COMMONWEALTH OF MAS SACHUSETTS MASSACHUSETTS GAMING COMMISSION

In the Matter of:

BLUE TARP REDEVELOPMENT, LLC

RESPONSE OF EASTERN STATES EXPOSITION TO BLUE TARP REDEVELOPMENT'S OPPOSITION TO PETITION FOR DESIGNATION OF EASTERN STATES EXPOSITION AS AN IMPACTED LI\rE ENTERTAINMENT VENUE

Eastern States Exposition ("ESE") hereby responds to the Opposition (the "Opposition")

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

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

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

Live entertainment is an integral element of ESE's ability to attract large audiences and
its long history of success. ESE owns and operates certain live performance venues known as
the Xfinity Arena, an approximately 6,500 seat outdoor arena, and the Coliseum, an

approximately 6,000 seat indoor arena (together, the "Venues"), both designed in whole or in
1 See

report entitled

The Economic Impact of the Eastern States Exposition dated September 1.0,2013

prepared

by Regional Economic Models,Inc.

1688768.2

part for the presentation of live concerts, comedy or theatrical performances. Almost all of the

foregoing facts are acknowledged by MGM in its Opposition. According to the lead article appearing in the January 24,2014 edition of The Republican

following 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-promote and book at leastfour shows eqch at the MassMutual Center, Symphony Hall and CityStage each

yearfollowing the opening of the cesino." Located within such close proximity and offering the
same types of entertainment

in similarly sized venues, MGM's arrangement with various

Springfield 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 time attract enonous numbers of people that might otherwise attend similar live performance events
hosted at the Venues, but

will

also negatively affect ESE's ability to book quality performers as a

result of so-called'oradius restrictions" imposed on acts booked at MGM venues.

Notwithstanding its obligation under the gaming statute and related regulations to provide
the Commission fair and reasonable signed agreements with any ILEV in order to be eligible to receive a gaming license, MGM not only opted to forego any attempt to negotiate an ILEV with ESE for submission along with its RFA-2 application, but has now filed a lengthy formal written

opposition to ESE's petition for ILEV status. By forcing ESE to actively defend its petition for
designation as an ILEV rather than in good faith negotiating a fair and reasonable ILEV
agreement,

MGM has chosen to inconvenience, financially burden and otherwise attempt to

intimidate ESE into entering into an unreasonable and unfair ILEV agreement. Such conduct on
the part of

MGM is unbecoming of the only remaining applicant for the sole gaming license

available to be awarded in western Massachusetts.

Statutorv and Regulatorv Analysis

M.G.L. c.23K
$ 2 defines an

ILEV as"a not-r-profit or municipally-owned

perrmnce venue designed in whole or in part

the presentation

of live concerts, comedy or

theatrical performances, whiclt the commission determines experiences, or is likely to

experience, 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 theatrical
performances, ESE fits, with respect to those specific matters, precisely within the statutory

definition of an ILEV.
In making an ILEV determination, M.G.L. c.23K $4(39) and205 CMR 126.01(2)both
require the Commission to "consider factors including, but not lmited to, the venue's distance

from the gaming establishment, venue capacity and the type ofperrmances offered by the
venue." Located directly across the Connecticut River in West Springfield, approximately 2
miles from the MGM proposed $800 million gaming establishment, and having similar seating
capacities and offering the same types of live concerts, comedy or theatrical performances that

will be offered by that gaming establishment

at the various downtown Springfield venues,

it is

difficult to imagine how the ESE Venues would not, or likely not, experience any negative
impact from the development or operation of that gaming establishment. In fact, the ESE
Venues are the exact type of live entertainment performance venues entitled to the protections afforded 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 a gaming license include the requirement that MGM "meet with...not-r-profit venues locqted in
the commonwealth to discuss a mitigation plan which may include, but shall not be limited to,

dgreements regarding event scheduling, promotons, tcket prces, marketng and other

operations which may impact the viability of such

...

not-for-profit entertainment venues. The

commission shll encourage the establishment of such a mitigaton plan throughfair and reasonable discussion." The mitigation agreement offered by MGM to ESE after ESE filed its

petition for designation as an ILEV, and the limited discussions MGM has had with ESE
concerning 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 MGM
provides the Commission with

a"foir and reasonable" signed agreement with

any impacted live

entertainment venue, MGM shall not be eligible to receive a gaming license.

