correspondence between mgm springfield and eastern states exposition

8/12/2019 Correspondence between MGM Springfield and Eastern States Exposition

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COMMONWEALTH OF MAS SACHUSETTSMASSACHUSETTS GAMING COMMISSION

In the Matter of:BLUE TARP REDEVELOPMENT, LLC

RESPONSE OF EASTERN STATES EXPOSITIONTO BLUE TARP REDEVELOPMENT'S OPPOSITION TO PETITION FORDESIGNATION OF EASTERN STATES EXPOSITION AS AN IMPACTED LI\rEENTERTAINMENT VENUEEastern States Exposition ("ESE") hereby responds to the Opposition (the "Opposition")

of Blue Tarp reDevelopment ("MGM") to ESE's Petition for Designation as an Impacted LiveEntertainment Venue ("ILEV") as follows:

BackgroundESE is a Massachusetts not-for-profit corporation located approximately 2 miles from

downtown Springfield where MGM proposes to develop and operate an $800 million gamingestablishment. Since its founding aimost a century ago, ESE has served as a critical economicdriver for westem Massachusetts by attractingwell over 2.5 million people per year to thevarious year-round events hosted there, and by generating an estimated economic impact for theregion of close to a half billion dollars per year.t

Live entertainment is an integral element of ESE's ability to attract large audiences andits long history of success. ESE owns and operates certain live performance venues known asthe Xfinity Arena, an approximately 6,500 seat outdoor arena, and the Coliseum, anapproximately 6,000 seat indoor arena (together, the "Venues"), both designed in whole or in1 See report entitled The Economic Impact of the Eastern States Exposition dated September 1.0,2013 preparedby Regional Economic Models,Inc.1688768.2


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part for the presentation of live concerts, comedy or theatrical performances. Almost all of theforegoing facts are acknowledged by MGM in its Opposition.

According to the lead article appearing in the January 24,2014 edition of The Republicanfollowing MGM's January 23,2014 presentation to the Commission concerning the details of its$800 million casino proposal (the "MGM Presentatiof'),*McM will underwrite, co-promoteand book at leastfour shows eqch at the MassMutual Center, Symphony Hall and CityStage eachyearfollowing the opening of the cesino." Located within such close proximity and offering thesame types of entertainment in similarly sized venues, MGM's arrangement with variousSpringfield venues is certain to have a devastatingly negative impact on the Venues and ESE.There is no doubt that such MGM underwritten and promoted events will not only over timeattract enonous numbers of people that might otherwise attend similar live performance eventshosted at the Venues, but will also negatively affect ESE's ability to book quality performers as aresult of so-called'oradius restrictions" imposed on acts booked at MGM venues.

Notwithstanding its obligation under the gaming statute and related regulations to providethe Commission fair and reasonable signed agreements with any ILEV in order to be eligible toreceive a gaming license, MGM not only opted to forego any attempt to negotiate an ILEV withESE for submission along with its RFA-2 application, but has now filed a lengthy formal writtenopposition to ESE's petition for ILEV status. By forcing ESE to actively defend its petition fordesignation as an ILEV rather than in good faith negotiating a fair and reasonable ILEVagreement, MGM has chosen to inconvenience, financially burden and otherwise attempt tointimidate ESE into entering into an unreasonable and unfair ILEV agreement. Such conduct onthe part of MGM is unbecoming of the only remaining applicant for the sole gaming licenseavailable to be awarded in western Massachusetts.


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Statutorv and Regulatorv AnalysisM.G.L. c.23K $ 2 defines an ILEV as"a not-r-profit or municipally-owned

perrmnce venue designed in whole or in part r the presentation of live concerts, comedy ortheatrical performances, whiclt the commission determines experiences, or is likely toexperience, a negative impact from the development or operation of a gaming establishment."As a not-for-profit corporation organized under M.G.L. c. 180 owning and operating the Venues,both designed in whole or in part for the presentation of live concerts, comedy or theatricalperformances, ESE fits, with respect to those specific matters, precisely within the statutorydefinition of an ILEV.

In making an ILEV determination, M.G.L. c.23K $4(39) and205 CMR 126.01(2)bothrequire the Commission to "consider factors including, but not lmited to, the venue's distancefrom the gaming establishment, venue capacity and the type ofperrmances offered by thevenue." Located directly across the Connecticut River in West Springfield, approximately 2miles from the MGM proposed $800 million gaming establishment, and having similar seatingcapacities and offering the same types of live concerts, comedy or theatrical performances thatwill be offered by that gaming establishment at the various downtown Springfield venues, it isdifficult to imagine how the ESE Venues would not, or likely not, experience any negativeimpact from the development or operation of that gaming establishment. In fact, the ESEVenues are the exact type of live entertainment performance venues entitled to the protectionsafforded under the Gaming Statute and regulations.

The conditions under M.G.L. c.23K $21 in order for MGM to be an eligible licensee of agaming license include the requirement that MGM "meet with...not-r-profit venues locqted inthe commonwealth to discuss a mitigation plan which may include, but shall not be limited to,


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dgreements regarding event scheduling, promotons, tcket prces, marketng and otheroperations which may impact the viability of such . . . not-for-profit entertainment venues. Thecommission shll encourage the establishment of such a mitigaton plan throughfair andreasonable discussion." The mitigation agreement offered by MGM to ESE after ESE filed itspetition for designation as an ILEV, and the limited discussions MGM has had with ESEconcerning the terms of that agreement have been neither fair nor reasonable.

Finally, it is important to note that under M.G.L. c. 23K $15(10) and $17(b), until MGMprovides the Commission with a"foir and reasonable" signed agreement with any impacted liveentertainment venue, MGM shall not be eligible to receive a gaming license.

