An independent music club in Agoura Hills believes it has found a way to compete against the corporate giants of concert promotion – and now it is cueing up another venue. Canyon Club is located in a former supermarket at a strip mall off the 101 freeway. Owner Lance Sterling, who also owns the Saban Theatre in Beverly Hills, manages his endeavors through property operations company Sterling Venue Ventures. However, music has become more corporate in recent years, with certain radius clauses restricting artists from playing at independent venues. He believes the only one way to protect his business in L.A.’s competitive entertainment market is to grow, which is why he plans to open the Rose, a music venue in Pasadena that can hold up to 1,300 people. Sterling competes against large concert promoters Anschutz Entertainment Group in Los Angeles and Live Nation Entertainment Inc. in Beverly Hills. His strategy relies on reaching a mature demographic rather than twentysomethings, and booking vintage acts such as Three Dog Night, the Doobie Brothers and Cyndi Lauper as well as tribute bands and standup comedians. “I know how to build venues – I’m pretty good at it,” said Sterling. “I have a good connection with bands, because they know we meet and market just their show.” Food-based business Open Thursday, Friday and Saturday, the dinner-and-show Canyon Club holds approximately 1,100 people with average ticket prices running $28 to $34. Sterling tries to maintain a low overhead — producing some shows for as low as $10,000 — to be able to pay competitive wages to performers while still turning a profit. “Our model is 85 percent of the money goes to the band and 15 percent goes to paying expenses,” said Sterling. “Our job is to make money off of food and beverage.” He markets his shows through multiple media including print, radio, social media and billboards. The club serves approximately 600 meals a performance, ranging from $15 for chicken fingers to $49 for a filet. The venue hosts about 170 shows a year, and Sterling said the club’s average patron attends approximately 12 times a year. Both the food and entertainment cater to a target audience in their 40s and 50s. While each show brings in a different crowd, Sterling said he knows what menu items to prepare for the audience based on the act performing. Given the club’s dependence on food, Sterling’s competition isn’t limited to AEG and Live Nation – it also includes nearby restaurants. “(Other food outlets) are the No. 1 thing I lose business to,” he said. Sterling is placing a bigger focus on the food offerings at the Rose. Similar to the Canyon Club’s former supermarket location, the Pasadena music site used to be a Gelson’s Market. Sterling and his contractors have renovated it into a 1,700-person venue that offers two new food options. Inside the new club, located at 300 E. Colorado Blvd., is a food court where different chefs will have small stations to market their dishes seven days a week, allowing Sterling to capture revenue on days when no acts are performing. In addition, he recently purchased franchising rights to CaliBurger, a casual burger restaurant chain. A CaliBurger outlet will be attached to the Rose, providing another weeklong income stream as well as another option for hungry concertgoers. The Rose has already booked some big names such as Rickie Lee Jones and Paul Stanley of Kiss. Singer Judy Collins will take the stage opening night, which happens to be Valentine’s Day. Hard Rock heritage Sterling has been in the music business for decades, getting his break when he met Hard Rock Café International Inc. co-founder Isaac Tigrett, who also started House of Blues Entertainment. Sterling worked as vice president of operations and development for House of Blues but said he decided to part ways from the chain as it became more corporate. During his time with the company, Sterling would fly to his Atlanta venue the Tabernacle on a weekly basis to manage operations. After success with the Tabernacle, he sold the venue to SFX Entertainment for $6 million and soon after, decided to open the Canyon Club in Agoura Hills. Originally a grocery store, the 28912 Roadside Drive property is surrounded by tenants such as antique stores and casual dining restaurants. A Pat Benatar concert opened the venue in 2001. After about 10 years in business, Sterling said he started having issues booking artists, who had contracts with big concert promoters that prevented them from performing at the Canyon Club. To combat this issue, Sterling leased the Saban Theatre in 2013 so he could promise artists two gigs instead of one, in hopes of attracting the artists to his independent venues as opposed to contracting with bigger companies. Formerly the Fox Wilshire Theater, the Saban is considered an architectural landmark. In 2009, media mogul Haim Saban provided a $5 million grant to restore the orchestra, marquee and stage. Four years later, Sterling leased the property. “I opened the Saban to resolve our own problem (of booking acts),” he said. Now Sterling plans to repeat the process by opening the Rose. However, even as his enterprise grows, so does competition from large promoters. “They extend radius clauses to block me,” said Sterling. “It’s very anti-music, but from a business perspective, it does work.” Concert promoters such as AEG and Live Nation employ a common practice of artist contracts with radius clauses, preventing them from performing at other venues within a certain geographic radius for a certain amount of time. Radius clauses are often used for bands performing at festivals or on tours. “Promoters of the big festivals are paying big bucks for their headliners,” said William Hochberg, a music business attorney for L.A. law firm Greenberg Glusker Fields Claman & Machtinger. “They want to have exclusivity to back their investment.” For example, Coachella, an annual music festival in Indio organized by AEG subsidiary Goldenvoice, has radius clauses for some of its bigger acts, which Sterling said can prevent them from performing for up to six months within 300 miles of the festival. AEG and Goldenvoice did not respond to requests for comment. Sterling said these agreements hinder his business because certain acts are banned from performing at his venues within the designated radius. Therefore, by expanding his business to various regions of L.A., he believes he is better positioned to compete with these big concert companies because he can offer artists more shows equating to more money in independent venues. Irving Ronk, a music manager for talent management firm Plus Talent in East Lansing, Mich., said the big concert companies aren’t out to get smaller operators – they just follow industry practice. “A radius clause is not necessarily trying to block other venues from booking a show as much as it is trying to protect a show that they have already booked,” Ronk said. “If you think about a band, and they are playing in a city and they have two shows in the same area, they are essentially cutting their fan base in half. So the idea is if you put a radius clause in, you restrict that from happening.” Despite the tightening competition, Sterling believes in his model enough to expand its geographic footprint and he feels optimistic about the future. “Our goal next year is to break $20 million (between the venues in revenue),” he said. “Eventually you win. That’s why we’re still around.”