The Opposition

MGM'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 and

information contained in the Opposition and related exhibits include acknowledgment that the
Venues are not-for-profit owned performance venues, designed in whole or in part for the presentation of live concerts, located approximately 2 miles from the MGM proposed gaming establishment, the Venues have capacities similar to the venues that will be associated with operation of the MGM gaming establishment, and that the live performances offered at the Venues will be similar to or the same as those that will be offered at the MGM venues. In that regard, the Opposition actually supports ESE's petition and a designation by the Commission
the Venues as an

of

ILEV.

The MGM Opposition is, however, also misleading, inaccurate and unfair. To begin

with, the test of the Opposition misrepresentsthe"Highlights" of the Cross-Marketing and NonCompetition Agreement attached as Exhibit A to the Opposition (the "Agreement") by failing to

indicate that each of the more substantive and significant covenants and obligations listed in the

Opposition 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 Section 1.1 of Exhibit A to the Opposition highlighting the language missing from the

of

"Highlights" listed in the text of the Opposition is attached this Response

Based upon

as

Attachment

1.

MGM's decision to initially ignore ESE and to later aggressively oppose its petition

for designation as an ILEV, ESE is understandably not at all comfortable with exercise by MGM of its sole discretion, purportedly reasonable or otherwise.

A further example of MGM's tactics and the unfair nature of the Agreement is MGM's
promise it"shall not enter into any agreement with any perrmer or sltow which, through a
radus restricton or otherwise, precludes perrmances by that perrmer or show at the

Venue." However, it must be noted that the terms of the Agreement also provide " [iJn the event

MGMfails to nclude such a radius restrction exempton in any contract or otherwise

inadvertently prohibits a performance in volation of [the AgreementJ, MGM shall grant a

waver to such visitng perrrner or show t the wrtten request of ESE' and"ESE shll not be enttled 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 provision

would essentially leave ESE in the position of having no effective means of confirming MGM's
compliance with the radius restriction covenant or any meaningful remedy in the event it were to
be 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, the impossible burden of determining MGM's compliance with the covenant would be on ESE and there

The Opposition also suggests fhat apetitioner must somehow "demonstrate a negative impact by a casino developmenl" in order to be designated an ILEV by the Commission. See

Opposition af p.7. There is no such burden or obligation required of

petitioner anywhere in the

Gaming Statute or regulations. That notwithstanding, the ESE petition, the Opposition, the

MGM Presentation and this Response when taken together provide overwhelming support for
determination by the Commission that the ESE Venues

will

experience, or are

likely to

experience, a negative impact from the development or operation of the proposed MGM gaming

establishment. In fact, the Opposition and the MGM Presentation taken alone acknowledge sufficient facts and provide ample other information, including the distance of the Venues from
the 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 to
experience, a negative impact from the development or operation of the proposed MGM gaming establishment.

In addition, the Opposition alleges that the only effects of the Venues being located
approximately 2 miles from the proposed MGM gaming establishment will be positive, and
suggests that those positive effects should be taken into consideration by the Commission

in

connection with its determination of whether the Venues should be designated an

even

ILEV. Again,

if in the very unlikely

event there was any positive impact on the Venues or ESE from the

operation of the gaming establishment, there is no statutory or regulatory support for the

Commission 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 substantial harm a result that breach.

Overall, in light of the preeminent role ESE plays in westem Massachusetts as a regional

economic driver and leader in live entertainment, MGM's conduct in initially opting to ignore
and now actively oppose ESE's designation as an

ILEV is regrettable. The ILEV Agreement

offered by MGM to ESE is unfair and unreasonable and, in offering such an agreement and
opposing ESE's petition for designation as an ILEV, MGM has failed to satisfu its obligations under the Gaming Statute and regulations for issuance of a gaming license.

Conclusion
On 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 hearing
scheduled for January 28,2014, ESE hereby respectfully requests the following:

1.

That the Commission designate the ESE Venues an ILEV; That pursuant to G.L. c. 23K
$

2.

17(b), the Commission take no further action on

MGM's application for an RFA-2 gaming license until MGM enters into a "fair and
reasonable" ILEV Agreement with ESE;

3. That in the event MGM fails to negotiate

an

ILEV agreement with ESE in good faith

that the MGM application for an RFA-2 gaming license be denied; and

4.

That the Commission take whatever other or further actions as may be necessary or

appropriate under the gaming statute and regulations.

[Sgnture on Followng PgeJ

Respectfu lly submitted,

EASTERN STATES EXPOSITION By Its Attorneys,

Mark D. Cress (BBO f552268) Bulkley, Richardson and Gelinas, LLP 1500 Mai Street, Ste. 2700 P.O. Box 15507 Springfield, MA 01.L1 5-5507 TeL (a13) 272-6255 Fax (413) 785,5060
mcress@bulkley.com

ATTACHMENT A

1..1.

