Kanye West performs at Outside Lands 2014
A couple of weeks ago, a reader sent us the latest “Boxscore” from Billboard magazine which lists concerts, their attendance, and gross ticket sales. At the top of the list for that week was the 2014 Outside Lands Music and Arts Festival with $19,063,003 in gross sales and overall attendance of 202,963.
This was the seventh year for Outside Lands, which takes over several venues in Golden Gate Park for 3 days and nights in August every summer. Top headliners this year included Kanye West, Tom Petty and the Heartbreakers, The Killers, Macklemore & Ryan Lewis, Arctic Monkeys, Tiesto, Death Cab for Cutie, and the Flaming Lips.
Many of our blog readers have wondered how much of the event’s revenues actually go to the San Francisco Recreation & Parks Department, who is responsible for Golden Gate Park and is arguably the festival’s biggest advocate at City Hall. Rec & Park has always claimed that the revenue the department receives from the event is substantial and “brings vital economic boost to our parks and the City as a whole” according to Phil Ginsburg, Rec & Park’s General Manager.
We reached out to Connie Chan, the Deputy Director of Public Affairs for Rec & Park to get more insight into the revenues around Outside Lands. How much does Rec & Park actually earn, and how much does it cost the department to support the event?
“For 2014, the Department received $2,417,724 of revenue from Outside Lands,” Chan told us.
Chan also provided a breakdown of the revenue, which consists of a percentage of the event’s gross revenue, a per ticket revenue fee and dollars associated with maintenance costs for the event:
REC & PARK OUTSIDE LANDS – REVENUE DETAIL
11% gross revenue
$1.25 per ticket sold
Gardener Endowment Fee
Polo Field Regeneration Fee
And if you’re wondering where the permit fees are for the four main venues in the park that the festival uses – the Polo Fields, Lindley Meadow, Marx Meadow and Hellman Hollow – it’s part of the first line item. The permit fees are covered by either 11% of the event’s gross revenue or $1.2 million, whichever is greater.
We also found out how much Rec & Park spends to support the festival such as staff and other costs associated with the park and hosting the 200,000+ person event. Chan sent us back this detail:
REC & PARK OUTSIDE LANDS – COSTS
Polo Fields Turf Crew
That $88k in expenses was then paid back to Rec & Park by the promoters after the event.
All told, Rec & Park received the $2.41 million in revenue plus reimbursement of the $88k in expenses related to the event.
So how critical is the Outside Lands revenue to the Rec & Parks Department budget? We found a Fiscal Years 2014-15 and 2015-16 budget presentation online which puts the department’s overall budget at $160.9 million for 2013-2014, with $137.7 million for operating budget (86%) and $23.32 million for capital budget (14%).
For 2013-2014, the department budgeted $59 million in earned revenue, which includes $6.5 million for “Permits & Facility Rentals”. Presuming the Outside Lands revenue falls into this category, it represents 37% of the expected revenue from rentals.
The crowd at Outside Lands 2014. Photo by Josh Withers
NEIGHBORHOOD IMPACT VS. ECONOMIC IMPACT
The Richmond District neighborhood, in particular some commenters on this blog, has mixed feelings about the concert and its effect on the neighborhood.
The festival drew just over 200,000 attendees to Golden Gate Park in 2014. Every year, the festival puts a strain on public transportation, and on residents who live near the western end of the park. They routinely deal with highly amplified sound from the multiple festival stages, blocked driveways and the effects of thousands of concertgoers coming and going from the park for 3 days and nights: public urination, litter, noise, and clogged streets.
Still, other residents welcome the festival and the energy that a top-tier music festival brings to the neighborhood, and many merchants eagerly await the influx of hungry and thirsty concertgoers who spend time in the neighborhood during the festival.
Neighborhood schools like Presidio Middle, Lafayette, Argonne and George Washington High also benefit financially by opening their lots during the festival and charging as much as $30 per day per car for parking. The proceeds, which can be as high as $10,000 for a single school for the weekend, go towards school programs.
The school lot fundraisers became so lucrative that in 2011, the city tax collector came calling to get their share. But legislation eventually passed that allowed school PTA’s to continue their “parking lot fundraisers” without having to give a share to the city.
The city of San Francisco and the concert’s promoter, Another Planet Entertainment, have always touted the positive economic impact of the festival on San Francisco.
A 2011 SFSU study, based on an online survey of 3,551 attendees of the festival, determined that “the total direct expenditures from the OSL Festival in San Francisco were estimated to be $27,072,270. Spending in the Bay Area outside of SF was $2,961,340. This resulted in total direct expenditures in the entire Bay Area of $30,033,610.”
Spending was primarily on food, lodging and transportation, and the data excluded the expenditures of the 27% of respondents who lived in San Francisco, making a point to try and quantify the economic impact of concertgoers coming to the festival from outside the city.
