HomeMy WebLinkAboutCSD-2023-233 - Execution of Talent, Suite, and Sponsorship Agreements at The Aud
Community Services Department www.kitchener.ca
REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Bob Cheyne, Director, 519-741-2200 ext. 7689
PREPARED BY: Jeremy Dueck, Manager, 519-741-2200 ext. 5264
WARD(S) INVOLVED: ALL
DATE OF REPORT: April 15, 2023
REPORT NO.: CSD-2023-233
SUBJECT: Execution of Talent, Suite, and Sponsorship Agreements at The Aud
RECOMMENDATION:
That the Manager of The Aud be authorized to execute talent offer sheets and talent
purchase agreements, suite lease and rental agreements, as well as sponsorship
agreements at The Aud in accordance with the approval parameters set out in CSD-2023-
233; said agreements to be to the satisfaction of the City Solicitor; and further
That the Director of Sport be authorized to execute sponsorship agreements, pertaining
to The Aud, in accordance with the approval parameters set out in CSD-2023-233; said
agreements to be to the satisfaction of the City Solicitor.
REPORT HIGHLIGHTS:
The purpose of this report is to provide delegated authority to staff to execute key business
agreements between The Aud and a variety of external stakeholders.
Assigning the Manager of The Aud (or a designate) with authority to sign these key business
agreements would: improve Tlive entertainment, improve
business operations and revenue generating opportunities, provide transparency and
accountability, and align with standard operating procedures and industry best practices.
BACKGROUND:
In 2023, staff reviewed business practices at The Aud to identify opportunities to increase
revenue generation (including attracting more live entertainment to the facility), improve
business operations, and improve the customer experience for external stakeholders all of
which would benefit the municipality and the community as a whole.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
REPORT:
Based on those reviews, staff have identified three areas where delegating authority to staff to
sign business agreements would achieve the objectives stated above:
1. Suite Lease and Suite Rental Agreements
2. Talent Purchase Agreements
3. Sponsorship Agreements (related to The Aud)
1. Suite Lease and Suite Rental Agreements
City staff are responsible for selling and overseeing the administration of 26 luxury suites at
The Aud. The Aud leases most suites for single or multi-year agreements and rents the
remaining suites on a per-event basis. goal is to maximize suite revenue while fulfilling
the expectations outlined in the suite agreements.
The current suite lease and rental agreements are not efficient because the Manager of The
Aud does not have the delegated authority to execute nor make even minor changes to the
terms and conditions (e.g., setting the amount of time a client must vacate the suite after a
special event, establishing the minimum number of tickets that must be purchased, etc.).
Providing staff with delegated authority to execute suite lease/rental agreements will allow
for expedited changes to be made to those agreements which will decrease service time and
improve customer satisfaction increasing the chances of repeat customers. All agreements
would continue to be subject to review by Legal, as appropriate.
2. Talent Purchase Agreements
From time to time, The Aud has opportunities to purchase live entertainment/shows directly
from an agency on its own or in cooperation with a third-party promoter. The process for
purchasing a show usually consists of two steps:
i. stalent
ii. signing a talent purchase agreement after the agent accepts the talent offer (the terms
of the talent purchase agreement align with the talent offer sheet).
Talent agencies consider the talent offer sheet to be a binding proposal. The talent offer
sheet outlines the basic financial deal points. The talent purchase agreement adds additional
terms and conditions, such as the technical/production rider.
Currently, staff do not have a clearly defined process for responding to these opportunities,
nor do they have the delegated authority to sign the talent offer sheet and/or talent purchase
agreements both of which are legally binding agreements. As a result, staff are unable to
act quickly to purchase these show opportunities when they arise. This inability to move
quickly to sign these talent offers and agreements has meant that in the past The Aud has
missed out on some show opportunities.
The delegated authority recommended would be exercised upon the approval set out below:
The Manager of The Aud would only execute the talent offer sheet and subsequently execute
the talent purchase agreement upon receipt of approval from one of the following persons
based on the risk value of the show (i.e. The artist guarantee):
ARTIST GUARANTEE APPROVAL
Less than $150K CDN Director of Sport
Greater than $150K CDN DCAO or CAO
The Aud Manager and Auditorium staff will complete a pro forma to assess the breakeven
point for ticket sales and ancillary revenue generation opportunities with each talent
purchase. Using the artist guarantee as the risk value is a worst-case scenario if zero tickets
are sold.
When The Aud decides to solely purchase talent or purchase talent as part of a co-promotion
with a third-party promoter, staff will performance history as a measure of
future success (i.e., targeting breakeven or better). The Manager would confirm the findings
of that research with the Director of Sport or DCAO/CAO when seeking their approvals.
3. Sponsorship Agreements
In 2016, Council approved the Municipal Sponsorship Policy (GOV-COR-2000) which
grants the CAO or DCAO the delegated authority to enter into agreements for amounts up to
$125,000 for the term of the agreement, subject to the satisfaction of the City Solicitor. City
Council approval is required for any agreement that is in excess of $125,000 for the term of
the agreement; in excess of 10 years in duration; includes the naming rights for an entire
complex; or does not satisfy the provisions of the Municipal Sponsorship Policy.
The operational challenge with the current delegation of authority is that the CAO and DCAO
are being tasked with signing off on sponsorship agreements worth lesser amounts (e.g.,
Sponsorship agreements worth $5,000) which can add additional time to the process of
securing a sponsorship agreement. This is happening because the Council-approved
sponsorship policy did not speak to agreements worth lower values.
The delegated authority recommended would be exercised upon the approval set out below:
APPROVAL AND EXECUTION VALUE OF SPONSORSHIP AGREEMENT
PERTAINING TO The Aud
Manager of The Aud Less than $50,000 for the term, less than 10
years in duration and not for naming rights
of an entire complex
Director of Sport Less than $125,000 for the term, less than
10 years in duration and not for naming
rights of an entire complex
City Council -Greater than $125,000 for the term, longer
COR-2000)
than 10 years, and naming an entire
complex
All Agreements to the satisfaction of the City
Solicitor
Updating this delegation of authority will allow for sponsorship agreements pertaining to The
Aud to be expedited, creating a better customer experience through efficient business
operations. All sponsorship agreements will continue to abide by the
Sponsorship Policy and will be subject to review by Legal, as appropriate.
STRATEGIC PLAN ALIGNMENT:
The recommendation
vision through the delivery of core service.
FINANCIAL IMPLICATIONS:
Approving these delegated authority recommendations will allow The Aud to achieve greater
operational efficiency and provide a clearer path to purchase more shows creating a business
environment to generate more revenue from ticket sales and ancillary revenues (e.g., Food &
beverage commission, paid parking, merchandise, sponsorships, etc.). Being an active
participant in the talent purchase community will also make Kitchener a more attractive market
for promoters and talent agents. If promoters and agents know that a venue is willing to take on
or share in the financial risk of a show, then they are more likely to come to Kitchener.
The financial risks of solely purchasing a show or buying cooperatively with a promoter include
event cancellation, low ticket sales, and negative publicity. The direct financial liability of
cancelling a show is outlined in the offer sheet and talent purchase agreement with the agent
(i.e., rtist guarantee).
COMMUNITY ENGAGEMENT:
INFORM
council / committee meeting.
APPROVED BY: MICHAEL MAY, DEPUTY CHIEF ADMINISTRATIVE OFFICER