MGM agrees to work in good faith with ESE to cross-market with and promote

the Venue as follows:

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

(a)

MGM will make tickets of the annual BIG E Fair at the Venue available for purchase online through the Project homepage, on-site at the Projecf and to MGM employees through the M Life Insider Employee portal or
similar in-house employee portal and channels. MGM will send targeted e-mails promoting events at the Venue as designated by ESE in accordance with Section 1.1(a) to M Life members in the Springfield and surrounding areas, the number and frequency of which shall be determined in MGM's reasonable discretion. MGM will promote events at the Venue designated in accordance 1.1(a) through its various social media channels (including Facebook and Twitter), the number and frequency of such social media posts shall be determined in MGM's reasonable discretion.

(b)

(c)

(d)

with Section

205

CMR: MASSACHUSETTS GAMING COMMISSION

205 CMR 126.00:

Section

IMPACTED LTVE ENTERTAINMENT VENUES

126.01: Determination of Impacted Live Entertainment Venues

I26.01

f)etermination of Imnacfed Live F,ntertainment Venues

(1) General. The following shall be an impacted live entertainment venue for purposes of M.G.L. c. 23K and 205 CMR:
(a) A venue located in the commonwealth that has executed an impacted live entertainment venue agreement with the applicant for a Category I or Category 2 license which agreement
was 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 live entertainment venue by the commission under M.G.L. c. 23K, $ 17(b), and 205 CMR 110.01(2) after the submission of an applicant's RFA-2 application upon written request by the venue for the venue to be designated an impacted live entertainment venue with respect
to the specific gaming establishment.

(2) Impacted Live Entertainment Venue Determination bv Commission. A venue seeking to be 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 the commission of the RFA-2 application for a gaming establishment for which the venue seeks to

will make a determination on the request at an open meeting at least 30 days prior to the public hearing on the application held pursuant to M.G.L. c. 23K, $ l7(c). In determining whether a venue will be designated as an impacted live entertainment venue, the commission shall ensure that the venue meets the definition of impacted live entertainment venue as set forth in M.G.L. c.23K, $ 2, and shall, in
be desigrrated an impacted live entertainment venue. The commission

accordance with M.G.L. c. 23K, $ 4(39), consider factors including, but not limited to, the venue's distance from the gaming establishment, venue capacity and the type of performances offered by that venue. Further, the commission will consider whether the applicant intends to include a geographic exclusivity clause in the contracts of entertainers at the proposed gaming establishment, or in some other way intends to limit the performance of entertiners within Massachusetts. Thecommission'sdeterminationwillbemadeafterareviewoftheentireRFA-2 application submitted by the applicant for a gaming license as well as any independent evaluations provided by either the venue or otherwise. Impacted Live Entertainment Venue Agreements. An applicant for a license for a gaming establishment shall negotiate an agreement with each venue determined by the commission to be an impacted live entertainment venue for their proposed gaming establishment. The applicant shall submit to the commission a signed agreernent with each impacted live entertainment venue to its proposed gaming establishment either as part of its RFA-2 application in accordance with M.G.L. c. 3K, $ 5(10) or the parties shall follow the protocol and procedure outlined in 20s cMR 126.01(4).

(3)

(4)

Negotiation of an impacted live entertainment venue Agreement after the applicant has submitted an RFA-2 application. Participation in Process. In accordance with M.G.L. c. 23K, $ 17(b), 205 CMR 126.01(4) provides the protocol and procedure for reaching a fair and reasonable impacted live entertainment venue agreement between the applicant and the venue. Upon being designated an impacted live entertainment venue by the commission in accordance with 205 CMR 126.01(2) the venue and the applicant shall be bound by this procedure. In the event the applicant shall fail or refuse to participate in the arbitration process set forth in 205 CMR 126.01(a)(c) with any venue determined to be an impacted live entertainment venue under 205 CMR 126.01(2), the commission may deny the applicant's RFA-2 application or condition the issuance of the license.