But the number most often quoted from this study is closer to $60 million, as Phil Ginsburg said in 2012 after the festival’s contract was renewed for another 8 years.
“The event has drawn over a half million visitors to Golden Gate Park and contributes an estimate of $60 million annually to the City’s economy,” Ginsburg said.
That $60 million impact is a best guess, as researchers from the study used a multiplier to theorize on the total economic impacts:
“The total economic impacts of direct expenditures from a festival can be measured in terms of increased regional sales, personal income and jobs. Sales impact is sum of direct expenditures, plus indirect and induced spending in the region. Sales are calculated by applying a multiplier to direct expenditures,” the research summary states.
Patrick Tierney, chair of the Recreation, Parks and Tourism Department and lead on the economic study, noted that city residents might be quick to notice the “inconvenience factor” of the festival, including increased traffic, noise and transit needs. “The economic benefits, although large, are not immediately evident,” he wrote.
“It’s good to see now how the whole community benefits,” said Tierney. “People spent money all over the Bay Area, although San Francisco clearly got the biggest benefit.” [SF State News]
A SHIFT IN VALUES
While few would begrudge Rec & Park their chance at revenue, many residents and park users have been dismayed at the shift that the department has taken with respect to venue rentals and permit fees.
In recent years, large concerts like Outside Lands and Hardly Strictly Bluegrass (funded by an endowment by the late Warren Hellman) are applauded and welcomed, while smaller events have gotten the squeeze from rising permit fees.
The increase in fees is a key strategy of Rec & Park’s continued revenue growth. In their budget presentation for 2013-2014, they call for “Increased permits for facilities, fields and special events – $750,000″.
And while this strategy may be helping Rec & Park’s bottom line, others believe it has marred the integrity of the department and is chipping away at San Francisco’s spirit, leaving a sour taste in the mouths of many residents and event organizers that use the park.
Due to the rise in Rec & Park’s permit fees, some long running events have had to close down or change venues.
The first major event to suffer the consequences was Jimmy’s Old Car Picnic, a vintage car show that began in 1988 as a gathering of a handful of vintage car owners.
It became an annual event, organized by former Rec & Park gardener and car lover Jimmy O’Keefe that drew hundreds of vintage cars to Speedway Meadow. People came from all over the Bay Area to check out the cars, picnic with friends, and help raise money for disabled children.
The picnic was such a cherished tradition that the Board of Supervisors presented Jimmy’s Old Car Picnic with a Certificate of Honor in 2006 in celebration of their 18th year.
But its feelgood status and charitable donations weren’t enough to keep Jimmy’s picnic off the Rec & Park chopping block. In 2009 and each year thereafter, their fees increased. Finally, after a protracted battle with Rec & Park that took the wind out of this sails, O’Keefe declared that 2013 would be the last year for the picnic. Their fees had gone from $1,650 in 2008 to just over $17,000 in 2013.
“We’re losing the identity of San Francisco,” Jimmy said when we talked to him about the picnic’s demise. “It was one of the few blue collar, working class family events left in San Francisco.”
Recently, another tradition in the park came to an end when Debardchery, a Medieval Archery & Bardic event announced they would no longer be using the archery range in Golden Gate Park for their event.
After 30 years, organizers had decided to move the venue to an archery range in Pacifica because of an increase in permit fees and unexpected restrictions that had never been imposed previously, like requiring a food handler’s certificate for their potluck picnic.
Debardchery organizer Lucien Canton says there are no hard feelings, just disappointment at having to leave the Golden Gate Park Archery Range after 30 years.
“We’re not looking to pick a fight with Rec & Park. It’s just unfortunate that they seem to have a “one-size-fits-all” mentality and don’t seem to make any concessions to small, local groups,” Canton said.
Ironically, the archery facility in Pacifica that they moved their event to is managed by San Francisco Rec & Park, but the fees for their event were only $200. Apparently holding your event within city limits does come at a premium.
OUTSIDE LANDS APPROVED THROUGH 2020
In 2012, the San Francisco Board of Supervisors unanimously approved to extend San Francisco Recreation and Park Department’s contract with Another Planet Entertainment, the promoters of the Outside Lands Music Festival. The new contract included eight additional years of festival production and increased capacity of the event to 75,000 attendants.
At that time, Rec & Park disclosed that under the new contract condition, Another Planet Entertainment would pay an increased rent of approximately $2.25 million dollars in 2013 and each year thereafter during the extension. The contract also funded a new year-round gardener in Golden Gate Park and $15,000 to support turf regeneration, both of which can be seen above in this year’s revenue detail.
For better or for worse, the city can expect an annual influx of 200,000+ concertgoers every August until at least 2020, along with annual revenues of an estimated $2.25 million to Rec & Park.
How other, smaller Golden Gate Park events will fare in the coming years remains to be seen.
4:10 am | Posted under Events
, Golden Gate Park
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