How STAPLES Center Navigates a Shifting Marketplace for Premium Seating Sales
Michele Kajiwara has been with AEG/Staples Center since 2003, recently leading her team to four consecutive years of $100 million in collective revenue. She also currently serves as the president of the board of advisors of the Association of Luxury Suite Directors.
Michele joined host Jim Andrews for an All Access Interview exploring the impact of 2020 events on premium seat owners, and how venues can maintain and build relationships post-pandemic. Below are edited highlights of the conversation.
Jim: Coming out of 2020, can you discuss how the relationship between a venue like Staples Center and your premium seat owners has changed in terms of the contracts, communications and what you are hearing back from those clients?
Michele: The relationship has changed a lot! Prior to the pandemic, when someone made a decision to spend money with us, they were focused on LeBron, or the building, or the client experience. Signing the contract was similar to renting a car—just go through the pages quickly. Now the abatement and force majeure clauses are at the forefront of everybody’s mind, along with the question of, “How am I protected?”
Had it not been for this situation, we would not have had conversations about making adjustments to those contracts and needing to future proof in a meaningful way. We are listening to our members, being more sensitive to their needs and to how we can accommodate them. After a lot of dialogue with our members and internally, we have met in the middle. We have been able to maintain a contract that still protects the company but also makes provisions and makegoods that give back to the client that make them feel protected, appreciated and rewarded for being part of our ecosystem.
Jim: Can you share what some of those adjustments have been?
Michele: On the premier seat side, we have certain percentages assigned to each of our anchor tenant teams. Some of those were not too favorable to our members, so we have redistributed those percentages to be more beneficial to them. We also now have language that says if there is no season you will receive a 100 percent refund. That was not called out specifically before, because no one anticipated it. We had lockouts and provided makegoods, but this is different, and the impact has been so much longer.
Jim: Going into 2021, one of the new realities for everyone, including those in sales, is that we are all more familiar and comfortable with virtual conversations and meetings. Do you expect that virtual relationship-building will continue and can it have a positive impact on sales that perhaps we never anticipated pre-pandemic?
Michele: It absolutely can. One way is in efficiency. We have had to create brevity around our conversations, because everyone’s schedule is so concisely organized into back-to-back Zoom meetings, that you have to become great at setting an agenda that works in these tight time slots. We have also seen the efficiencies of not driving around Los Angeles in traffic to get to an appointment and not being able to do any meaningful work in that time. Working virtually maximizes our capacity and mitigates all of that dead time.
Jim: You and your team are in an interesting position in that you sell independently from the teams that play in your venue, which is quite a different dynamic than many other arenas and stadiums. How does that impact your sales efforts and what types of relationships you need to form with the teams to access benefits and inventory that they control?
Michele: I don’t know another building with premium seating that functions like we do, especially when you consider we have two NBA teams, in addition to an NHL team and a WNBA team. It’s unique in that we have to have independent relationships with each of these teams to drive additional benefits for our members.
It’s a handicap in some ways because we don’t have some of the assets like player appearances and court access that the team’s season ticket members get, even though conceptually ours is a season ticket also. Each team is selling those assets and we have to play second fiddle within that system, but we all also recognize there is an overall goal of selling all of the inventory and benefiting all of the fans.
Jim: Another compelling situation for Staples Center is that you have some major new competition in the market with the opening of SoFi Stadium, plus a new arena for the Clippers coming online in the next few years. Does that change anything about your approach to premium sales?
Michele: LA is a crowded market, but it clearly can sustain all of these facilities. It’s healthy competition that keeps us sharp. When it comes to an entertainment package, Staples Center is uniquely positioned with the events we host. Being the incumbent in market, that is ours to lose. Losing an anchor tenant in the Clippers will obviously impact us the most and it is something we are addressing in our contracts in terms of what their moving means and how we can offset that for our members.