JAS revenues, and expenses, on the rise
Aspen, CO Colorado
SNOWMASS VILLAGE ” Organizers of the Jazz Aspen Snowmass Festival have a lot of money to count these days ” and a lot of money to spend.
When festival producers decided in 2002 to recruit such A-list acts as singer-songwriter Bob Dylan, the cost of staging the four- to five-day event has run between $2 million and $3 million, says Jim Horowitz, the festival’s executive director.
“Ever since we started to upgrade the talent with Dylan,” says Horowitz, who founded the festival in 1991, “there was a calculated risk.”
And for this year’s June and September shows, the festival added a new component to its lineup ” two large LED screens, for the crowds to watch the performers, who have become increasingly difficult to see as attendance has grown.
“We were able to get the costs of these substantially underwritten by our patrons,” Horowitz said.
Those patrons, so to speak, aren’t the ones who throw down up to $60 for general admission. Instead, “patron” is JAS-jargon for VIP, the moneyed gentry who get such perks as tax deductions or even their own private tent ” complete with full food-and-beverage service for 20 guests at the festival ” depending on how much they give to the nonprofit. Those memberships range from $2,500 to $100,000, and they represent a growing segment of the festival’s revenue.
Horowitz says there’s a distinguishable difference between the meanings of “VIP” and “patrons.”
“We call them patrons, not VIPs, which went away a long time ago,” Horowitz says. “The meaning of the word ‘patron’ is ‘supporter,’ and has a different connotation to it than VIP. And there’s no question our patron revenue has been an important part of growth at the festival.
“Over the last few years (patron revenue) has grown by 20 percent, and that has really allowed us to reinvest in the quality of the product. There’s been a direct correlation with our ability to upgrade the quality of the festival with our growing patron support.”
The patrons, however, aren’t the biggest source of revenue for JAS. That distinction belongs to its sponsors. According to JAS literature, sponsorship costs range from $5,000 to $500,000. Horowitz would not say how much Illinois-based Calamos Investments has paid to be the title sponsor, but it’s clear it does not come cheap. In fact, Calamos’ title sponsorship deal is up for renewal within the next year, Horowitz said. Past sponsors have included Janus Funds of Denver.
“(The sponsors) are the biggest single contributor, but if you want to talk about the backbone of our revenue, it’s sort of like looking at a tripod. The tripod is the most stable geometric form because it has three legs. And in our world you can’t really take any of those pieces away. I wouldn’t say the title sponsor is more important than the patrons. It’s one of our biggest contributors, but we couldn’t pull off the production without any of these.”
The final part of this so-called tripod of revenue, no doubt, is the crowds that pay general admission fees.
And the Saturday, Sept. 1, rush of 12,000 some concertgoers who went to see the Allman Brothers Band was the festival’s record for a one-day gathering. Indeed, the lines for portable toilets and adult beverage lasted more than an hour for many. One of the Miller Genuine Draft tents near the stage had run dry of beverages when the Southern rock legends still had three tunes remaining on their agenda.
Horowitz admits that it could have gone more smoothly. And he’s eyeing other ways to get more out of the venue, on the Snowmass rodeo grounds, which has a finite amount of space. Even having workers deliver beer, such as they do at sporting events, is a possible option, Horowitz says.
“When you have as big as a crowd as we did for the Allmans, it shows where we have challenges and opportunities,” he says. “The one thing we’re looking at is how to create additional toilet capacity and free up some space on the field at the same time. We’re looking more at efficiency, per se, than expansion.
“We’re looking at things, for example, with our food-and-beverage service. We had some food lines that were longer than usual with crowds, and when they reach that level, we’re looking at how can they get food to people as opposed to getting people to food. We don’t have a labor base that’s experienced with going around with beer on a tray, but it’s something we may consider.”
Crowds like the 12,000 the Allmans packed in, or the 11,000 surfer-pop singer Jack Johnson drew at a Labor Day Festival show in 2004, were chiefly the result of pent-up demand, Horowitz notes. The performances by both acts came when it was their only Colorado appearance of the year, meaning fans from the Denver area were willing to take the three-and-one-half-hour road trip, which they normally wouldn’t take.
In its promotional material, JAS notes that 65 percent of its audience members have a household income above $85,000, while 55 percent have a graduate degree or are in a graduate program.
JAS’ Form 990 tax form for the year Oct. 1, 2004, to Sept. 30, 2005, provides a snapshot of how much the organization gives and receives. That year the festival spent more than it made, with total expenses of $5.4 million compared to total revenue of $5.2 million. Along with a payroll of nearly $500,000 ” of which Horowitz earned $190,000 ” the organization also saw expenses such as $190,000 on event security, $29,705 on telephone bills, and $65,059 on catering, among other expenses.
There’s also the cost of paying the performers.
For example, Neil Young, who played at the Labor Day Festival in 2003, commanded $150,000, and booking agencies such as William Morris Agency and MVO Ltd. brought in $242,500 and $150,000, respectively.
While new restaurants enter the Aspen scene, there are several spaces that will remain empty this winter. Meanwhile, the retail market remains extremely hot.