A resolution approving a proposed Contract between the City and County of Denver and AXS Group, LLC to add compensation and five years to provide ticketing services, box office operation, information and call center functions, and marketing support for City venues. Approves a contract with AXS Group, LLC for $5,010,613 and for five years to provide ticketing services, box office operation, information and call center functions, and marketing support for City venues (THTRS-201952501). The last regularly scheduled Council meeting within the 30-day review period is on 12-23-19. The Committee approved filing this item at its meeting on 11-20-19.
Under pending, no items have been called out. Miss anything? All right, Madam Secretary, if you'll please put the first item on our screens. And, Councilman Herndon, will you please put Council Resolution 1220 on the floor? Yes, Mr. President. I move the council removing council resolution 19, dash 12 to be adopted. It has been moved and seconded. Questions and comments by members of Council. Councilman Hines. Thank you, Mr. President. I want to apologize to two members of the committee. We actually are. Excuse me. Members of the body. This actually came through committee, as you may know. There was an article in the Denver Post late last week. And and that that article has created a flurry of communication between constituents in District ten and the office. So these are questions that I would have preferred to have mentioned in committee. But I think that some people have some reasonable questions. And so I hope you'll allow me to ask that of either access or arts and venues if anyone is here from either of those entities. Good evening. My name is Brian Kitts. I'm director of marketing and business development with Arts and Venues. I thank you for coming. And again, I apologize that I didn't ask this in committee. So we've heard probably just that. Well, certainly the second most commented issue that we heard from constituents over the Thanksgiving holiday and the end today, but first being the lack of snow removal was about the access contract. And by the way, you were not even near the same league as all the concerns about snow removal. But I didn't realize that that the perspective venue or excuse me, a prospective vendor is currently under. What does they have? The House Energy and Commerce Committee has a probe into AEG. And I'm just curious to hear and also the European let's see what is the European group, the Competition and Markets Authority in the U.K. has also launched an investigation. And so I'd like to hear what your thoughts are, what your comments are about the investigations and how that may have affected the decision making process. I'll answer the second question first. The decision making process was not affected by by this quote unquote, probe. Our work with the purchasing department started several months ago. I had quite a back and forth with the reporter from the Denver Post today. I would I would not characterize what's happening right now as a probe. What has happened and I've actually got a copy of the letter from the congressional committee that is investigating what they've done is they have sent a letter to dozens of ticketing platforms around the country asking for information. It is not a criminal investigation in any way. They are looking at five specific areas of concern to ticket buyers in general in an effort to reintroduce the boss act. The Boss Act. This is where I get all ticketing and nerdy on you. The Boss Act is named after Bruce Springsteen. It's been kicking around since 2009. What it does, it stands for better oversight of secondaries, sales. It's exactly what it sounds like. It is intended to protect consumers from predatory ticket sales, especially on the secondary market. So, you know, this is not something that access is afraid of. This was not directed only at access. It was directed at, like I said, Ticketmaster, Eventbrite tickets. Now, almost everybody that's running a ticketing platform right now got one of these letters asking for information. It's not something that they were afraid of. We would welcome four of the five. We would welcome real work in the form of four of the five categories that are being looked into. So, you know, again, I, I want to be clear that what the congressional committee is doing is not look into criminal activity of any kind . It's asking for information to reintroduce the bias act. Okay. Thank you. So you mentioned secondhand sales. Does this the proposed contract, does it control secondhand sales in the chosen city venues? To the extent that we can. Yes. I think that what what you've seen with the advance of technology over the past several years is that we have now gone from, you know, literally selling tickets, card tickets across the street from Coors Field or standing outside of Red Rocks with a hard ticket to being able to transfer some of those electric lights, transfer almost all of those electronically. To the extent that we can, we are trying to control that secondary market. We want to do that. It is to the benefit of Red Rocks and the performing arts complex. And everybody who looks at those venues that we're able to do that as opposed to, you know, somebody randomly selling those tickets on Craigslist where we actually can't see who's buying or selling those those tickets. Thank you. So I recognize that that often the people who comment are directly affected. And and so I thank you for your comments because it's important for me to better understand, you know, all sides of the story. The secondhand market, I think, in the contract is 22 point something percent for the secondary market. And the city gets half and access gets half. Is that right? That's correct. Some of