The OppositionMGM's Opposition acknowledges facts and contains other information which taken

alone support a determination by the Commission that the ESE Venues are an ILEV. Facts andinformation contained in the Opposition and related exhibits include acknowledgment that theVenues are not-for-profit owned performance venues, designed in whole or in part for thepresentation of live concerts, located approximately 2 miles from the MGM proposed gamingestablishment, the Venues have capacities similar to the venues that will be associated withoperation of the MGM gaming establishment, and that the live performances offered at theVenues will be similar to or the same as those that will be offered at the MGM venues. In thatregard, the Opposition actually supports ESE's petition and a designation by the Commission ofthe Venues as an ILEV.

The MGM Opposition is, however, also misleading, inaccurate and unfair. To beginwith, the test of the Opposition misrepresentsthe"Highlights" of the Cross-Marketing and Non-Competition Agreement attached as Exhibit A to the Opposition (the "Agreement") by failing to


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indicate that each of the more substantive and significant covenants and obligations listed in theOpposition is qualified by or subjectto "MGM'r sole qnd absolute discretion" or tobe"determined n MGM's sole and reasonable discreton'o nthe actual Agreement. A copy ofSection 1.1 of Exhibit A to the Opposition highlighting the language missing from the"Highlights" listed in the text of the Opposition is attached this Response as Attachment 1.Based upon MGM's decision to initially ignore ESE and to later aggressively oppose its petitionfor designation as an ILEV, ESE is understandably not at all comfortable with exercise by MGMof its sole discretion, purportedly reasonable or otherwise.

A further example of MGM's tactics and the unfair nature of the Agreement is MGM'spromise it"shall not enter into any agreement with any perrmer or sltow which, through aradus restricton or otherwise, precludes perrmances by that perrmer or show at theVenue." However, it must be noted that the terms of the Agreement also provide " [iJn the eventMGMfails to nclude such a radius restrction exempton in any contract or otherwiseinadvertently prohibits a performance in volation of [the AgreementJ, MGM shall grant awaver to such visitng perrrner or show t the wrtten request of ESE' and"ESE shll not beenttled to any other remedy for IMGM'rJ brech of ths Secton [of the AgreementJ."(Emphasis supplied). See p.6 of Opposition and Section 2.1 of Agreement. This provisionwould essentially leave ESE in the position of having no effective means of confirming MGM'scompliance with the radius restriction covenant or any meaningful remedy in the event it were tobe harmed by MGM's failure to honor that commitment.2

2It is difficult to imagine how an organization of the size and purported sophistication of MGM might"inadvertentlf' fail to include a radius restriction exemption in any entertainment contract, however, theimpossible burden of determining MGM's compliance with the covenant would be on ESE and there


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The Opposition also suggests fhat apetitioner must somehow "demonstrate a negativeimpact by a casino developmenl" in order to be designated an ILEV by the Commission. SeeOpposition af p.7. There is no such burden or obligation required of a petitioner anywhere in theGaming Statute or regulations. That notwithstanding, the ESE petition, the Opposition, theMGM Presentation and this Response when taken together provide overwhelming support for adetermination by the Commission that the ESE Venues will experience, or are likely toexperience, a negative impact from the development or operation of the proposed MGM gamingestablishment. In fact, the Opposition and the MGM Presentation taken alone acknowledgesufficient facts and provide ample other information, including the distance of the Venues fromthe proposed gaming establishment, their seating capacity and the type of perfonances offered,to enable the Commission to determine that the Venues either will experience, or are likely toexperience, a negative impact from the development or operation of the proposed MGM gamingestablishment.

In addition, the Opposition alleges that the only effects of the Venues being locatedapproximately 2 miles from the proposed MGM gaming establishment will be positive, andsuggests that those positive effects should be taken into consideration by the Commission inconnection with its determination of whether the Venues should be designated an ILEV. Again,even if in the very unlikely event there was any positive impact on the Venues or ESE from theoperation of the gaming establishment, there is no statutory or regulatory support for theCommission to consider it in connection with its determination of an ILEV designation.

would be no meaningful consequence for any breach by MGM even if ESE were to suffer substantialharm a result that breach.


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Overall, in light of the preeminent role ESE plays in westem Massachusetts as a regionaleconomic driver and leader in live entertainment, MGM's conduct in initially opting to ignoreand now actively oppose ESE's designation as an ILEV is regrettable. The ILEV Agreementoffered by MGM to ESE is unfair and unreasonable and, in offering such an agreement andopposing ESE's petition for designation as an ILEV, MGM has failed to satisfu its obligationsunder the Gaming Statute and regulations for issuance of a gaming license.

ConclusionOn the basis of the facts and other information contained in (i) the ESE petition for

designation as an ILEV, (ii) the MGM Opposition, (i) the MGM Presentation (iv) this Response,and (v) any additional testimony and documentation to be presented at the public hearingscheduled for January 28,2014, ESE hereby respectfully requests the following:

1. That the Commission designate the ESE Venues an ILEV;2. That pursuant to G.L. c. 23K $ 17(b), the Commission take no further action onMGM's application for an RFA-2 gaming license until MGM enters into a "fair andreasonable" ILEV Agreement with ESE;3. That in the event MGM fails to negotiate an ILEV agreement with ESE in good faiththat the MGM application for an RFA-2 gaming license be denied; and4. That the Commission take whatever other or further actions as may be necessary orappropriate under the gaming statute and regulations.

