Posted by N. David Milder

Introduction

Part 1 of this article focused on describing Bryant Park as a model informal downtown entertainment venue through its performance of three key functions:

• Providing visitors with a pleasant, green refuge from a downtown’s hustle and bustle
• Offering opportunities for visitors to actively engage in fun activities, with their resulting performances entertaining nearby people watchers
• Holding entertaining events for park visitors that are performed al fresco, often on multi-tasked locations within the park, using temporary infrastructure, e.g., stages, movie screens, ice rinks, seating, etc.

Part 1 also demonstrated that Bryant Park is a very strong entertainment attraction for the Midtown Manhattan CBD. In terms of annual attendance, it either closely rivals or surpasses such world-class formal entertainment venues as the Lincoln Center for the Performing Arts (LCPA), the Metropolitan Museum of Art (Met), the Museum of Modern Art (MoMA), Madison Square Garden (MSG), Yankee Stadium and Citi Field. Bryant Park’s magnetism demonstrates the powerful contribution an informal downtown entertainment venue can provide for a district’s entertainment niche as well as its economic well-being.

Part 1 can be found at: http://lnkd.in/d-KKyw6

Part 2 focused on:

• Bryant Park’s comparative strength as a tourist attraction in NYC
• Its user frictions compared to other major NYC entertainment venues
• The cost of its rebirth in 1992 compared to how much it cost to create 18 other significant entertainment venues or to do a major renovation of them.

Part 2 can be found at: http://tinyurl.com/mkkqo37

Here in Part 3, the discussion will continue the comparison of Bryant Park to other entertainment venues by comparing the total annual expenditures of the corporation that operates Bryant Park to those of the organizations that operate 20 other formal and informal entertainment venues located across the nation.

The upcoming Part 4 will focus on three informal entertainment venues in small and medium sized communities. A discussion of entertainment venue economic impacts will follow in Part 5.

Comparing the Annual Expenditures of Formal and Informal Downtown Entertainment Venues. 

Why Entertainment Venue Expenditures Are Important. Downtown leaders working to create or expand an entertainment niche probably will want to look at how much money the various types of new entertainment venues will likely need to take in annually, since it is a good indicator of the amount of money that will have to be raised annually through: earned income, grants from governments, foundations and businesses and individual gifts and donations. This will likely impact on their financial feasibility.

The Hypothesis. Based on many years of field observations, DANTH, Inc. developed the hypothesis that the organizations that run formal entertainment venues (e.g., PACs, theaters, arenas, stadiums, etc.) usually have higher annual expenditures than those that are responsible for informal entertainment venues (e.g., Bryant Park, other public spaces and third places). If true, this finding probably should be an important consideration for any downtown that is formulating a strategic plan to create or expand an entertainment niche — especially in locations where financial resources are likely to be scarcer (e.g., in small and medium sized communities or in cities lacking a significant affluent population). The data in Figure 14, though they admittedly represent a very small sample, are presented because I believe they nevertheless shed some light on the viability of this hypothesis.

About the Data. The data in Figure 14 are related to the annual expenditures of the organizations that run 13 formal and 8 informal entertainment venues in towns and cities, large and small, though the largest number,7, are located in NYC. The selection of venues was mainly based on the reasonable availability of the data; statistics about other venues might have been obtainable with a lot more time and effort that I unfortunately could not afford to invest. I have personally visited 19 of the 21 entertainment venues presented in Figure 14.

The data in Figure 14 were mainly collected from the website postings, annual reports, IRS 990 filings or economic impacts studies posted by the venues listed. They are mostly for a recent year in the 2011-2014 period, but a venue’s expenditure and attendance data points were not always for the same year. Data for Discovery Green came from the PPS website. The data for the three smaller informal entertainment venues are based mostly on site visits and interviews with local officials. The Mitchell Park data are DANTH estimates, since the Village does not break out expenditures for the park in its financial reporting. The expenditure number is taken from a recent village financial report and is the total amount spent on recreation by the entire village for that year. Given that the Village also has a campground and four other parks and playgrounds, it is plainly an overestimate of Mitchell Park’s expenditures. However, that helps make the conclusions of the ensuing analysis conservative. The Mitchell Park attendance data were given to me by the then mayor in 2006. Recently, the Village official in charge told me that the park’s carrousel has about 100,000 users per year. Our counts of carrousel and non-carrousel users on day visits in the summers of 2006 and 2014 were then used to recalibrate the attendance number. That recalibration produced a number that was pretty close to the 2006 number. Consequently, we decided to stick with it. The attendance estimates for Division Street Plaza in Somerville, NJ, and Central Park Plaza in Valparaiso, IN, are only for events, which are their strongest draws, but they consequently under report, to some unknown degree, total attendance. Local officials in both Somerville and Valparaiso provided a wide range of information, much of it in emails and personal and telephone interviews. The Millennium Park expenditures data combine information provided by the city about its expenditures with a DANTH extrapolation from a prior foundation report that discussed the private sector’s annual expenditures.

