Recording Academy Says New York City Not Meeting All Grammys Hosting Costs
According to Recording Academy president Neil Portnow, it is costing $6 million to $8 million more to produce the Grammys in New York than in Los Angeles.
The return of the Grammys to New York City for the first time in 15 years has hit a sour note, with the Recording Academy complaining that the city hasn't met its commitment to shoulder the added costs of staging the awards ceremony.
New York City officials had lobbied hard to get the show back after many years in Los Angeles, including cajoling business groups and sponsors into subsidizing the lavish awards show.
Recording Academy president Neil Portnow said it is costing $6 million to $8 million more to produce the Grammys in New York than in Los Angeles and New York City hasn't done all it said it would to make up the shortfall.
New York City officials say they've raised the money they promised and expect a great show when the 60th anniversary Grammys ceremony takes over Madison Square Garden on Sunday.
"The city fully met all of its obligations to the academy," Julie Menin, the commissioner of the Mayor's Office of Media and Entertainment, said Wednesday.
Menin recruited business groups, unions and corporate sponsors to raise close to $5 million in contributions and labor concessions for the 2018 Grammys. No public dollars were spent, she said.
Kathryn Wylde, president of the Partnership for New York City, which was part of the campaign, said the mood was celebratory at the Grammy party she attended this week.
"From everything I understand, the city and the host committee have met all their commitments to the academy and the foundation and the program is going forward without any issues," she said.
The Recording Academy has already announced the ceremony is going back to Los Angeles next year for at least four years.
The Grammys used to switch between New York and Los Angeles every year or so, but that ended in 1998, when then New York City Mayor Rudy Giuliani got into a dispute with then-academy president Michael Greene.
"We could replace the Grammys in about a day," said Giuliani, boasting that the city didn't need the show or the influx of industry spending that supposedly boosted the local economy. "You say we're going to lose $40 million? We'll replace that with three other things in a day. I'm serious."
The Grammys spent the next four years in Los Angeles. It returned once to New York in 2003 after a new mayor took office, and then went back to L.A.'s Staples Center until now.
New York City Mayor Bill de Blasio heralded the show's return Monday when he joined Portnow at a ribbon-cutting for the academy's new East Coast offices.
"This is the biggest night in music returning to the musical capital of the world, and that feels really good," he said.
Portnow said Wednesday that neither the promised union concessions nor corporate sponsorships were as large as the academy expected.
For example, he said, while the city's host committee secured a $275,000 sponsorship from Adidas, that's "quite modest" compared to the seven-figure sponsorship deal the academy expected.
Still, Portnow said it made sense to hold this year's Grammys in New York for a variety of reasons.
"If you have an opportunity to be unpredictable, that's a really positive thing to do," he said.
Grammy boosters say New York should do all it can to attract the ceremony in the future because the host city reaps millions of dollars in economic benefits — plus bragging rights that can't be quantified.
Larry Miller, director of the music business program at New York University's Steinhardt School, said the New York-Los Angeles cost difference is due partly to the fact that hotel accommodations, transportation and labor all cost more in New York and partly to the fact that Staples Center, the ceremony's Los Angeles home, is a newer building than Madison Square Garden and is "purpose built for events like the Grammy Awards."
"I think the degree to which we could close the budget gap as a business community and make it a neutral cost decision for the Recording Academy and its broadcast partner, CBS, would allow for a more equitable scheduling to develop over the long term," Miller said. "I think it's a matter of civil pride to us in New York to be able to continue to attract the Grammy Awards and the global viewing audience to everything that is attractive, glamorous, exciting and aspirational about New York."
University of Chicago economist Allen Sanderson was more skeptical about efforts to attract high-profile events by major cities like New York. Economic impact estimates, he said, are often overblown.
"I generally think that if you take whatever number they put out and move the decimal point one over to the left, it's more accurate," he said.