the some of the concerns that we had received, the emails, some even today, were that it was really difficult to purchase from the primary market. And an effective access to tickets in some of these venues are entirely through the secondary market. Do you have any thoughts or comments about that? Sure. I'm going to generalize and I'm going to use Red Rocks. But this applies to Pepsi Center or any sports or entertainment venue in the city where, you know, bluntly tickets are limited. I'm going to say that by the time a fan club gets its hands on tickets, by the time a team pre sells its tickets, by the time season tickets come off of the system, there are a limited number of tickets. We worked with Westword and Channel Nine a couple of years ago on a story, you know, talking about Red Rock specifically. By the time a show goes on sale where there are 9000 tickets available, even if every single ticket was available with a ticket limit of four per household, that's that's almost 1000 buyers that get those tickets. So, you know, this is a matter of supply and demand. It is it frankly doesn't have much to do with the primary or secondary market. It has to do with limited, limited availability in in any of those venues. There are plenty of shows at Red Rocks where, you know, bluntly the night of the show, you are going to be able to buy buy that ticket. And and, Mr. President, I've one other question, and I noticed there are other people with questions, so I'll yield after this. How do other promoters like Ticketmaster? How do they both have the sorry, the other ticketing agencies and promoters? How do they interact with access? So to to be a little more specific about the question. Well, artists be unable to participate in the markets that we are in some of our city venues because they have an exclusive arrangement with Ticketmaster or vice versa. No. I think one of the interesting things when we first partnered with Access is that and I think some of you have heard this in presentations, the city of Denver had a specific set of venues that was the only set of venues that wasn't under some sort of exclusive agreement. Pepsi Center is ticketed by Ticketmaster. Coors Field has its own. The Broncos are ticketed specifically by Ticketmaster. It doesn't matter who plays at Red Rocks, it's going to be on the access system. That's the way that that the industry is working right now. So there is no artist that is shut out. Okay. Thank you, Mr. President. Thank you, Councilman and Councilwoman Sawyer. Thank you, Mr. President. Can you just explain to me a little bit? This is a this is a we're just re-upping this contract, correct? Yes. So it was a five year initial contract that is expiring. And so this is a renewal of or a rework of the initial contract. So this rework of the initial contract then is anything changing materially about the way people in the city and county of Denver are purchasing tickets? When this contract starts in January versus the way they have done tickets or purchase tickets are experienced. Our venues for the last five years. Not because of the contracts. I think that you are experiencing different things as a fan, but it's based on technology and it would be the same whether you were with Ticketmaster or any other system. You know, 95% of our tickets are now sold electronically. So you show up at the venue with your phone. You may have borrowed it on your phone. The days of the hard ticket are gone. That's really the only change. This is really a fairly seamless process. There hasn't been an increase in fees. As a matter of fact, in a couple of cases, you're going to see lower fees with the renewed contract that's based on volume. You know that the industry is really reliant. The music industry is reliant on touring right now. And so that makes all of our venues incredibly healthy. So that's that's allowed us to, you know, basically work a volume discount on some of those fees. So in terms of the people of the city of Denver and the experience that they're getting at our venues and the basis of this contract, the. The article that was in the post the other day that sort of brought all of this up. It felt a little clickbait to me because it didn't really. It's sort of targeted access. But it wasn't really talking about access. Right. Is that is that accurate? Can you can you explain like is that is my experience with that, correct? Sure. You know, like I said in response to Councilman Hines question the the article, I wish the headline certainly matched what was in the article and what's in our contract a little bit better. You know, there are there are lots of good things that have come out of this contract. You can get a ticket from any of the platforms that had replied. But I think that what we have done with access is, you know, taking a deeper look at who's coming to our venue. So when we got ready to look at redeveloping the arts complex, we weren't sure. We had no demographic information at all. By by working with this system, we're able to see that, you know, three of the top ten markets that buy tickets at Red Rocks are from outside of the metro area. When it came to settling the lawsuit against Red Rocks in the city last year over accessibility and access to Row one at Red Rocks. It was actually written into the consent decree that the flash heat system which Access owns and operates, become part of the solution. It allowed for us to restrict who bought tickets and actually who transferred those tickets. And so that was something that was helpful for patrons who needed access to two row one. So, you know, I think that there are lots of things that technology has has been good for when it comes to the ticketing system. That continues with with with this contract. Okay. And so in