[Sgnture on Followng PgeJ


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Respectfu lly submitted,EASTERN STATES EXPOSITIONBy Its Attorneys,

Mark D. Cress (BBO f552268)Bulkley, Richardson and Gelinas, LLP1500 Mai Street, Ste. 2700P.O. Box 15507Springfield, MA 01.L1 5-5507TeL (a13) 272-6255Fax (413) 785,[email protected]


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ATTACHMENT A1..1. MGM agrees to work in good faith with ESE to cross-market with and promotethe Venue as follows:

(a) MGM will promote Venue events through on-property marketingplacements and signage (determined in MGM's sole and absolute discretion) atthe Project on a monthly basis during the term of this Agreement. ESE shalldesignate (subject to reasonable approval rights of MGM) which Venue eventsshall be promoted, and shall provide digital content and/or print ready graphicsfor this purpose.

(b) MGM will make tickets of the annual BIG E Fair at the Venueavailable for purchase online through the Project homepage, on-site at theProjecf and to MGM employees through the M Life Insider Employee portal orsimilar in-house employee portal and channels.(c) MGM will send targeted e-mails promoting events at the Venue asdesignated by ESE in accordance with Section 1.1(a) to M Life members in theSpringfield and surrounding areas, the number and frequency of which shall bedetermined in MGM's reasonable discretion.(d) MGM will promote events at the Venue designated in accordancewith Section 1.1(a) through its various social media channels (includingFacebook and Twitter), the number and frequency of such social media postsshall be determined in MGM's reasonable discretion.


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205 CMR: MASSACHUSETTS GAMING COMMISSIONIMPACTED LTVE ENTERTAINMENT VENUES05 CMR 126.00:

Section126.01: Determination of ImpactedI26.01 : f)etermination of Imnacfed

Live Entertainment VenuesLive F,ntertainment Venues

(1) General. The following shall be an impacted live entertainment venue for purposes ofM.G.L. c. 23K and 205 CMR:(a) A venue located in the commonwealth that has executed an impacted live entertainmentvenue agreement with the applicant for a Category I or Category 2 license which agreementwas submitted with the RFA-2 application and is in compliance with M.G.L. c. 23K,$ 15(10); or(b) A venue located in the commonwealth that has been designated an impacted liveentertainment venue by the commission under M.G.L. c. 23K, $ 17(b), and 205 CMR110.01(2) after the submission of an applicant's RFA-2 application upon written request bythe venue for the venue to be designated an impacted live entertainment venue with respectto the specific gaming establishment.(2) Impacted Live Entertainment Venue Determination bv Commission. A venue seeking tobe designated an impacted live entertainment venue in accordance with 205 CMR 1 10.01(1Xb)shall submit a written request to the commission no later than ten days after receipt by thecommission of the RFA-2 application for a gaming establishment for which the venue seeks tobe desigrrated an impacted live entertainment venue. The commission will make a determinationon the request at an open meeting at least 30 days prior to the public hearing on the applicationheld pursuant to M.G.L. c. 23K, $ l7(c). In determining whether a venue will be designated asan impacted live entertainment venue, the commission shall ensure that the venue meets thedefinition of impacted live entertainment venue as set forth in M.G.L. c.23K, $ 2, and shall, inaccordance with M.G.L. c. 23K, $ 4(39), consider factors including, but not limited to, thevenue's distance from the gaming establishment, venue capacity and the type of performancesoffered by that venue. Further, the commission will consider whether the applicant intends toinclude a geographic exclusivity clause in the contracts of entertainers at the proposed gamingestablishment, or in some other way intends to limit the performance of entertiners withinMassachusetts. Thecommission'sdeterminationwillbemadeafterareviewoftheentireRFA-2application submitted by the applicant for a gaming license as well as any independentevaluations provided by either the venue or otherwise.(3) Impacted Live Entertainment Venue Agreements. An applicant for a license for a gamingestablishment shall negotiate an agreement with each venue determined by the commission tobe an impacted live entertainment venue for their proposed gaming establishment. The applicantshall submit to the commission a signed agreernent with each impacted live entertainment venueto its proposed gaming establishment either as part of its RFA-2 application in accordance withM.G.L. c. 3K, $ 5(10) or the parties shall follow the protocol and procedure outlined in20s cMR 126.01(4).(4) Negotiation of an impacted live entertainment venue Agreement after the applicant hassubmitted an RFA-2 application.(a) Participation in Process. In accordance with M.G.L. c. 23K, $ 17(b), 205 CMR126.01(4) provides the protocol and procedure for reaching a fair and reasonable impactedlive entertainment venue agreement between the applicant and the venue. Upon beingdesignated an impacted live entertainment venue by the commission in accordance with205 CMR 126.01(2) the venue and the applicant shall be bound by this procedure.L In the event the applicant shall fail or refuse to participate in the arbitration processset forth in 205 CMR 126.01(a)(c) with any venue determined to be an impacted liveentertainment venue under 205 CMR 126.01(2), the commission may deny theapplicant's RFA-2 application or condition the issuance of the license.


