SMG, the West Conshohocken company that runs the Pennsylvania Convention Center, is merging with the facilities-management division of Los Angeles-based AEG, a sports and live entertainment manager.
As part of the deal, SMG, which manages 240 U.S. and European show facilities, will become a division of the combined entity to be called ASM Global that will run more than 300 stadiums, indoor arenas, convention centers, and music halls around the world.
The new company will be based in Los Angeles, with the SMG division still based in West Conshohocken, SMG owner Onex Corp. said. Onex bought SMG from another buyout investment firm, Northlane Capital Partners, just 15 months ago. The new, bigger owner hopes to bring more events to the Convention Center.
SMG has managed the center since 2013, when its politically appointed board voted to replace the convention center’s top operations staff by outsourcing management to SMG. The board’s hope was that the privately run company would improve labor costs in negotiations with Philadelphia trade unions, and attract more shows to the sprawling facility that runs along Arch Street for three blocks east of North Broad.
“We were assured we’ll have our same core team in place and intact,” center authority president John McNichol said Thursday. That team is headed by Kelvin Moore, who took over at the Convention Center last year, replacing Lorenz Hassenstein, who left to head the convention center authority in Toronto.
Also in 2018, the center renewed SMG’s contract for five more years. McNichol said convention and hotel trade prospered under SMG.
“We had 16 citywide shows last year and we expect 21 this year,” up from fewer than 10 large shows in the early 2010s, he said. A citywide show peaks with at least 2,000 hotel rooms full of convention-goers. McNichol said SMG’s efficient management helped attract such big shows as December’s HiJinx two-day indoor music festival, produced by LiveNation, which attracted 18,000 guests in the days after Christmas. Convention shows have driven city hotel occupancy to “record levels over the past three years,” McNichol added.
McNichol said he expected that labor-management relations would not be affected by last week’s indictment of John Dougherty, Electrical Workers’ business manager and Philadelphia building trade union association chief, who had been active in negotiations to restructure past labor arrangements at the center.
"The labor leadership we have in our buildings is consistent, because, with the [busy] show calendar, these have become full-time jobs,” McNichol concluded.
AEG and Onex will each own half of ASM. SMG boss Wes Westley called the merger “a major step for our industry." He said it will open “new opportunities” for company staff.
Westley gets a seat on the new company’s board; he will step back from day-to-day management. Westley made SMG the “gold standard” in the industry over his 25 years at the company, Onex managing director Amir Motamedi said in a statement, adding that Newman will build “a larger, more diverse company.”
The two firms’ combined resources will enrich their owners and update services for clients, said Bob Newman, the former SMG regional vice president who is now president at AEG Facilities. Newman will also head ASM as president and chief executive officer.
SMG was founded in 1977 as Spectacor Management Group by then-Flyers owner Ed Snider when his facilities group was picked to run the Superdome in Los Angeles; its competitors include a later Snider-founded company, Comcast Spectacor.