1. Greek Theatre Concession Contract Presented by: The Dept. of Recreation and Parks ARTS, Parks, Health, Aging and River Committee Presentation January 26, 2015 1

2. RAP Objectives for RFP Key objectives – Financial Performance with Mitigated Risk Revenue sharing minimum increases Level of Capital Investment Strategic Direction – Asset Management/Concession Improvement Plan First class, high quality venue and patron experience Vision for addressing trends in fan experience Food and Beverage approach – Event Activity Plan Guaranteed number and diversity of shows – Community Partnership Communications plan and outreach to broader community Neighborhood Feedback plan RFP was designed to stimulate creative and visionary responses to the four objectives 2

3. RFP Process Overview 3 Contract Award/Scope Review 12/10/12 PHASE I Immersion 5/7/13 Industry Research Benchmarking and Best Practices Report on Findings 11/27/13 PHASE II Community Meeting 1/29/14 Stakeholder Survey 2/13/14 Collection and Analysis of Responses Presentation to GTAC 2/21/14 Identification of Potential Proposers Presentation to Board of Rec & Parks 3/19/14 Draft RFP Posted 5/2/14 Special Meeting of Commission Task Force for public comment 5/16/14 PHASE III SAG to Propose Evaluation Panel Official Review and Approval of Evaluation Panel Final RFP Presented to Rec & Parks Board 5/21/14 Marketing Plan RFP Out for Bid 6/4/14 Informational Board Report presented at Commission Meeting 6/11/14 Mandatory pre- proposal conference and site walk 6/17/14 Q&A Received and Responded to Addenda Approved 7/23/14 8/12/14 RFP Response Due Independent Panel and Staff Review 10/1/14 Consideration by RAP Board 10/9/14 Further Consideration by RAP Board 10/23/14 RAP Board Approves Recommendation City Council Concurrence

4. Evaluation Panel Development Recruited (5) independent industry experts Key areas of panel expertise – Finance – Venue operations – Music and entertainment industry contracts – Public Sector administration – Parks and Recreation department oversight – Capital improvements and maintenance – Historic architecture 4

5. RFP Scoring Financial Performance: 30% Strategic plan & Direction: 10% Revenue Share: 10% Capital Investment: 10% Asset Management/Concession Improvement Plan: 30% Approach to req’d concession improvements: 6% Approach to potential consession improvements: 12% Approach to preventative maintenance plan: 12% 5

6. RFP Scoring Continued Event Activity Plan: 30% Operational Plan: 12% Food and Beverage Plan: 7% Event Plan: 6% Sustainability Plan: 5% Community Partnership Plan: 10% Communications Plan: 5% Reporting/Feedback Plan: 5% 6

7. Summary of Cumulative Scores 7

8. RFP Response – Financial Guaranteed Total Cash & investment (over 20 yrs) Live Nation $106M vs. Nederlander/AEG $96.246M Revenue Share (annually) Live Nation $3M vs. Nederlander/AEG $3.5M ( Plus $250K escalator every 5 Yrs) Over 20 yrs, Live Nation $60M vs. Nederlander/AEG $77.5M Capital Investment (over 20 yrs) Live Nation $40M vs. Nederlander/AEG $18.746M Community Trust (annually) Live Nation $300K vs. Nederlander/AEG N/A 8

9. RFP Response – Financial Pro Forma (Not Guaranteed) Projected Number of Events Live Nation 70 events (70 guaranteed) Nederlander/AEG 75 events (50 guaranteed) Projected Gross Revenue over 20 years Live Nation $972.2M vs. Nederlander/AEG $977.7M Projected Revenue Share over 20 years Live Nation $77.8M (based on 8% of gross) vs. Nederlander/AEG $97.8 (based on 10% gross) 9

10. RFP Terms - Capital Investments RFP included mandatory capital items – Repair/replace the North and South Terraces and the seats – Refurbish/replace the Roof and the Historic Portion of the Stage Structure – Refurbish/Replace Theatre seating RFP included potential capital items – Expand the South Concession Plaza and Refurbish all concession stands – Upgrade/Install camera surveillance system – Upgrade the sound and light systems – Refurbish the dressing rooms – Refurbish existing VIP spaces – Maximize the basement space – Increase stage house dimensions RFP designed to encourage innovative strategic direction 10