your opinion, this is a good deal. This is a good value for the people of the city and county of Denver. Not only is it a good value, but it's one of the you know, it's one of the vital systems that we use in our venues. You know, we're talking about two contracts with arts and venues tonight. The other one is with Aramark. You know, both of these contracts are the workhorses that get the trains running on time at Red Rocks. One of them provides food and beverage service along with the the workforce that handles the concessions. You know, the access contract actually gets the tickets from the promoter into the hands of into the hands of the fans and, you know, staff. So every box office that we've got so, you know, these are it's not just a good deal. It's it's vital to what arts and venues does. You, Mr.. President. Thank you, Councilwoman. Councilman Flynn. Thank you, Mr. President. Brian, thank you also for being here. I think you addressed with Councilman Hines most of the the things I wanted to raise, but I was interviewed also by John at The Post about this. And I just wanted to point out to the audience and to my colleagues that, first of all, this is this was a competitive re procurement of this process. This isn't just an automatic renewal of access, a contract that it's had for the past five years. So we had, I think, six proposers, three of whom were shortlisted. Two actually were deemed viable by purchasers. And what's going what's going on in the House committee is basically a not a probe or investigation into, like you said, criminal activity. That's not the issue at all. What's actually going on is the House is looking at some common some practices that are common in the industry and not particular to the access. This would have been an issue no matter which proposer we chose to proceed. Correct. So I want to point that out to colleagues. This is not peculiar to access. That's right. And the last thing I wanted to bring up was that this contract in the last five years, if I recall correctly, has meant a huge improvement in accountability and transparency, particularly when it comes to our seat tax revenue. Right. Prior to this, we relied on the promoters. To basically tell us how many people were there. Right. And remit the 10% seed tax based on their word. Is that correct? That's correct. So, in fact, I was put in mind of one of the final scenes in the Blues Brothers when Jake and Elwood went backstage and they ran into the guy from Clarion Records who handed him a an envelope of cash. And that's kind of kind of how it used to be. Correct. They don't have suitcases. Full of cash because the revenue at Red Rocks is so big. But yes. They do. And so I guess what I want to emphasize is that with the digital platform and the records, the documentation that's kept on ticket sales, now we not only get for seat tax remission. Of what we were owed, the 10% surtax not just at Red Rocks, but Coliseum and the arts complex. And maybe in the future, the Lorenzo Heights Theater, if we're successful. But we also know such things as demographically, where do these customers come from so we can target market and things like that. So so overall, that's what this contract has meant to us. That's a huge part of it. And, you know, again, the technology here can't be overstated. You could have gone to, you know, before this contract, before the city opted in, you could have gone to a show at the convention center and they would have taken your cash and given you a red paper ticket. Mm hmm. By using an electronic system like this, we collect the money first. And I think this is important, though, too. We collect the money first through the access system, and then it is paid out to live nation and AEG or the symphony or whoever is is booking the venue that night. So not only do we get the arts and venues portion, including the seat tax, which is important, we are we're able to see where the money comes in and where it goes. We don't have to rely on an individual promoter and it's immediate. You know, part of the contract says that we have to pay out within ten days. You know, that's a huge improvement over the weeks and weeks. Thank you. And just to cap this, we we, in fact, as a city or as an agency, arts and venues might even be supportive of the House committee looking into some of these practices, because that could make it much better for some of our customers to be able to be engaged in the secondary market if they had to. Yeah, absolutely. You know, Red Rocks is known as being a leader in lots of areas. And I think this is one where I think we'd be proud to cooperate with the House committee in this type of work. And like I said before, this isn't something that we're afraid of. It's not something that I access is afraid of. It's a natural progression in terms of ticketing and protecting consumers. Thank you, Brian. Thank you, Mr. President. Thank you, gentlemen. Councilman Black. Thank you. I was not at the committee meeting, but I also got a lot of questions and I have a couple of constituents who have been unhappy with ticketing. For as long as I've been a councilperson. And so I'm going to follow up with you tomorrow for it with some very specific questions. But generally speaking, what would the difference be if you would have worded it to a different vendor? First question. And then related to that, would it be possible for the city to do this without a vendor? The answer to the second question is. Not without hiring lots and lots and lots of people. And at some point you're going to have to bring on the software system anyway. So my I guess my answer would be no, we we couldn't do it without a vendor. The difference, you know, frankly, between Ticketmaster and Access when it came to this procurement