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126.01:. continued205 CMR: MASSACHUSETTS GAMING COMMISSION

2. In the event a venue designated an impacted live entertainment venue fails or refusesto participate in the arbitration process set forth in 205 CMR l2.01(4)(c), thecommission may deem the venue to have waived its designation as an impacted liveentertainment venue. Provided, however, the commission may nevertheless impose asa condition on any a Category I or Category 2 license any requirements it deemsappropriate for mitigation of negative impacts from the development or operation of alicensed gaming establishment.3. An applicant or venue may petition the commission at any time for a finding that theother party has failed or refused to participate in the arbitration process set forth in205 CMR 126.01(a)(c) and may request a remedy in accordance with 205 CMR126.01(4)(a)r. or 2.(b) NeeotiatedAqreement. PursuanttoM.G.L. c.23K, $ l7(b),theapplicantshallnegotiatea signed agreernent with a venue within 30 days from the impacted live entertainment venuedesignationbythecommissioninaccordancewith205CMR126.0l(2). Intheeventthattheapplicant and venue cannot reach an agreement within the 30 day period they shallcommencethebindingarbitrationprocedureoutlinedin205CMRl26.0l(4)(c). Theparties,however, may engage in binding arbitration in accordance with 205 CMR 126.01(4)(c) at anytime during that 30 day period.(c) Bindine Aitration Procedure.l. The applicant and impacted live entertainment venue may, by mutual agreement,engage in this binding arbitration procedure at any time after the date the impacted liveentertainment venue determination is made by the commission in accordance with205 CMR 126.01(2). Provided, however, the parties must engage in this bindingarbitration procedure if no impacted live entertainment venue agreement is filed with thecommission within 30 days of the date the designation is made by the commission inaccordance with 205 CMR 126.01(2).2. The parties shall file with the commission a notice of intent to commence arbitrationprior to selecting an arbitrator.3. No later than five days after the passage of 30 days since the designation is made bythe commission in accordance with 205 CMR 126.01(2) the parties shall select a neutralarbitrator and submit their best and final offer for an impacted live entertainment venueagreementpursuanttoM.G.L. c.23K,$ l5(10)tothearbitratorandtotheotherparty.If they cannot mutually select such single arbitrator, each party shall select one neutral,independent arbitrator who shall then mutually choose a third neutral, independentarbitrator. [n the event that a third neutral, independent abitrator is not selected withinthe five day period, the commission or its designee shall select the third neutral,independent arbitrator. The three arbitrators shall preside over the matter and resolve allissues, including the final decision, by majority vote.4. [n conjunction with the filing of its best and final offer submitted in accordance with205 CMR 126.01(a)(c)3., the applicant shall submit a copy of the impacted liveentertainment venue agreements, if an it has executed with other venues concerning theapplicant's proposed gaming establishment. Either parry may submit executed impactedlive entertainment venue agreements from other proposed gaming establishments in theCommonwealth which the party considers relevant.5. The reasonable fees and expenses of the single arbitrator shall be paid by theapplicant. [n the event that three arbitrators are engaged, two thirds of the reasonablefees and expenses shall be paid by the applicant andl/g shall be paid by the venue.6. Within 20 days after receipt of the parties' submissions under 205 CMR126.01(4)(c)3., the arbitrator(s) shall conduct anynecessaryproceedings andfilewith thecommission, and issue to the parties, a report speciffing the terms of the impacted liveentertainment venue agreement between the applicant and the venue. In reaching thefinal decision, the arbitrator(s) shall select the best and final offer of one of the partiesand incorporate those terms into the report. The arbitrator(s) may make adjustments tothe best and final offer only if necessary to ensure that the report is consistent withM.G.L. c.23K.


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205 CMR: MASSACHUSETTS GAMING COMMISSION126.01: continued

7. Nolaterthanfivedaysaftertheissuanceoftherortofthearbinator(s)asprovidedin 205 CMR 126.01(a)(c)6., the parties shall sign an impacted live.rntertainment venueagreement and fle it with the commission in accordance with M.G.L. c. 23K, $ 15(10)and205 CMR 126.01(3) orthearbitrato/s report shallbe deemedto betheimpactedliveentertainment venue agreement between the parties.

REGULATORYAUTHORITY205 CMR 126.00: M.G.L. c.23K, $$ 4(37),4(39),5,and77.


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205 CMR: MASSACHUSETTS GAMING COMMISSIONNON-TEXTPAGE


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From: "Mathis, Michael" (mmathisGmgmresorts.com>Date: February 19, 201,4 aL 5:31:59 PM ESTTo: "Cassidy, Eugene" Cc : " j if I . griffinG state . ma. us


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Michael MathisPresident - MGM SpringfieJ-d4882 Frank Sinatra Dr. I Las Vegas, Nevada 89158Tel-: +I 102 590-5581 | Cel-l , +L 102 525-1100mmathi s Gmgmresort s . com(mai l-to : mmathi s Gmgmresort s . com)IDescription: cid: image002. gifG01CD7545. 06E5F760]From: Cassidy, Eugene [mailto:ecassidyGthebige.com]Sent: Wednesday, February 19, 20L4 1,2:47 PMTo: Mathis, Michael-Cc : j i11. griffinGstate.ma. usSubject: Opening a dialogueDear Michael-:T trust you are disappointed, as I am, with the outcome of yesterday's hearing before theGaming Commission. Even though I'm somewhat encouraged to once again hear that MGMintends to take advantage of the additionaf time al-l-owed by the Commission to try toreach an agreement, I do not believe it is accurate as suggested in today's newspaperthat talks have been ongoing or that there has been meaningful discussion with regard todeveJ-oping a mutualy beneficial relationship between MGM and Eastern States Exposition.T and others responsibfe for protecting the interests of the Exposition are hopeful thatwilf change over the coming week.fn order to avoid confusion and in order for any discussions to be as productive aspossible, T believe it is -mportant for MGM to recognize the folowing:1. Commissioner Crosby had it right when he described ILEV status as an "on-offswitch"-you either are or aren't an ILEV. The Commission's consultant simply got ithtrong when he suggested that the Exposition venues shoul-d only be considered an ILEVduring the Big E fair and for some short period beforehand and afterward. The Expositionbel-ieves its venues fit precisely within the defj-nition of an ILEV under the gaming lawand, without a fair and reasonable agreement with MGM, both the venues and the Expositioncould no doubt suffer devastatingly negative impacts from the devefopment and operationof a casj-no in Springfield.2. As an applicant for a casino license, MGM has an affirmative obligation underthe l-aw to meet with the Exposition to discuss a fair and reasonable mitigation plan. Inoffering a very one-sided agreement at the fast minute on a take-it-or-1eave-j-t basi-s,and only after Eastern States Exposition was forced to fife an ILEV petition, MGM hasfailed to satisfy its obligation j-n order to be awarded the only western Massachusettscasino l-icense.? Regardless of whether we are abl-e to negotiate an acceptable agreement durinqthe coming week or the Commission ul-timately issues a rufing adverse to the Exposition,we are prepared to continue to vigorously advocate our position including in court, ifnecessary. hle feel- that the.l-aw and the record are both on our side, and sincerelybelieve that the lssues invol-ved are critical enough to the short and long-term health ofthe institution to justify such action.I hope you are able to understand and appreciate the spirit of this attempt to initiatean honest dialogue that wil-l- be mutually beneficial- to our respective organizations. Iwoul-d appreciate it lf you would fet me know when you are availabl-e to meet in the nextsevera.l- days and I wil-l- do my best to accommodate your schedul-e.Thank you.Gene Cassidy


