As dispute over Grammys charitable event emerges, evidence of a significant proposed Barclays discount

The Barclays Center plays an intriguing role--notably, its competition with Madison Square Garden and its apparent willingness to trade profit for prominence--in a music industry controversy that began simmering in late May.

As Variety reported in a 5/23/18 exclusive, Fired MusiCares Exec Accuses Grammy Chief of Steering Money From Charity to Cover Shortfall:

In a letter addressed to the Recording Academy Board of Trustees, which is holding annual meetings in Hawaii this week, former MusiCares VP Dana Tomarken accuses chairman/president Neil Portnow of choosing to steer money away from the charity in order to fund a deficit from this year’s Grammy telecast, and of brokering a deal to hold the organization’s annual Person of the Year event at a venue that left the charity with a significant loss in 2018 fundraising efforts, resulting in a projected $1 million for this year’s event, as opposed to $5 million in 2017.

MusicCares offers emergency help to those in the music business. Tomarken claims she was fired unfairly. The Recording Academy claims it will not reduce support to MusicCares clients, and says the venue decision did not sacrifice MusiCares’ interests.

The Person of the Year event was held at Radio City Music Hall (a Madison Square Garden company venue), which is not set up to hold a dinner, that affected attendance and ticket prices. Tomarken was negotiating with Barclays Center, "which has a venue agreement with MSG rival AEG, operator of Los Angeles’ Staples Center, where the Grammys have been held for many years — to hold the MusiCares dinner and concert there."

MSG ally Irving Azoff, according to Tomarken, told her that Portnow and MSG had agreed on Radio City, which meant they had to give up a better deal with Barclays.

On 5/25/18, Amplify advanced the story, quoting an Azoff MSG spokesperson that it was an internal issue for the Recording Academy.

The Oak View Group/Barclays competition

Amplify's Dave Brooks noted that Tomarken wrote that she'd become “aware of an existing agreement that had been crafted by Neil [Portnow] and Oak View Group (Tim Leiweke and Irving Azoff’s partnership),” which alleged that Oak View had agreed to sell GRAMMY Week packages dropped but Portnow had approved "dropping MusiCares from the package revenue stream" to  fund the telecast deficit. (The Recording Academy denies that.)

Oak View officials wouldn't comment, but, Amplify notes, "Pollstar, which is owned by Leiweke and is part of Oak View Group, avoided covering the story."

Next year, the Grammys will return to the Staples Center in Los Angeles. Amplify notes that AEG, the Staples Center parent, is at odds with MSG, but Barclays, which "does contract some limited services with AEG, the facility regularly plays host to Live Nation tours and is considered an open and independent building."

Brooks suggests the dispute "represents a separate venue fight — an ongoing battle between Barclay Centers and Madison Square Garden for shows in the New York market," noting that Oak View Group--part of the unsuccessful Nassau Coliseum revamp bid--is part of the Belmont Park arena plan.

The evidence surfaces, and a Barclays discount

Writing 6/1/18 in Billboard, In Deal for NYC Grammys, MSG Warned Recording Academy That 'No Events Could Be At Barclays’, Brooks cited an April 2017 email from MSG VP Joel Fisher to a Recording Academy executive, "When we went into this, we said no events could be at Barclays."

Writes Brooks:

Meanwhile, across the East River, Brooklyn Sports & Entertainment vice president Keith Sheldon was aggressively pitching MusiCares/Grammy Foundation then-vice president Dana Tomarken on having the MusiCares fundraiser at Barclays, offering to waive the rent for the night, and rendering plans to create a platform on top of the lower seating bowl that would provide enough floor space for 250-300 banquet tables that could be sold to corporate partners, as well as multiple stages and a large silent-auction space. Sheldon also had offered to cut in MusiCares on suite revenue and connect the charity's sponsorship team with BSE's own sponsor network for its concerts, events and Brooklyn Nets divisions.

While a Recording Academy spokesman told Brooks, in the publication's paraphrase, that "there was no reason to conclude that Barclays would have been a better or more profitable choice," that's not backed up with any numbers.

Billboard reported 5/23/18:

"The agreement with Radio City Music Hall was at least twice as expensive as the Barclays Center offer and that does not factor in any additional support we might have been able to secure from Barclays sponsors," Tomarken wrote

The upshot is not merely that the event went from $5 million net in the past to $1 million net when hosted at Radio City. It's that Brooklyn Sports & Entertainment was eager/desperate enough, whether for prominence or marginal profit, to offer such a good deal.

Brooks writes in the more recent article:

A spokesperson for the Barclays Center didn't comment on the deal points to land MusiCares but tells Billboard "the organization aggressively pursued the event in support of the charity's important fundraising efforts and the Grammy's return to New York for the first time in 15 years.”

Um, I don't think Barclays operates with charity as its main driver. There was a business reason for the offer.