wasn't wasn't a lot and you know I think that part of it has to do with what I think the panel saw as flexibility and the ability to kind of pivot when you need new product or, you know, access was just a little bit more nimble based on our experience. So there's not some other model out there that wouldn't have all these fees. No. Okay. Thank you. Thank you, Councilwoman. Councilman Cashman. Thank you, Mr. President. A couple of quick questions. So I know there are a lot of performers now in an effort to beat, scalpers will use systems like lotteries. You send in your name, you get a number, and if you're picked, you get tickets. That's not available at Red Rocks, is that correct? You know. Pardon me, of places with the access system. The short answer is yes. It is a little bit more complex. Answer is that's kind of the way that the system works now where you go in and you are put into a random order. But access and this is not at our venues right now. AEG is doing this at the Mission Ballroom and some of its other venues. You can sign up as part of a preferred fan program that lets you have early access to those tickets and be in a lottery to actually get those tickets. So Access could do that at Red Rocks if the promoter wanted that. Okay. Thank you. Just a comment. The thing that drives me crazy is that the $75 ticket ends up being 97 or 102. And I'd love to see the advertising be the final price. And I believe a lot of the promoters and companies are working in that direction. And the last thing that I wanted to say, I was really interested to hear what you said, that out of town purchasing is is so large. With all the mistakes I have made in my life as a parent, I get the most forgiveness for the fact that I slept outside of King Bee Records, which is now Spanx Roadhouse on East Evans, and slept overnight and got my kids for two throw center seats for Michael Jackson's victory tour. And and while I'd be willing to do that still, it's not available anymore. It's a hell of a dad. Yeah, well, there you go. Thank you. Thank you, gentlemen. Kels, behind you. Back up. Yes, sir. Thank you, Mr. President. And think. Thank you. Councilwoman Black reminded me you had mentioned what would happen if we used a different vendor or another. I think that's an interesting point, because another concern that we had was the perception of monopolistic practices. But. That's a that's not really an issue with the city of Denver. That's more an issue, the potential issue with the industry like. So regardless of which which vendor arts and venues chose or the city of Denver chose, would kind of be in the same boat. Is that a fair statement? Yeah, that's fair. So and parts and venues of the city of Denver has. But what is what authority or power would we have to break up monopolistic practices? That's a big question. You know, I don't know that there's an easy answer to that. You know, this is an industry. You know the industry. I think when you start again, going back to, you know, the boss act, I think that what you see is that ticketing artist management, venue management, promoters. They are all so intertwined that, you know, these things are tough to unwind something. And again, I think this is important that I didn't say earlier, the boss act isn't looking just at. Ticketing companies. You know these are practices like Councilman Cashman said that that affect. That are affected by artists that are affected by promoters. So you know in this particular case, since we own and operate our own venues, you know, I think we're sort of free of some of that monopoly. We get to choose who we want based, you know, not based on, you know, who our parent company is. Okay. Thank you. And is this that you were talking about data of my visit or from the visitors that public record? It's something that an open records request could. Yeah, I think so. Um, I'm not sure, but it's cool stuff, so I want to share it. I'm assuming not at the individual level. No, that's. That is not horrible. Okay. Thank you. Thank you, Miss President. Thank you, Councilman. Councilman Ortega. Brian, I just have one question for you. For people who don't want to pay the fees or don't want to order online. Can you just tell the listening audience how they can still purchase a ticket? Sure. That's an important question, because the last time that this this contract came through city council, it was actually a request of council that we and access or whoever the contractor was, provide a little more face friendly service and a way to purchase tickets for no fees. And so as a result of that, you can go to any of the city box offices. And I want to be clear that those are our own venues. So if you want to go to Red Rocks and buy a ticket to a show at the Coliseum, you can do that. And if you're at the Coliseum, you can buy that ticket with no fees at all. If you are if you're paying with a credit card at the Coliseum, you're going to pay that, I think 3% credit card fee. But if you walk up with cash, which plenty of people do, you can buy those tickets for for no fees at all. And will you just clarify if Pavilion is one of those venues? Love it. Pavilion is not one of the city owned and operated venues, so. No. Okay. That was the one I had issues with related to that. Thank you. All right. Thank you, Councilwoman. See no other questions or comments on this issue. Madam Secretary, roll call. I. CdeBaca I Flynn I Gillmor I. Herndon Hines. High Cashman. Kenny Ortega Sandoval, I. Sawyer Torres. Hi, Mr. President. Right, Madam Secretary, please close voting and note the results. 39. 39 Council Resolution 1220 has been adopted. Madam Secretary, if you please put the next item on our screens and Councilman Herndon, if you'd please put Council Bill 1236 on the floor.