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EASTERN STATES EXPOSTTIONAmericar s Prmier ExpositionCel-ebratinq Industry, Aqriculture and Educationsince 1916The Big E September 1-2 to 28, 2014 EUGENE J. CASSIDY, CFE President and ChiefExecutive Officer1305 MEMOR]AL AVENUEVEST SPRINGFIELD, MASSACHUSETTS O'1089413-7 31 -2443find us at www. Lhe-ige. conchttp: //www. thebige. com>This e-mail transmission cntains information that is corfidential. If you are not theintended recipient please notify the sender immediately by return e-mail- and defete al-J"copies.


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-----Original- Message-----From: Cassidy, Eugene Imailto:ecassidyGthebiqe.com]Sent: Saturday, February 22, 2014 3:23 PMTo: Mathis, MichaefCc: Cress, Mark; Nosal, Jed M. (JNosalGbrownrudnick.com); Nastasia, Martin T.;j ill- . grif f inGstate.ma. us,' Chase Donaf d R. ; Cassidy, EugeneSubject: Re: Proposed ESE Bl-ue Tarp Cross-Marketing AgreementGreetings Mike.It was nice to finally be abfe to tafk with you on the phone J-ast night. However, I findmyself at a dj-fficut juncture working from an iphone in a church parking lot after afuneral- 85 mifes from my office, whife our attorney is on a long planned family ski trlpin Northern Maine: trying to craft an agreement between my organization and MGM. Itsimply cannot be accompfished by Monday.That said, we must make progress so aftow this: ESE has long been the biggest mostpowerful five entertainment attraction j-n the region and I believe ESE can partner withMGM in a mutuafl-y beneficial way that hel-ps buil-d MGMrs business whil-e helping to protectand keep secure the business of ESE, a business which provides economic horsepower to theREGON.We both must prosper for the region to prosper. fmperil ESE, and the region suffers.ESE has proven its expansive history of economic return to this area. It MUST be noted;we are stewards. And with stewardship comes a duty beyond that which focuses on banks,bondholders and stockholders, we have a duty to the public. We are a public charity andas such we first and foremost. have a duty to protect the interests of the j-nstitution.Our original proposal to "partner" with MGM was intended to accompfish that by co-sponsoring and co-promoting certain entertainment events that woul-d give MGM a vestedinterest in the success of those events. That vested interest would also decrease thelikefihood of negative impacts as a resuJ-t of competition from MGM for simifar acts insimil-ar venues, especially around the time of and during the Big E fair.VrIe are unique among would-be peers. I have repeated over-and-over again the term"partnership". I bel-ieve that with the draw-pob/er of MGM you can assist us in the ever-more-difficult quest to attract first rate entertainers. (You can al-so put us out of theentertainment business...and more.) V'le spoke about acts that cost $200k to $300k. Tn apartnersh-p agreement where MGM assists ESE to bring acts to the region, where we shareas partners in the overhead and receipts, which coufd mean a subsidy that woufd be sharedby both parties, or no subsidy at all depending upon success of the event. An agreementthat paid attention to the need for advertizing silence to respect the business of theother party, one in which your name coul-d be used in associaton with ours as a promoting"sponsor" and vice versa to "sef-L" our respective properties. I befieve this woufd be afar more productive arrangement for both parties compared to the pre, post and during BigE "bfackout" arrangement advocated by the Commission's consuftant.As I said in our board room at the Brooks Building in January "there is something tothj-s". But I need your attention, creative thj-nking, and secure interests in thisorganization. Neither me nor my board can p-ay fast or loose with this 100 year o1dinstitution that plays one of the top TEN most important rol-es in this region's economy.