(a)

205

CMR: MASSACHUSETTS GAMING COMMISSION

126.01:. continued

2. In the event a venue designated an impacted live entertainment venue fails or refuses to participate in the arbitration process set forth in 205 CMR l2.01(4)(c), the
commission may deem the venue to have waived its designation as an impacted live entertainment venue. Provided, however, the commission may nevertheless impose as a condition on any a Category I or Category 2 license any requirements it deems appropriate for mitigation of negative impacts from the development or operation of a licensed gaming establishment. 3. An applicant or venue may petition the commission at any time for a finding that the other party has failed or refused to participate in the arbitration process set forth in 205 CMR 126.01(a)(c) and may request a remedy in accordance with 205 CMR 126.01(4)(a)r. or 2. (b) NeeotiatedAqreement. PursuanttoM.G.L. c.23K, $ l7(b),theapplicantshallnegotiate a signed agreernent with a venue within 30 days from the impacted live entertainment venue

designationbythecommissioninaccordancewith205CMR126.0l(2). Intheeventthatthe applicant and venue cannot reach an agreement within the 30 day period they shall commencethebindingarbitrationprocedureoutlinedin205CMRl26.0l(4)(c). Theparties, however, may engage in binding arbitration in accordance with 205 CMR 126.01(4)(c) at any time 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 live entertainment venue determination is made by the commission in accordance with 205 CMR 126.01(2). Provided, however, the parties must engage in this binding arbitration procedure if no impacted live entertainment venue agreement is filed with the commission within 30 days of the date the designation is made by the commission in accordance with 205 CMR 126.01(2). 2. The parties shall file with the commission a notice of intent to commence arbitration prior to selecting an arbitrator. 3. No later than five days after the passage of 30 days since the designation is made by the commission in accordance with 205 CMR 126.01(2) the parties shall select a neutral arbitrator and submit their best and final offer for an impacted live entertainment venue agreementpursuanttoM.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, independent arbitrator. [n the event that a third neutral, independent abitrator is not selected within the 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 all issues, including the final decision, by majority vote. 4. [n conjunction with the filing of its best and final offer submitted in accordance with 205 CMR 126.01(a)(c)3., the applicant shall submit a copy of the impacted live entertainment venue agreements, if an it has executed with other venues concerning the
applicant's proposed gaming establishment. Either parry may submit executed impacted live entertainment venue agreements from other proposed gaming establishments in the Commonwealth which the party considers relevant. 5. The reasonable fees and expenses of the single arbitrator shall be paid by the applicant. [n the event that three arbitrators are engaged, two thirds of the reasonable fees 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 CMR

126.01(4)(c)3., the arbitrator(s) shall conduct anynecessaryproceedings andfilewith the commission, and issue to the parties, a report speciffing the terms of the impacted live entertainment venue agreement between the applicant and the venue. In reaching the final decision, the arbitrator(s) shall select the best and final offer of one of the parties and incorporate those terms into the report. The arbitrator(s) may make adjustments to the best and final offer only if necessary to ensure that the report is consistent with

M.G.L. c.23K.

205

CMR: MASSACHUSETTS GAMING COMMISSION

126.01: continued

7. Nolaterthanfivedaysaftertheissuanceoftherortofthearbinator(s)asprovided
in 205 CMR 126.01(a)(c)6., the parties shall sign an impacted live.rntertainment venue agreement 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 betheimpactedlive entertainment venue agreement between the parties.

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

205

CMR: MASSACHUSETTS GAMING COMMISSION

NON-TEXTPAGE

From: "Mathis, Michael" (mmathisGmgmresorts.com<mailto:mmathisGmgmresorts.com>> Date: February 19, 201,4 aL 5:31:59 PM EST To: "Cassidy, Eugene" <ecassidyGthebige.com<mail-to:ecassidyGthebige.com>> Cc : " j if I . griffinG state . ma. us<mail-to : j i1 . grif finG state . ma. us)" <j ill . griffinGstate.ma. us<mailto: j iIf. griffinGstate.ma. us>> Subject: RE: Opening a dialogue
Gene,

Thank you for reaching out.

FoJ-J-owing yesterday's meeting, I have been working on a revised agreement with our team consistent with the Commission's direction, which I plan to get to you by end of day tomorrow for your review.

V'Iith respect to the various other points raised in your emaiJ-, I think it woufd be counterproductive for me to respond to any of them, other than to confirm your view that our agreement should not be one-sided. ff Ms. Griffin, Commission staff, or the Commissioners befieve it woufd be appropriate to discuss the history of our negotiations, I am happy to provide them that detai]. Otherwise, I believe yesterday's record, the consul-tant's findings, and the parties' obligations under the 1aw speak for themself.
PJ-ease feef free to contact me after you have reviewed our proposed agreement. f understand from comments you made in the press yesterday that you had some unspecified difficuty reaching our representatives in the past so please reach out directly to me in the future as you did in this instance.