11. RFP Response – Live Nation Capital Investment Live Nation’s approach to capital - $25 Million in the first two years plus $15 Million after 10 years. $40 million total investment. Approach to required capital – Replace rather than repair the terraces – Replace rather than repair the roof and stage – Replace the seats Approach to potential capital – Expand the theatre house and roof to reveal historic columns and design a new roof (see renderings) – Investment in new sound and lighting – Upgrade the dressing rooms – Maximize the basement and office spaces for consumer space – Turn current office space into concession space – Upgrade VIP areas – Landscaping improvements to all grounds 11

12. RFP Response – Nederlander/AEG Capital Investment Nederlander-AEG’s approach to capital - $18.7 Million in the first two years and no committed capital funding after 10 years $18.7 Million total Approach to required capital – Repair rather than replace the terraces – Repair rather than replace the roof and stage – Replace the seats Approach to potential capital – Increase stage house dimensions with new proposed roof and reveal historic columns (see renderings) – Expansion of Redwood Deck/potential year-round restaurant – Addition of “grab-and-go” concession station – Redesign of the Zeus Deck – Additional video capabilities – Continue practice of yearly rental for sound and lighting from Schubert Sound – Upgrade VIP areas 12

13. Historic Greek Theatre Originally constructed without a roof covering. Historic Greek Theatre and stage shown left and from the street view below. 13

14. Current Greek Theatre Current Greek Theatre roof and stage Current Greek Theatre roof from above 14

15. Nederlander-AEG Renderings Nederlander-AEG’s proposed roof structure Model of separated roof structure Sketch of roof structure from the seats 15

16. Live Nation Renderings Proposed roof removal and addition of “floating” roof structure. Proposed roof structure from the street Proposed roof structure and stage 16

17. Summary of Evaluation Panel Findings: Financial Performance Both proposers exceeded the revenue sharing minimums set by the RFP. Total Minimum Guaranteed Proposal Value – Live Nation - $106 Million – Nederlander/AEG - $96.2 Million Live Nation's strategic direction for capital investment is advantageous in achieving RAP’s objective of the highest revenue opportunity coupled with risk mitigation. Nederlander-AEG’s proposed revenue share was higher, the panel believed the more substantial, long-term capital investment proposed by Live Nation better achieved RAP’s objectives. The Net Present Value of all aspects of Live Nation’s guaranteed proposal was higher. 17

18. Summary of Evaluation Panel Findings: Asset Management/Concession Improvement Plan Live Nation’s capital plan maximized current available space for an improved fan experience, supporting the ongoing goal of creating a first class competitive venue. Live Nation’s proposal guaranteed a slightly higher level of spending for preventative maintenance designed to maintain the facility at the first class, high quality level described in the RFP. Nederlander-AEG’s proposal included an innovative approach to improving concessions with a new year round restaurant and a locally renowned restaurateur. 18

19. Summary of Evaluation Panel Findings: Event Activity RFP minimum number of events – 50 Live Nation, 70 events vs. Nederlander/AEG, 50 events 2014 season number of events – 74 Live Nation’s Operational Plan committed to specific service standards and better fan experience to achieve the stated goal in the RFP of a first class, high quality competitive venue. Live Nation committed to implement new traffic solutions including adding parking fee into ticket price to reduce parking transaction times and parking congestion. 19

20. Summary of Evaluation Panel Findings: Community Partnership The Evaluation Panel recognized Nederlander-AEG’s successful history with the neighboring community and has a positive relationship with the community. – Nederlander-AEG’s proposal included new community events and outreach for the Greek Theatre Live Nation committed to start a Greek Theatre Community Trust contributing $300,000 annually to support diverse programming and conduct outreach to at-risk youth and underserved communities. Live Nation also committed to start a Cultural Arts Council, consisting of Cultural Arts and Community Service leaders to focus on bringing local talent to the Greek Theatre. 20

21. Evaluation Panel Recommendation Live Nation’s proposal commitments and overall approach better supports the objectives set forth by RAP in the RFP Evaluation Panel unanimously scored Live Nation’s proposal as the most responsive to RAP’s four objectives and recommended Live Nation be awarded the contract for the Operation and Maintenance of the Greek Theatre 21

22. Timeline Nederlander’s contract expires October 31, 2015 Goal was to execute contract under this RFP by end of April, 2015. This is necessary to have time to schedule talent for the 2016 season. 22