Many of the organizations that run these entertainment venues, such as the Bryant Park Corporation, are dedicated solely to the management and stewardship of their particular entertainment venue. Others have missions that cover other entities and functions. Lincoln Center for the Performing Arts, for example, is not only a cluster of performance venues, but also contains two professional schools, operates arts education programs that cover the city and now has its own informal entertainment areas. Similarly, Division Street Plaza is managed under just one the Downtown Somerville Alliance’s many programs. A few are operated by two organizations. For example, Central Park Plaza is part of the Valparaiso Department of Parks and Recreation which takes care of the park’s physical needs and leases it for weddings, parties and business meetings, etc. However, the main drivers of this park’s attendance are the 80 days on which events are held, and they are managed by a nonprofit, Valparaiso Events. In these instances, information is presented in two ways: first the expenditures for the entire “parent” organization(s) and then with the organization’s expenditures just for that entertainment venue.

Two of the primary objectives fueling downtown efforts to create or improve an entertainment niche are to bring more people downtown and to encourage visitors to stay longer. Consequently, the third column in Figure 14 presents the annual attendance for each of the 21 venues, and the fourth column provides a computation of the managing organization’s annual expenditure per visitor

The lack of uniformity in data collection means that there probably are error factors. I am nevertheless presenting these data because:

• The main differences I am trying to establish are those between informal and formal entertainment venues
• The statistical differences between them are so large – 100s of percent, not 10s of percent — that I believe they can easily absorb the range of the probable errors.

Bryant Park. Our model informal downtown entertainment venue, Bryant Park, has annual expenditures of $11.20 million. That is far, far smaller than the expenditures of some of NYC’s other major formal entertainment venues:

• MSG’s $309.57 million, is about 27 times larger than Bryant Park’s
• Met Museum’s $252 million, is about 22 times larger than Bryant Park’s
• MoMA’s $164.4, is about 14 times larger than Bryant Park’s
• LCPA’s $774.9 million, is about 69 times larger than Bryant Park’s
• LCPA’s $399.95 million expenditures, just on performance and production costs, but still 35 times larger than Bryant Park’s
• Brooklyn Academy of Music’s $40.99 million, about 3.66 times larger than Bryant Park’s.

It is noteworthy that, despite the huge differences in their costs to renovate/create (see Part 2), Bryant Park’s expenditures seem to be in the same range as downtown Chicago’s Millennium Park’s $12.80 million. Manhattan’s Central Park has much higher annual expenditures, about $58.3 million, but that is to be expected since it is about 80 times larger in acreage than Bryant Park.

Bryant Park’s annual expenditure per visitor is just $1.87. Again, it is a fraction of the expenditures per visitor of four of NYC’s major formal entertainment venues:

• MSG’s $77.39, about 41 times larger than Bryant Park
• Met Museum’s $40.22, about 21 times larger than Bryant Park
• MoMA’s $53.38, about 28 times larger than Bryant Park
• LCPA’s $154.98, about 83 times larger than Bryant Park
• LCPA’s $115.93 just on performance and production expenditures, but still 62 times larger than Bryant Park
• Brooklyn Academy of Music’s $74.53, about 39 times larger than Bryant Park

The six formal entertainment venues located in smaller communities –their populations range from 566 to 25,340 — unsurprisingly have annual expenditures considerably lower than Bryant Park’s, averaging $3..51 million. However, their annual expenditures per visitor are vastly higher, ranging from $26.00 to $80.45 with an average of $42.83.

These findings for Bryant Park are consistent with the hypotheses that informal entertainment venues require organizations that tend to have significantly lower annual expenditures, but with one qualification: the analysis needs to control for the size of the community in which they are located. However, the Bryant Park findings also suggest that the analysis does not need such a qualification when comparing expenditures per visitor – Bryant Park’s is lower than any of 13 formal venues regardless of the size of the community in which they are located.

Comparing the Informal Venues and Formal Venues Presented in Figure 14. The direction of the above findings about Bryant Park compared to four major NYC formal entertainment venues holds when the annual expenditures and expenditures per visitor of the 8 informal venues presented in Figure 14 are compared to those of the 13 formal venues:

• The formal entertainment venues’ average annual expenditures are $121.4 million, 10.3 times larger than the $11.7 million of the informal venues
• The formal entertainment venues’ average annual expenditures per visitor are $64.11, 32 times larger than the $2.00 of the informal venues. In terms of attracting visitors, the informal entertainment venues appear to get a significantly greater bang for their bucks than their formal counterparts.