f am available by ema1l and on my cell phone, and wif-l be in the Springfield area starting Wednesday of next week to meet in person if necessary.
Mike

mmathi

Michael Mathis President - MGM SpringfieJ-d 4882 Frank Sinatra Dr. I Las Vegas, Nevada 89158 Tel-: +I 102 590-5581 | Cel-l , +L 102 525-1100
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 PM To: Mathis, MichaelCc : j i11. griffinGstate.ma. us<mail-to : j i11. griffinGstate.ma. Subject: Opening a dialogue
Dear Michael-:

us>

T trust you are disappointed, as I am, with the outcome of yesterday's hearing before the I'm somewhat encouraged to once again hear that MGM intends to take advantage of the additionaf time al-l-owed by the Commission to try to reach an agreement, I do not believe it is accurate as suggested in today's newspaper that talks have been ongoing or that there has been meaningful discussion with regard to deveJ-oping a mutualy beneficial relationship between MGM and Eastern States Exposition. T and others responsibfe for protecting the interests of the Exposition are hopeful that wilf change over the coming week.
Gaming Commission. Even though

fn order to avoid confusion and in order for any discussions to be as productive possible, T believe it is -mportant for MGM to recognize the folowing:

as

1. Commissioner Crosby had it right when he described ILEV status as an "on-off switch"-you either are or aren't an ILEV. The Commission's consultant simply got it htrong when he suggested that the Exposition venues shoul-d only be considered an ILEV during the Big E fair and for some short period beforehand and afterward. The Exposition bel-ieves its venues fit precisely within the defj-nition of an ILEV under the gaming law and, without a fair and reasonable agreement with MGM, both the venues and the Exposition could no doubt suffer devastatingly negative impacts from the devefopment and operation of a casj-no in Springfield.

2. As an applicant for a casino license, MGM has an affirmative obligation under the l-aw to meet with the Exposition to discuss a fair and reasonable mitigation plan. In offering 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 has failed to satisfy its obligation j-n order to be awarded the only western Massachusetts casino l-icense.
? Regardless of whether we are abl-e to negotiate an acceptable agreement durinq the 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, if necessary. hle feel- that the.l-aw and the record are both on our side, and sincerely believe that the lssues invol-ved are critical enough to the short and long-term health of the institution to justify such action.

I hope you are able to understand and appreciate the spirit of this attempt to initiate an honest dialogue that wil-l- be mutually beneficial- to our respective organizations. I woul-d appreciate it lf you would fet me know when you are availabl-e to meet in the next severa.l- days and I wil-l- do my best to accommodate your schedul-e.
Thank you. Gene Cassidy

STATES EXPOSTTION s Prmier Exposition Cel-ebratinq Industry, Aqriculture and Education since 1916 The Big E! September 1-2 to 28, 2014 EUGENE J. CASSIDY, Executive Officer
Americar

EASTERN

CFE

President and Chief

1305
VEST

MEMOR]AL AVENUE SPRINGFIELD, MASSACHUSETTS O'1089

www.

413-7 31 -2443

find us at
copies.

Lhe-ige. conchttp: //www. thebige. com>

This e-mail transmission cntains information that is corfidential. If you are not the intended recipient please notify the sender immediately by return e-mail- and defete al-J"

-----Original- Message----From: Cassidy, Eugene Imailto:ecassidyGthebiqe.com] Sent: Saturday, February 22, 2014 3:23 PM To: Mathis, Michaef Cc: Cress, Mark; Nosal, Jed M. (JNosalGbrownrudnick.com); Nastasia, Martin T.; j ill- . grif f inGstate.ma. us,' Chase Donaf d R. ; Cassidy, Eugene Subject: Re: Proposed ESE Bl-ue Tarp Cross-Marketing Agreement It was nice to finally be abfe to tafk with you on the phone J-ast night. However, I find myself at a dj-fficut juncture working from an iphone in a church parking lot after a funeral- 85 mifes from my office, whife our attorney is on a long planned family ski trlp in Northern Maine: trying to craft an agreement between my organization and MGM. It simply cannot be accompfished by Monday.
That said, we must make progress so aftow this: ESE has long been the biggest most powerful five entertainment attraction j-n the region and I believe ESE can partner with MGM in a mutuafl-y beneficial way that hel-ps buil-d MGMrs business whil-e helping to protect and keep secure the business of ESE, a business which provides economic horsepower to the
REGON.

Greetings Mike.

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 and as 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 cosponsoring and co-promoting certain entertainment events that woul-d give MGM a vested interest in the success of those events. That vested interest would also decrease the

likefihood of negative impacts as a resuJ-t of competition from MGM for simifar acts in simil-ar venues, especially around the time of and during the Big E fair.