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We need MGM's support.We were forced to seek protective status because we received not one moment of attentionsfrom MGM. I now ask that you consent to the Commission's designation of ESE as an ILEV,and f give you our commitment that we witl work together with MGM as stewards for thisregion in the next 30 days to solidify a mutuafly beneficial agreement.Thank you, partner.GeneAlf the best,GeneThis message emanates from a hand hel-d device. Pfease forgive speling. punctuation andgramar issues as well as any perceived curtness.> On Feb 21, 2014, at 4:00 PM, I'Mathis, Michael" wrote:> Gene, thanks. Let's tal-k at 5:30 your time. Irl-f send around a> call-in to this group (excluding, or sparing might be more accurate,> Jitl)> Mike> Michael Mathis) President - MGM Springfield> 4882 Frank Sinatra Dr. I Las Vegas, Nevada 89158> Tef: +1 702 590-5581 | Cel-l-: +I 102 525-1100 mmathisGmgmresorts.com

> -----Original Message-----) From: Cassidy, Eugene fmailto:ecassidyGthebige.com]> Sent: Friday, February 21, 201,4 12:58 PM) To: Mathj-s, Michael-) Cc: mcressGbulkley.comi Nosal, Jed M. (JNosalGbrownrudnick.com);) Nastasia, Martin T.; jill-.griffinGstate.ma.us> Subject: Re: Proposed ESE Blue Tarp Cross-Marketing Agreement> Mike) I am in a board meeting until- 5: was not aware of your emaif untif this Moment.> I'l-1 be back in my offj-ce at 5:30pm today or we can scheduf e a cal-l for 8:30am tomorrowwhile I am en route to a funeral Mass in Lexington Mass.> Al-l- the best,) Gene> This message emanates from a hand hel-d device. Please forgive spelling, punctuation andgrammar issues as wel-l as any perceived curtness.> On Feb 21, 201"4, aL 2220 PM, "Mathis, Michael" wrot e :) Gene,> If 3 p.m. doesn't work, I'11 try and stay flexibl-e this afternoon and even over theweekend.


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> Awaiting your response.> Mike> From: Mathis, Michael> Sent: Friday. February 21, 2014 i-0:07 AM) To: 'Cass j-dy, Eugene') Cc:'mcressGbulkJ-ey.com(maj_1to:mcressGbulkley.com>'; Nosal_, Jed M.(JNosalGbrownrudnick.com(maifto:JNosalGbrownrudnick.com>); 'Nastasia, Martin T.'> Subject: RE: Proposed ESE Bfue Tarp Cross-Marketing Agreement> Gene,) Are you availabfe for a ca.l-l- at 3 p.m. EST today to discuss? For our side, it will bemyself, our counsel Jed Nosal and his coJ-league Marty Nastasia.> If that works, I can email- around a cal-l-in number. Let me know.> Mike) From: Cassidy, Eugene [mailto:ecassidyGthebige.com]> Sent: Friday, February 21, 201-4 9:28 AM) To: Mathis, Michae) Cc : j ill. griffinGstate.ma. us;> mcressGbulkley. com; Nosal, Jed M.> ( JNosal- Gbrownrudni ck . com ) ;> sns G f it z geraldat l-aw. com> Subject: RE: Proposed ESE Blue Tarp Cross-Marketing Agreement) Dear Mike:> Thank you for your letter of February 20, 2014. It is an another expl-icitacknowl-edgment by MGM of what the Commissioners, their consuftants and common sensesuggests--that unfess the Eastern States Exposition venues are protected, they will nodoubt be subject to negative impacts as a resul-t of the devel-opment and operation of an$800 million casino fess than 2 miles away in downtown Springfield. That alone should besufficient to support a determinatlon by the Commission that the Exposition venues areILEVs and entitled to protection, regardless of what may be the l-imited events, thetimeframes involved, or the casino operation related venues from which such negativeimpacts emanate. Neither the Gaming Statute or regulations contain any minimum numbersof events or timeframe requirements, and there are no provisions that suggest theCommission should base its ILEV determination upon whether the 1ike1y negative impactswil-l- resul-t from gaming refated entertainment operations conducted on casino ownedproperty or other TLEVs. Considerlng the circumstances in question, one must necessariJ-yask, what better time woud there be for MGM to aggressj-vely market its own entertainmentevents than when approximately 1.5 mil-l-ion people w1ll- be pJ-anning to travel to or be inthe western Massachusetts region to attend the annual- Biq E fair? If even a smafffraction of that population is enticed to attend MGM sponsored events hefd before, afteror in l-ieu similar acts offered during the Big E, the negative impacts on the Expositionwlfl no doubt be devastating.) Your letter afso asks the Commission to take certain action for which there 1s noauthority whatsoever under either the Gaming Statute or reguJ-ations. Once there is adetermination that there is or will- likely be a negative impact as a result of thedevelopment or operation of a gaming establishment and an ILEV determination has beenmade, MGM has an affirmative obligation under the statute and regulations in question tonegotiate an agreement with the ILEV. In the evenL the parties are not abl-e to reachsuch an agreement, the regulations specifically provide a "protocol and procedure forreaching a fair and reasonabl-e impacted l-ive entertainment venue aqreement between theapplicant and the venue." That specified protocol and procedure involves a decision


