King Of Clubs

In an industry where the deck is stacked against success, Patrick Lyons keeps drawing a full house.
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Two men stepped from a cab and approached the entrance to Danceteria, a new-wave, New York nightclub. You could make this pair a mile away. A couple of well-groomed, well-heeled professionals in blue blazers and expensive running shoes looking for a hot time in lower Manhattan. It was nearly midnight and the street action was anemic. Even so, a burly fellow stopped them on the sidewalk and tightened his grip on the red velvet rope separating the two from the front door.

"Sorry," said the doorman, his sorrow edged with sarcasm, "but it's club policy not to let in gentlemen unless they're accompanied by ladies."

Satisfied to leave matters there, the doorman silently stood his ground, a hulking defender of the moral order and upholder of whatever higher principle keeps two paying customers out of a cash business on a so-so Tuesday night.

The taller of the two men, no featherweight himself, unbuttoned his blazer and squared a pair of red-rimmed Clark Kent glasses on the bridge of his nose. "I see," said Patrick Lyons, who knows a thing or two about getting into hot clubs. "It's just that, well, we're from out of town and we heard this place was really smoking. Thought we'd check it out."

Awaiting a response, Lyons let his eyes do a CAT scan on the doorway patrol. Something more than a waltz around the dance floor was on his mind. At age 29, Lyons is president of That's Entertainment Inc., a 240-employee, $6-million-a-year, Boston-based entertainment empire built around Metro and Spit, two clubs catering heavily to the Hub's hard rock, new-wave, neo-disco, drinking crowd. Clubs of this trendy ilk have a life expectancy of about six months; Lyons's are four years old and still attracting some 10,000 customers a week. More impressive, they remain at the forefront of the new music/dance bar/video explosion, a highly precarious niche in a notoriously volatile industry. One of the ways Lyons keeps them there is by checking up on his competition in other cities. Another is by keeping customers he has doubts about waiting on the sidewalk.

"Sorry," repeated Danceteria's sentry. "Club policy."

"Sure," said Lyons, eyeing the rope with an air of sweet innocence. "No problem. We understand." He did not move a muscle. "We didn't know the rules."

At that moment, a different voice spoke from the doorway.

"What townya from?" it asked.

"Boston."

"Boston, huh?" The man to whom the voice belonged -- even a tourist could have pegged him for the owner or manager -- tilted back in his chair and chewed on a matchstick. "Yankees lost tonight. Those guys are jokes."

"They'll still give the Sox plenty of trouble," Lyons said, knee pressed to velvet."Always do."

His remark triggered a brief exchange of opinion about the American League East, a useful cultural reference point for undercover field scientists. By the time all possible playoff options had been explored, both visitors, still unescorted, were through the gate and on their way upstairs.

The higher they climbed, the deeper they descended into the maelstrom of raw punk culture. On level two, where the music sounded like the start of the Indy 500, and the old warehouse walls looked like gigantic Day-Glo Rothko canvases, they stopped for a drink. Lyons was already hardatwork.

"Bartender just stole three dollars," he reported after his first pass at the bar. His companion, momentarily distracted by another female bartender wearing a brunette Mohawk hairdo, had failed to witness the crime. Impressed, he asked Lyons how he'd spotted the theft.

"Simple," he said. "I ordered one scotch and one beer. She charged me $5.75 and rang up $2.75." He frowned. "If that happened once it'll happen 30 times tonight. That's why I'd use polygraphs on my bartenders. And spotters." He offered his friend the beer. "The problem is, if one guy steals from you, the others notice. And if he gets away with it, they all figure, what the hell, I'll steal, too. Pretty soon you've lost more than your profit margin. You've lost the respect of your employees."

He turned back to the dance floor, where two T-shirted men with matching neck chains writhed away in a corner nearby. Foreheads bumping, legs akimbo, they pirouetted around each another like a pair of Hopi tribesmen praying to the gods to deliver a bountiful corn crop. Lyons studied them impassively, almost clinically, as if by measuring the narrow spaces between them he could draw a bead on the energy binding the whole dance floor together. He took a token sip of scotch and set down his glass. "They play good music here," he said, then added, "very progressive. Radical, almost. We should be doing more of that at Spit." He fell silent while his companion made a note of that.

"But I hate the sound system," he muttered, suddenly reanimated. "Notice how it bulges in the mid-range tones but the rest is flat? A muddy mix like that'll drive you nuts if you listen to it for more than a few hours." He grimaced. "Otherwise, I like this place. The look works, the people are hopping. I'd call this a very together operation."

He and his cohort hung around for another 15 minutes, then left with considerably more haste than they had arrived. When the evening ended, somewhere in the vicinity of 4 a.m., they had managed to case four dance bars and a comedy club, grill three cabbies on Manhattan's latest hot spots, sample a Lower East Side restaurant and an Upper East Side bar, and pay an obligatory visit to that celebrated citadel of chic, Studio 54. At Heartbreak, the third club they invaded, a woman passed around address cards for the club's mailing list. Both men dutifully filled theirs out.

"What did you put down for 'occupation'?" Lyons asked his companion.

"Journalist. You?"

"Anthropologist."

Living in the village by night as well as by day and for long uninterrupted months, the field anthropologist witnesses thousands of small events which never would have become visible, let alone intelligible, at a greater distance.

