SMG Seeks To Block AEG's Convention Center Bid

LOS ANGELES (CelebrityAccess MediaWire) — Venue management company SMG has raised a formal objection with Los Angeles over the city's plan to retain AEG to manage the Los Angeles Convention Center, claiming that AEG lacked the required experience.

According to the Los Angeles Times, SMG sent a protest letter to the city, stating that AEG did not meet the cty's search specifications, which stipulated that eligible firms would have five years of "managing and operating convention or exhibition facilities in similar markets."

"AEG does not manage or operate any 'similar facility' in any 'similar market,' " SMG Senior Vice President Gregg Caren wrote in the letter to Los Angeles officials. "Indeed, AEG does not operate a single convention or exhibition facility in the United States, and operations in … Qatar can hardly be considered experience in a similar market."

SMG operates 70 convention centers across the U.S., including facilities in markets such as Chicago, Houston, Denver and Atlantic City.

SMG also noted that AEG appears to have a disqualifying conflict of interest due to the two hotels at the nearby AEG-managed L.A. Live. Los Angeles bars city employees from making decisions that have a bearing on their personal finances.

AEG's bid to run the convention center has been marked by controversy. Prior to the objections raised by SMG, AEG was disqualified from the bidding process after submitting insufficient financial information, including corporate tax returns and three years worth of balance sheets, income statements, cash flow records and statements on changes in stockholder equity. AEG maintained that as a private company, the release of that financial information might have an impact on AEG's business around the world.

Ultimately, AEG was allowed to resubmit a new bid after their initial disqualification. AEG and SMG were the only two companies to submit bids to operate the convention center. – CelebrityAccess Staff Writers