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,rendered by a neutral arbitrator or arbitrators in which MGM would be required to submitcopies of all other ILEV agreements it has executed with other venues, as opposed tomerely asserting those provisions of such other ILEV agreements that support itsposition. See 205 CMR 126. The protocol- and procedure specified in the regulations doesnot allow an applicant to pick and choose in its discretion what it deems acceptable interms of an ILEV agreement and then submit that agreement to the Commission forendorsement as you and MGM have.> An obvious illustration of why such an approach was not intended under the GamingStatute and regulations and why it is neither fair nor reasonable, is MGM's attempt toboth disregard the bel-j-ef expressed by the Commissioners and their consuftant thatadequate protection of the annual Big E needs to extend for some period before and afterthe fair, whife al-so striping the agreement of any provisions intended to create a vestedj-nterest in MGM that woufd encourage promotion rather than "poaching" of the Big E. Forexample, the protocof and arbitration process required under the gaming regulations woufdlike1y encourage MGM to consider whether it makes more sense to co-promote and sponsorentertainment at and durj-ng the Big E, taking advantage of the tens of thousands ofcaptive attendees who wilf already be there, as opposed to agreeing to a 90-day"bl-ackout. " Giving MGM the option of totaffy ignoring either alternative by endorsing anarrang'ement that woul-d aflow MGM to capitalize on the Big E crowds to its excl-usiveadvantage and to the detriment of the Exposition is both unfair and unreasonabfe. Theposition advocated by you woul-d place the Exposition in the position of being at thecomplete mercy of MGM. Based upon MGM's conduct to date, that is a position with whichthe Exposition is not at all- comfortable, and which it is prepared to take whateveraction may be necessary to try to avoid.> Finaly, and once again, the fast minute, "gun to the head" take it or l-eave ltapproach MGM has efected to take cal-ls into the question the larger question of whetherit should be considered eligibfe to be awarded the excfusive western Massachusetts gamingl-icense. Attempting to subvert the explicitJ-y required protocol and procedures under thegaming regulations in order to avoid its affirmative obligations under the ILEVprovisions of the gaming legislation is indicative of the type conduct l-ikely to continueunder other provj-sions of that legislation in the event MGM is awarded a casino l-icense.> That sald/ I remain willing to discuss, with or without counsel, the potentiaf terms ofa fair and reasonabl-e ILEV arrangement. I woul-d al-so ask that you join me in requestingthat Ms. Griffin make both the MGM proposal and this response part of the Commissiontsrecord and avaifabl-e to the Commissioners for consideration prior to Monday's meeting inthe event \^re are unabl-e to reach a mutually acceptable agreement prior to that t j-me.> I look forward to hearing from you.> Sincerely,> Gene> EASTERN STATES EXPOS]TTON> Cefebrating fndustry, AgricuJ-ture and Education) since 1916> The Big E September 12 to 28,2014 EUGENE J. CASSIDY, CFE> President and Chief Executive Officer> 1305 MEMORIAL AVENUE> IEST SPRINGFIELD, MASSACHUSETTS 01089> 41,3-'7 3'7 -24 43> find us at www.thebige.com> This e-mail- transmission contains information that is confidential. If you are not theintended recipient please notify the sender immediatety by return e-mail- and delete afIcopies.

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> Frorn: Mathis, Michael fmailto:mrnathismqmresorts. com]) Sent: Thursday, February 20, 201,4 6:22 PM> To: Cassidy, Eugene) Cc : j ill . griffinGstate.ma. us;) mcressGbulkley. com(mail-t.o:mcressGbulkley. com>; Nosal,Jed M.> ( JNosalbrownrudnick. com) ;> sns G f it zgeraldat law. com{mai l-t o : sns G f it z geraldatlaw. com>> Subject: Proposed ESE BJ.ue Tarp Cross-Marketing Agreement.) Gene,> Pl-ease review and advise if this proposal is acceptabl-e.> Myself and our counsel- will make oursel-ves avaiJ-abl-e tomorrow to discuss as necessary.> T,ike you, f am l-ooking' forward to resolvinE this matter, and working together on what fam sur'e wiLl be a long and rewardinq relationship between our org:anizations.> Mike> Mi-chael- Mathis) Presj-dent - MGM Springfield> 4882 Frank Sinatra Dr. I Las Vegas, Nevada 89158> Te-l-: +1 702 590-5581 I Ceff z +1, 7Q2 525-'77A0> mmathismgmresorts. comdmail-to :mnathisGmgmresorts . com>>


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MGMG;il SPRINGFI ELDVIA EMAIL: [email protected] 20,2014Eugene J. Cassidy, CFEEastern States ExpositionPresident and Chief Financial Officer1305 Memorial AvenueWest Springfield, Massachusetts 1 0089

Re: The Bie E/MGM Snrinefield Cross-Marketine AsreementDear Mr. Cassidy:This letter agreement (this "Agreement") will set forth the commitment of Blue TarpreDevelopment, LLC, as the applicant for the Western Massachusetts Region B Category 1MGM Springfield gaming license ("MGM"), to cross-market and otherwise support the Big Efair held annually on the Eastern States Exposition grounds in West Springfield, MA (the "BigEo'), in accordance with the terms of the attached executed Cross-Marketing and Non-Competition Agreement (the "Executed Offer"). This Agreement is intended by MGM to be abinding and enforceable commitment, which (i) the Eastern States Exposition ("ESE"), as theowners of the Big E, can rely upon in voluntarily withdrawing its petition for Impacted LiveEntertainment Venue ("ILEV") designation (the "Petition") or (ii) the Massachusetts GamingCommission ("Commission") can rely upon as binding on MGM should it deny ESE's Petitionand should MGM be fortunate enough to be awarded a category 1 gaming license and open theproposed gaming establishment.My understanding from viewing the Commission hearing this past Tuesday morning was that atleast certain of the Commissioners did not view the Big E as an impacted live entertainmentvenue and concluded that any concerns that the Big E might experience negative impact fromMGM's proposed development were addressed through the commitments MGM made in thedraft cross-marketing and non-competition agreement which we previously proposed to ESE.However, because ESE did not accept that proposal, there was some question as to whetherMGM's offer was enforceable.We also appreciate what we interpreted to be Commissioners Zuntga and Cameron's commentsrelated to the benefit MGM is bringing to the MassMutual Center, Symphony Hall and CityStage through commitments to sponsor concerts and events at those venues rather than competedirectly with them. Within the context of the ILEV determinations, this is another reason whywe believe the Big E's Petition is misguided. Under statute, ILEV designation requires that therebe a "negative impact from the development or operation of a gaming establishment." M.G.L. c.23k, $ 2. We believe the statute contemplates a negative impact from competition at the gaming

