In hockey you have a patch and the helmet. Soccer you have a sleeve and the chest. Baseball has the prominence of visibility for such a large number of games.
Each are so unique, so for us, we try to focus on the inventory we have around the teams that we own and not selling that partnership but going out and building that partnership. That’s a big theory for us. We don’t sell anything. We build things with others.
We recently announced an extension with Herbalife, which has been the only jersey chest partner of the LA Galaxy dating back to 2007. It was critical for us not to take that to market because we have had such success activating that partnership, and that longevity means a lot to us. That we were able to deliver on several iterations of that contract means that we over-delivered, candidly.
What Herbalife brings to the team is authentic integration of their products, which has become a real systematic process for the team and the training staff. Herbalife has global ambassadors all over the world who are, in a sense, Galaxy fans who help spread our brand. We have games that are played internationally, which creates greater reach for the team, but also the local community is a huge aspect. Herbalife is based here at L.A. Live. We are based here. We give back to the community in which the Galaxy plays. So for us it goes much deeper than just their logo on the front of our jersey.
Jim: When you are discussing renewal with a partner that has been around for such a long time, some of the conversation must be around how can the partnership be refreshed for fans and consumers so that it stays relevant and engaging. You don’t want to get complacent and conduct the same activations after 15 years. Does the aspect of what’s new enter into it?
Nick: Absolutely. With many of these partnerships, such as Herbalife, when you look back there are elements like digital marketing that are a lot different than in 2007. A social media strategy was not contemplated! Now, to have a strategy in the digital space that is anything longer than six months is probably archaic.
So having that sense of relationship and partnership with an organization is critical as you create flexibility throughout the duration of partnership so you can pivot to what matters to you or to the client at a particular time. When we look at the Herbalife or any extension, it’s about the people we are doing the business with and making sure we are incorporating a lot of the things we added into the partnership. For example, a lot of the integration of Herbalife product was not contractually committed to. It was something we wanted to have happen; we knew it was good for the brand. But it was also something we believe in. Now it becomes a contractual component.
You catch up to the times a little bit and you also keep some open space for what’s going to develop in the future so we can be creative together.
Jim: There’s been a great deal of discussion about the future of premium seating related to the new inventory that has come on the scene with new stadiums and arenas, as well as whether the business model of long-term leases will shift to accommodate the different needs of buyers. With all of the venues that are part of the AEG network, what developments are you seeing in premium?
Nick: Competition is wonderful and what you have in the premium space, and really in all of sports and entertainment, is really great competition. The winner there is the fan.
At times, that’s what is the most interesting and exciting opportunity in representing the AEG portfolio, and the most challenging, as well: Where to begin with a client and how do we grow the client. What we face is that there are different buyers and objectives based upon genre—music has its own unique aspects to how a brand can show up and resonate with fans versus sports—and you certainly have regional differences, whether that’s throughout this country or in other countries where we operate.
We try to take a dual approach. We look at it as an opportunity for a brand to come on board with AEG through a multi-asset partnership that can span anything in our portfolio, whether it be music, AXS ticketing, our large venues, or our sports teams—or we look at individual properties. Russell Silvers and myself have set up an infrastructure here around asset ownership initiatives, so we have folks who wake up each day thinking about a particular property or properties, but they have the ability to include the rest of the portfolio through their colleagues. So it’s just an arm’s length away to make a partnership global very quickly, or you can focus individually on a particular entity that we have. That formula has been very successful.
So now, you look around at the new venues or renovated buildings—we just released a big announcement of the renovations we will be doing over the next three years at Crypto.com Arena—and the premium is wonderful. Allegiant Stadium in Las Vegas has unbelievable premium. That’s in the portfolio of AEG and ASM, but outside our portfolio there are unbelievable competitors, whether it’s SoFi Stadium or others who have great premium spaces.
So the premium customer has an expectation of what they expect when they arrive and what they are willing to pay. We need to differentiate between the price component of what we are seeing as an investment from that fan and what the exchange is in terms of the value they are getting back.