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 evermore-difficult quest to attract first rate entertainers. (You can al-so put us out of the entertainment business...and more.) V'le spoke about acts that cost $200k to $300k. Tn a partnersh-p agreement where MGM assists ESE to bring acts to the region, where we share as partners in the overhead and receipts, which coufd mean a subsidy that woufd be shared by both parties, or no subsidy at all depending upon success of the event. An agreement that paid attention to the need for advertizing silence to respect the business of the other 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 a far more productive arrangement for both parties compared to the pre, post and during Big E "bfackout" arrangement advocated by the Commission's consuftant.
VrIe

As I said in our board room at the Brooks Building in January "there is something to thj-s". But I need your attention, creative thj-nking, and secure interests in this organization. Neither me nor my board can p-ay fast or loose with this 100 year o1d institution that plays one of the top TEN most important rol-es in this region's economy.

We We

need MGM's support.

were forced to seek protective status because we received not one moment of attentions from 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 this region in the next 30 days to solidify a mutuafly beneficial agreement.
Thank you, partner.

Gene

Alf the best,

Gene

This message emanates from a hand hel-d device. Pfease forgive speling. punctuation and gramar issues as well as any perceived curtness. > On Feb 21, 2014, at 4:00 PM, I'Mathis, Michael" <mmathis@mgmresorts.com> 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 tomorrow while 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 grammar issues as wel-l as any perceived curtness.

and

> On Feb 21, 201"4, aL 2220 PM, "Mathis, Michael"

<mmathj- s Gmgmre
s

ort

s . com<mail-to : mmathi s Gmgmre

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s . com>>

wrot

Gene,

> If 3 p.m. doesn't work, I'11 try and stay flexibl-e this afternoon and even over the
weekend.

> 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, be

) Are you availabfe for a ca.l-l- at 3 p.m. EST today to discuss? For our side, it will myself, 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<mailto : j iJ-1. griffinGstate.ma. us>; > mcressGbulkley. com<mail-to:mcressGbulkley.com>; Nosal, Jed M. > ( JNosal- Gbrownrudni ck . com<mai Ito : JNosal- Gbrownrudnic k. com> ) ; > sns f it z geraldat l-aw. com<ma j-l-to : sns f it z geraldat law . com> > Subject: RE: Proposed ESE Blue Tarp Cross-Marketing Agreement
G G

) Dear Mike: > Thank you for your letter of February 20, 2014. It is an another expl-icit acknowl-edgment by MGM of what the Commissioners, their consuftants and common sense suggests--that unfess the Eastern States Exposition venues are protected, they will no doubt 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 be sufficient to support a determinatlon by the Commission that the Exposition venues are ILEVs and entitled to protection, regardless of what may be the l-imited events, the

timeframes involved, or the casino operation related venues from which such negative impacts emanate. Neither the Gaming Statute or regulations contain any minimum numbers of events or timeframe requirements, and there are no provisions that suggest the Commission should base its ILEV determination upon whether the 1ike1y negative impacts wil-l- resul-t from gaming refated entertainment operations conducted on casino owned property or other TLEVs. Considerlng the circumstances in question, one must necessariJ-y ask, what better time woud there be for MGM to aggressj-vely market its own entertainment events than when approximately 1.5 mil-l-ion people w1ll- be pJ-anning to travel to or be in the western Massachusetts region to attend the annual- Biq E fair? If even a smaff fraction of that population is enticed to attend MGM sponsored events hefd before, after or in l-ieu similar acts offered during the Big E, the negative impacts on the Exposition wlfl no doubt be devastating.

) Your letter afso asks the Commission to take certain action for which there 1s no authority whatsoever under either the Gaming Statute or reguJ-ations. Once there is a determination that there is or will- likely be a negative impact as a result of the development or operation of a gaming establishment and an ILEV determination has been made, MGM has an affirmative obligation under the statute and regulations in question to negotiate an agreement with the ILEV. In the evenL the parties are not abl-e to reach such an agreement, the regulations specifically provide a "protocol and procedure for reaching a fair and reasonabl-e impacted l-ive entertainment venue aqreement between the applicant and the venue." That specified protocol and procedure involves a decision

rendered by a neutral arbitrator or arbitrators in which MGM would be required to submit copies of all other ILEV agreements it has executed with other venues, as opposed to merely asserting those provisions of such other ILEV agreements that support its position. See 205 CMR 126. The protocol- and procedure specified in the regulations does not allow an applicant to pick and choose in its discretion what it deems acceptable in terms of an ILEV agreement and then submit that agreement to the Commission for endorsement as you and MGM have.