MGM Springfeld Community Office1441 Main Sueet' Suite 137Springfield, M,4,01103413-735-3000


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MGM SPRINGFI ELDEugene J. Cassidy, CFEPage2 of 4establishment, and not competitive impact from a company's support of other local venues, anobjective the Gaming Act clearly encourages.MGM is not asking ESE to accept our interpretation of the Commission's recent hearing nor theoperative statutory and regulatory framework. We are simply providing context for our positionand the reason why we have executed our offer, which even absent ESE's countersignature, weintend to be enforceable subject to the two conditions set forth above. MGM believes that theExecuted Offer alleviates any potential argument that the Big E is likely to experience a negativeimpact with respect to the presentation of live concerts, comedy or theatrical performancesduring the period of the Big E. We understand that ESE is seeking certain financial and othercommercial commitments that benefit the Big E and the ESE's organization more broadly andare willing to have that dialogue in the appropriate context. We do not believe, however, thatESE can or should use the ILEV process for a business negotiation that is outside the scope ofand irrelevant to the ILEV component of the Gaming Act. We hope and expect that theCommission shares our view.Discussed further below are the essential terms to which MGM is and is not willing to commit inthis regard.A. MGM Commitments to ESE (as reflected in the Executed Offer)Do No Hrm. In Section 2.0 of the Executed Offer, MGM has committed to not to enter intoany agreement with any performer that would prevent that performer from performing at ESE'svenues. Further, in that section, MGM has committed not to book any ticketed performance atthe Project or the Springfreld Sites during the 17-day period of the Big E (the "RestrictedPeriod"). The lanzuage in that section is verbatim what was requested by the Big E in its lastrevision.During Tuesday's Commission hearing, Mr. Hall of HLT Advisory stated that he believed thatthe above the Restricted Period should extend to 45 days before the Big E event and 30 daysfollowing, though I believe based on the nature of the discussion, he was not intending to be veryprecise in those ranges. We have not extended the Restricted Period for three reasons. First,through its proposed revision of our agreement, the Big E has acknowledged that it onlyreasonably needs protection during the 17-day period of the Big E, and not before or after.Second, MGM has prior contractual relationships with the owners of the MassMutual Center,Symphony Hall, and City Stage, that require essentially monthly programming of those venues.We believe it would be a breach of our commiftnent to agree not to program those venuesbeyond the Restricted Period, and certainly for the 3 months suggested by Mr. Hall's comments.Doing so would ironically result in ESE having negative impact on the MassMutual Center,Symphony Hall, and City Stage, a result certainly not intended by the Gaming Act orCommission regulations and that would contradict the positive impact MGM would bring to

MGM Springfield Community Ofce1441 M^1n Steet' Suite 137Springfield, M,\ 01103473-735-3000

G


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MGMG) SPRINGFI EIoEugene J. Cassidy, CFEPage 3 of4local venues. Third, we believe that the Commonwealth would be harmed by an over broadrestriction, and that the goals of the Gaming Act would be frustrated to the extent that MGM wasnot able to utilize entertinment for a 3 month period to drive tourism and visition, which is amajor aspect on which our business plan and gaming revenue projections are based.Co-Promote. In Section 1.1(a) - (d) of the Executed Offer, and consistent with HLT's findingson page 11 of its report, MGM has offered co-promotion of ESE's venues through our website,social media, and other marketing channels. Again, other than clariffing those obligationscommence with the opening of the project, the lanzuaee in those subsections is verbatim whatwas requested bl the Big E in its last revision. MGM, however, did not include ESE's proposedsubsections 1 . 1(e) - (, as further noted below.All other terms of the Executed Offer are self-explanatory and we believe consistent with theCommission's direction to incorporate the "Page 10 and 11" recommendations from HLT'sreport.B. Terms Requested by ESE that MGM did not AcceptThe Executed Offer which MGM has attached to this Agreement is based on the last version ofthe cross-marketing and non-competition agreement requested by ESE, as revised by ESE, withthe exception of the following terms, which MGM has rejected.Section 1.1 lel MGM will oenrt the rne of M-Life ooints to oruchase admissionsto the arrrrral eig E ftir.fi UCttl witt pLovie glonoiecr to f Sf ins r

fn UCtU an fSf wiU cthe motor coach indrmtrv on a vear u'ourcl basis.

MGM Springfield Community Office1,441, ]lai. Sueet' Suite 137Springfield, M.4,01103413-735-30m


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MGM G SPRINGFI ELDEugene J. Cassidy, CFEPage 3 of4Section 1.2

(a) tCtvt wilt on anannut Uasfeanue entetaintnent ol mmtthe amual giq E fai.UCtvt comections witnin tne ellterand ESLEcsents:fUt lvtCtvl witt spousoL anteanue entenainnent orat a munutlv ageed lroond talet will be rtuallywitnU tne entemainuent n

I hope the tenns of the Executed Offer are acceptable and that you will countersigu thatdocument and feel comfortable withdrawing the Petition. If not, it was important for MGM todemonstrate that we made every reasonable attempt to comply with the guidance theCommission provided in Tuesday's hearing, and will leave ESE to do the same, in advance oftheir ruling.Sincerely,/r,t'/*(7L2,-Michael MathisPresident and Chief Operating OfficerAttachments:MGM's Executed Offer to ESE, dated 2-20-14MGM's Executed Offer to ESE, dated 2-20-14 (redlined against MGM's l-17-14 offer)ESE's Revised Offer to MGM, dated l-22-I4cc: Jill GriffinMark Cress, Esq.Jed Nosal, Esq.Seth Stratton, Esq.

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correspondence between mgm springfield and eastern states exposition

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