The team is critical to that. You think about the best teams in their particular sport and you are going to go see that team play no matter where you are. I’ve sat in some pretty bad seats for some great events! So there is that component, but you want to have a premium seating experience that resonates whether the team is playing great or whether they are struggling.
I think where AEG has a unique proposition, is that we have such major markets all over the world, and such different genres of events. If you think about what the future may hold for us, I think you will have the opportunity as a premium customer of AEG to have a membership into a place that allows you the flexibility to go to Crypto.com Arena for a Lakers game or a Kings game, and then pivot to T-Mobile Arena in Las Vegas, or maybe to a music festival in our ecosystem. Now all of a sudden, you’ve got a pass that allows you a different type of experience than just purchasing one singular property.
Jim: I’d be remiss if I didn’t ask about one of the biggest deals you—or anyone—has done recently, and that is of course the naming rights for Crypto.com Arena. With everything that is going on with the cryptocurrency market these days, questions arise about the stability of the companies in that space and contract terms that protect properties, etc. Am I correct in assuming that was all part of the conversation as you were putting that deal together?
Nick: Absolutely, there was a great deal of review from our side—protections, decisions made around risk and reward, etc. The predicament we found ourselves in was an opportunity to refresh the building with a new partner looking into the future but also, we were in a relationship with Staples that would allow them to continue on as the naming rights partner in perpetuity with revenue that was not advantageous to us.
I give great credit to our owner for his belief in what our vision was for that, and to Todd Goldstein for his initial concept of taking the rights back and creating an opportunity to go out to the market and find a new partner and a new revenue stream for the future.
Doing that comes with great risk. When you do a 20-year partnership, no one can know the future exactly, no matter what the category is. We have certainly faced that across our portfolio with other naming rights we have done. But we feel really confident with the decision that we made, the protections that we have and most importantly the people we did this partnership with and the product they have as a marketplace. We are excited for the future with them and have great confidence.
Jim: You’ve been in the partnership game for a while now, Nick, so I would love your perspective on whether it’s easier or harder to sell sponsorships and partnerships now than it was when you started out more than 15 years ago. Thoughts?
Nick: If you think about all of the new advantages we have from a technology perspective—the ability to do a video call and the data we have with so much behind it that allows us to understand where we are missing or where we are doing well—that’s actually a key point of differentiation for AEG.
We own AXS, which is our ticketing company. So we are selling 32 million tickets a year across every type of live entertainment, whether it’s a music event at a small club or it’s our white-labeled music festivals, or it’s our large arenas and sports teams. What we are able to do with that first-party data is understand the buying habits of that consumer—where they are spending their dollars.
What we can do with that is formulate a strategy to highlight enhanced experiences for them into the future that we hope they will purchase. AXS has afforded us some great knowledge and data that we can pull from, but also develop commercial inventory that partners can come on board with and help us further enhance that, whether that be the buy-now-pay-later category, or maybe it’s through travel and the opportunities for hotels and airlines and car services to all come into the live event experience and the ecosystem of purchasing a ticket and help enhance the experience before a consumer even gets to an event and also as they leave.
But back to your question, at the end of the day, if you put all the pluses and minuses of how hard or how easy it is to sell, it is the same today in terms of the total number of good things and bad things that exist as it was ten years ago.
Some of the best habits that we have are things that we were doing 15-plus years ago. You don’t lose any of those. The hope is that you learn from the things that are not making your business better and that you evolve. I think we have done that as an industry. At the center, it is a relationship business. We have a platform that we think can message a brand’s product or service to a unique demographic of fans who are fanatics for a sports team or music festival. That hasn’t changed.
We may think it has gotten harder because the industry—and brands—have gotten smarter. But in theory, that is a great thing for all of us. We have more information. We are able to share that information more readily than we could have 15 years ago. An activation that took place last night has already made news this morning. Fifteen years ago it would have taken a while for you to hear what is happening. That has enabled us to see a good idea and start thinking about how we can do something in that manner and continue to evolve.
With the industry getting smarter, it has gotten better, but it does make you accountable. You have to deliver on these projects more than in the past, when you just “felt like” it was doing good work!