> An obvious illustration of why such an approach was not intended under the Gaming Statute and regulations and why it is neither fair nor reasonable, is MGM's attempt to both disregard the bel-j-ef expressed by the Commissioners and their consuftant that adequate protection of the annual Big E needs to extend for some period before and after the fair, whife al-so striping the agreement of any provisions intended to create a vested j-nterest in MGM that woufd encourage promotion rather than "poaching" of the Big E. For example, the protocof and arbitration process required under the gaming regulations woufd like1y encourage MGM to consider whether it makes more sense to co-promote and sponsor entertainment at and durj-ng the Big E, taking advantage of the tens of thousands of captive 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 an arrang'ement that woul-d aflow MGM to capitalize on the Big E crowds to its excl-usive advantage and to the detriment of the Exposition is both unfair and unreasonabfe. The position advocated by you woul-d place the Exposition in the position of being at the complete mercy of MGM. Based upon MGM's conduct to date, that is a position with which the Exposition is not at all- comfortable, and which it is prepared to take whatever action may be necessary to try to avoid.

> Finaly, and once again, the fast minute, "gun to the head" take it or l-eave lt approach MGM has efected to take cal-ls into the question the larger question of whether it should be considered eligibfe to be awarded the excfusive western Massachusetts gaming l-icense. Attempting to subvert the explicitJ-y required protocol and procedures under the gaming regulations in order to avoid its affirmative obligations under the ILEV provisions of the gaming legislation is indicative of the type conduct l-ikely to continue under 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 of a fair and reasonabl-e ILEV arrangement. I woul-d al-so ask that you join me in requesting that Ms. Griffin make both the MGM proposal and this response part of the Commissionts record and avaifabl-e to the Commissioners for consideration prior to Monday's meeting in the 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, > 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<http: / /www.thebige.com>
copies.

CFE

> This e-mail- transmission contains information that is confidential. If you are not the intended recipient please notify the sender immediatety by return e-mail- and delete afI
4

> Frorn: Mathis, Michael fmailto:mrnathismqmresorts. com] ) Sent: Thursday, February 20, 201,4 6:22 PM > To: Cassidy, Eugene ) Cc : j ill . griffinGstate.ma. us<rnailto : j ill . griffinGstate. ma. us>; ) mcressGbulkley. com(mail-t.o:mcressGbulkley. com>; Nosal,Jed M. > ( JNosalbrownrudnick. com<naj-lto : JNosal-Gbrownrudnick. com>) ; > sns f it zgeraldat law. com{mai l-t o : sns f it z geraldatlaw. com> > Subject: Proposed ESE BJ.ue Tarp Cross-Marketing Agreement.
G G

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.
am sur'e

> T,ike you, f am l-ooking' forward to resolvinE this matter, and working together on what f 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>

> <image001.jpg>

MGMG;il SPRINGFI ELD

VIA EMAIL: ecassidy@thebige.com
February 20,2014
Eugene J. Cassidy, CFE Eastern States Exposition President and Chief Financial Officer 1305 Memorial Avenue West Springfield, Massachusetts 1 0089

Re:

The Bie E/MGM Snrinefield Cross-Marketine Asreement

Dear Mr. Cassidy:

This letter agreement (this "Agreement") will set forth the commitment of Blue Tarp reDevelopment, LLC, as the applicant for the Western Massachusetts Region B Category 1 MGM Springfield gaming license ("MGM"), to cross-market and otherwise support the Big E fair held annually on the Eastern States Exposition grounds in West Springfield, MA (the "Big Eo'), in accordance with the terms of the attached executed Cross-Marketing and NonCompetition Agreement (the "Executed Offer"). This Agreement is intended by MGM to be a binding and enforceable commitment, which (i) the Eastern States Exposition ("ESE"), as the owners of the Big E, can rely upon in voluntarily withdrawing its petition for Impacted Live Entertainment Venue ("ILEV") designation (the "Petition") or (ii) the Massachusetts Gaming Commission ("Commission") can rely upon as binding on MGM should it deny ESE's Petition and should MGM be fortunate enough to be awarded a category 1 gaming license and open the proposed gaming establishment.
My understanding from viewing the Commission hearing this past Tuesday morning was that at least certain of the Commissioners did not view the Big E as an impacted live entertainment venue and concluded that any concerns that the Big E might experience negative impact from MGM's proposed development were addressed through the commitments MGM made in the draft 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 whether MGM's offer was enforceable.
We also appreciate what we interpreted to be Commissioners Zuntga and Cameron's comments related to the benefit MGM is bringing to the MassMutual Center, Symphony Hall and City Stage through commitments to sponsor concerts and events at those venues rather than compete directly with them. Within the context of the ILEV determinations, this is another reason why we believe the Big E's Petition is misguided. Under statute, ILEV designation requires that there be 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 Office
1441 Main Sueet' Suite 137 Springfield, M,4,01103 413-735-3000

MGM G SPRINGFI ELD

Eugene J. Cassidy, CFE Page2 of 4 establishment, and not competitive impact from a company's support of other local venues, an objective the Gaming Act clearly encourages.