Taking the Size of the Community Into Account. The formal and informal venues presented in Figure 14 are also divided into Larger Communities and Smaller Communities categories. There are nine venues located in smaller communities:

• The formal entertainment venues located in Farmington, CT; Shelburne, Rutland and Weston, VT; Morristown and South Orange, NJ. They include both rural and suburban communities. Their populations range from 566 to 25,340, averaging 14,007
• The informal venues are located in: Greenport, NY; Somerville, NJ and Valparaiso, IN. Their populations range from 2,200 to 32,014, averaging 15,458.

The venues from larger communities are located in NYC, Chicago, Cleveland, Houston and Paris, France.

Because the number of venues in these four groups are small, ranging from three to seven, the findings presented below should be treated with caution. Though not definitive, I believe the findings are still worthy of consideration:

• As expected, the entertainment venues located in larger communities, be they formal or informal, have significantly larger annual expenditures than their brethren in small communities. The formal venues in larger communities average annual expenditures of $206.1 million, 58.6 times larger than the $3.51 million average for the smaller communities. Among the informal venues, those in larger communities average $18.50 million, 38.5 times higher than the $480,000 average in the smaller communities.
• However, this pattern is weaker when we look at expenditures per visitor. Among the formal venues, those in the larger communities average $82.35 per visitor, only about 1.9 times larger than the $42.83 in the smaller communities. Significantly, among the informal venues, the size of the community seems to have little impact: the average for the large communities is $2.02 and that for the smaller communities is $1.99, a meager $0.03 difference. The expenditures per visitor for all seven informal venues range from $0.63 to $3.54, considerably lower than the ranges for the formal venues, e.g., $26.00 to $80.45 in the smaller communities. Regarding visitation, it appears that regardless of whether they are located in smaller or larger communities, informal entertainment venues get a much bigger bang for their bucks than do the formal venues.

Take Aways

Over the years, I have learned that some solid lessons can still be learned from studies that have relatively few cases to analyze, with prudence and care governing the scope and wording of the conclusions.

Based on attendance, Bryant Park is one of NYC’s major entertainment venues. There are perhaps 10 or 15 venues in the city that are in the same league and they constitute the relevant analytical population. The above analysis has data on seven of these venues. Consequently, it can be argued that our sample is far from small. However, this means that our conclusions must be framed within the context of NYC’s major entertainment venues and not the nation or universe.

Within that constraint, I believe the findings of the above analysis can be taken with a good deal of confidence. They are:

• Bryant Park’s annual expenditures are significantly lower than NYC’s major formal entertainment venues, not by just a few percentage points, but by several hundreds of percent
• With regard to attendance, Bryant Park gets a much greater impact for its expenditures than NYC’s major formal entertainment venues. Its annual expenditures per visitor are $1.87 compared to the $40.22 to $115.93 of the five major formal venues in the study.

Bryant Park is our model informal entertainment venue and it was compared to five of NYC’s major formal entertainments. Consequently, the analysis above also tried to gain some indications about whether informal and formal venues across the nation differ similarly on these important variables. Here is where the analysis’s small sample problem is located: 21 entertainment venues were analyzed, while there are probably tens of thousands of them spread across the nation.

Given this situation, our conclusions can gain some firm footing by referencing “some” rather than “all.” For example, the more general analysis did find that, among those analyzed, informal and formal entertainment venues across the nation differed on their annual expenditures and expenditures per visitor variables as they did in NYC — with the qualification that, on expenditures, the size of the community needs to be controlled. While certainly having some evidential value, the sample is too small to warrant generalizing these findings to all entertainment venues in the USA. However, the following can be said with a good deal of confidence: the analysis shows that

• In communities of similar size, some informal venues have annual expenditures significantly lower than some major formal entertainment venues
• In communities regardless of size, some informal venues have a much greater impact for its expenditures than some formal entertainment venues.

Even restated, these findings can be important considerations for downtown leaders who are trying to either create or expand an entertainment niche. They might, for example, deduce from these findings that well-crafted informal entertainment venues can require far less money having to be raised each year, while attracting far more visitors for each dollar spent. That thinking might not result in a strategic preference for building and operating an informal venue, but it probably will win it careful consideration. In communities with modest financial resources, our restated findings will probably be of even greater relevance.

I would also argue that the analysis of the data does provide some indications that our findings, with additional research, may well be found to apply to all informal and formal entertainment venues. They do have a kind logic ( e.g., the need to control for community size on expenditures) and consistency  (e.g. the relationships hold whether you look at larger communities or the smaller ones and the range of expenditures per visitor for the eight informal venues are just a few dollars apart). In my experience, this augurs well for them being strongly confirmed in a larger study.

© Unauthorized use is prohibited. Excerpts may be used, but only if expressed permission has been obtained from DANTH, Inc.

Tweet