MGM is not asking ESE to accept our interpretation of the Commission's recent hearing nor the operative statutory and regulatory framework. We are simply providing context for our position and the reason why we have executed our offer, which even absent ESE's countersignature, we intend to be enforceable subject to the two conditions set forth above. MGM believes that the Executed Offer alleviates any potential argument that the Big E is likely to experience a negative impact with respect to the presentation of live concerts, comedy or theatrical performances during the period of the Big E. We understand that ESE is seeking certain financial and other commercial commitments that benefit the Big E and the ESE's organization more broadly and are willing to have that dialogue in the appropriate context. We do not believe, however, that ESE can or should use the ILEV process for a business negotiation that is outside the scope of and irrelevant to the ILEV component of the Gaming Act. We hope and expect that the
Commission shares our view. Discussed further below are the essential terms to which MGM is and is not willing to commit in this 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 into any agreement with any performer that would prevent that performer from performing at ESE's venues. Further, in that section, MGM has committed not to book any ticketed performance at the Project or the Springfreld Sites during the 17-day period of the Big E (the "Restricted Period"). The lanzuage in that section is verbatim what was requested by the Big E in its last revision. During Tuesday's Commission hearing, Mr. Hall of HLT Advisory stated that he believed that the above the Restricted Period should extend to 45 days before the Big E event and 30 days following, though I believe based on the nature of the discussion, he was not intending to be very precise 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 only reasonably 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 venues beyond 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 or Commission regulations and that would contradict the positive impact MGM would bring to
MGM Springfield Community Ofce 1441 M^1n Steet' Suite 137 Springfield, M,\ 01103
473-735-3000

MGMG) SPRINGFI EIo

Eugene J. Cassidy, CFE
Page 3

of4

local venues. Third, we believe that the Commonwealth would be harmed by an over broad restriction, and that the goals of the Gaming Act would be frustrated to the extent that MGM was not able to utilize entertinment for a 3 month period to drive tourism and visition, which is a major 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 findings on 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 obligations commence with the opening of the project, the lanzuaee in those subsections is verbatim what was requested bl the Big E in its last revision. MGM, however, did not include ESE's proposed subsections 1 . 1(e) - (, as further noted below.

All other terms of the Executed Offer are self-explanatory and we believe consistent with the Commission's direction to incorporate the "Page 10 and 11" recommendations from HLT's
report.

B.

Terms Requested by ESE that MGM did not Accept

The Executed Offer which MGM has attached to this Agreement is based on the last version of the cross-marketing and non-competition agreement requested by ESE, as revised by ESE, with the exception of the following terms, which MGM has rejected. Section
1.1

lel MGM will oenrt the rne of M-Life ooints to oruchase admissions to the arrrrral eig E ftir. fi UCttl witt pLovie glo noiecr to f Sf ins r fn
UCtU an

fSf

wiU c

the motor coach indrmtrv on a vear u'ourcl basis.

MGM Springfield Community Office

1,441, ]lai.

Sueet' Suite 137

Springfield, M.4,01103 413-735-30m

MGM G SPRINGFI ELD 0l r9

\lzr

r:,l

Eugene J. Cassidy, CFE

Page 3

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Section 1.2

(a) tCtvt wilt on anannut Uas feanue entetaintnent ol mmt the amual giq E fai. UCtvt comections witnin tne ellter and ESLEcsents:
lvtCtvl witt spousoL an teanue entenainnent or at a munutlv ageed lroo nd talet will be rtually witnU tne entemainuent n

fUt

hope the tenns of the Executed Offer are acceptable and that you will countersigu that document and feel comfortable withdrawing the Petition. If not, it was important for MGM to
demonstrate that we made every reasonable attempt to comply with the guidance the Commission provided in Tuesday's hearing, and will leave ESE to do the same, in advance of their ruling.
Sincerely,

/r,t'/*(7L2,Michael Mathis
President and Chief Operating Officer Attachments: MGM's Executed Offer to ESE, dated 2-20-14 MGM's Executed Offer to ESE, dated 2-20-14 (redlined against ESE's Revised Offer to MGM, dated l-22-I4

MGM's l-17-14 offer)

cc:

Jill Griffin Mark Cress, Esq. Jed Nosal, Esq. Seth Stratton, Esq.
MGM Springfield Community Office
1141

Main Sueet' Suite 137 Spriqeld, MA 01103

413-735-3000