-- Margaret Mead, Letters from the Field 1925-1975

If, as Patrick Lyons believes, the art of successful club management is providing quality customer service, and providing it with consistency and novelty, then it is easy to understand his need to stay close to his customers. Lyons's office, a cozy retreat filled with audio-video gadgetry and framed testimonials from the Boston media, sits atop the Metro-Spit complex on Lansdowne Street, a mere home run over the centerfield wall from Fenway Park. (His two other Boston clubs -- The Paradise, a concert-and-dance bar; and Stitches, a comedy cabaret -- are located at the other end of the Boston University campus, about a mile away. A fifth club, Metro Central, opened in Worcester, Mass., in September.)

As offices go, it is an unpretentious and hospitable place, the kind of inner sanctum where a beer distributor, a disc jockey, a record company executive, and an investment banker can sit down together, as they occasionally do, and not feel mutually ill at ease. For Lyons, this little aerie is also an ideal vantage point for studying the youth culture that consumes what his clubs have to sell. What they sell, in no particular order, are liquor, entertainment, security, snob appeal, and, most ephemeral of all, a sense of excitement and fantasy, of belonging to something that is happening.

Liquor and entertainment are not exclusive commodities, certainly not in a city with a college-age population the size of Boston's -- roughly 300,000; nor are music clubs, of which there are some 25 within a five-mile radius. But the other factors, the ones that have allowed his clubs to transcend the whims of the marketplace, don't come in a bottle, a manual, or on a video-disc. They are part of the complex chemistry between an audience and an auditorium, elements of an overall concept that must be invented -- and reinvented -- out of the thousands of small events that indicate where the hip group will turn up tomorrow night to reassert its tribal identity.

"To be an effective entertainment vendor," Lyons has said, "you've got to be a compulsive entertainment consumer." To this end, he hungrily digests magazines, newspapers, Arbitron ratings, record charts, radio playlists, films, TV shows, live music, and the currents of local politics. He will go across town or across the country to catch an act or a club with the right reputation. Before opening Spit, Boston's first true punk palace, in 1980, he spent months checking out the new-wave phenomenon and its commercial potential -- and then more months convincing his more conservative investors that there was real money to be made from a subculture whose idea of an evening's revelry might be burning down their parents' garage.

Lyons even studies airports, "because they give me ideas on how to move masses of people around comfortably and efficiently." And he is not shy about asking questions. Of anyone, about anything. Ed Sparks, a close business associate, once likened Lyons's insatiable curiosity to his seven-year old son's. "Patrick doesn't know enough to bluff," said Sparks. "When he sits down with his legal and financial advisers, he questions everything. He never nods his head and says yeah, yeah, yeah. He wants to know."

Beyond anything else, what Lyons most wants to know is what his clubs will need to look and sound like tomorrow and who will be patronizing them. Because -- and do not underestimate the rarity of this -- he knows they will be there tomorrow.

"The further away I get from being a 20-year-old myself," he admits somewhat ruefully, "the harder it is to keep my ear to the tracks. When I first got into this business I used to lie about my age. Now I find myself balancing my interests between the accountant in the three-piece Brooks Brothers suit and the 20-year-old kid from the suburbs who has $10 in his pocket and wants to spend it on one great night out a week. If that kid isn't satisfied -- if the music sounds old, or his drink is too weak, or the video's repetitious, or the bathrooms are dirty, or the last time he came in there was a fistfight on the dance floor -- then what my accountant wants doesn't matter. So I talk to that kid. I ask him what he likes. Or doesn't like. Does his drink have enough ice? Too much? Was the doorman polite? Is the crowd good tonight? Is the energy level high? I don't go down to my clubs in the evening just to stand around looking cool. I'm there to learn. Because once you stop caring about all the little details, your business starts dying.

Back in Boston one summer's afternoon, Lyons is sitting at lunch discussing the relative health of his business and yet how difficult it is in such a youth-oriented industry to be both a savvy marketeer and a resourceful manager of personnel. A case in point: Sunday nights at Spit, which are advertised gay nights.

Gay nights at Spit are an institution now, but when the club first opened under his aegis, Lyons might as well have booked Anita Bryant as mistress of ceremonies for all the gay business he was promised. The reason? In its previous incarnation, the club had operated exclusively as a gay bar, or at least until its onetime owner -- a gay man himself -- had publicly suggested that his brothers take a swift hike down Lansdowne Street. Determined to recapture that lucrative market, Lyons drew up a plan and sent out an open letter to the gay community. His message: bad situation then, new situation now; this is what we propose, and this is what we will deliver -- no cover, no hassles, low-priced drinks. The result was 300 customers the first week, 600 the second, full capacity in five weeks, four years of sellouts since.

Lyons, who had been up past three the night before hosting a movie-premiere party at Metro, looked as though what he most wanted to manage at the moment was a decent nap. Such are the rigors of nightclub management. Living in the village by night as well as day, and for long uninterrupted months, has proven enough to finish off more than one would-be entertainment mogul who flashdanced himself right out of the fast lane and into commercial oblivion. Lyons will admit to a nodding acquaintance with the wilder side of life -- "We were all younger and crazier once," he explains succinctly -- but says diet, regular exercise, and delegating authority are the tools of his salvation. If so, he owes much to his younger brother, John, whom Patrick benevolently calls "the knees of my operation."

John has assumed most of the company's daily managerial chores, including disbursal of an annual payroll of about $500,000, and virtually all the hiring. This, in turn, has freed Patrick to concentrate on special events, new ventures, and the intended expansion of Metro's resources into such areas as satellite teleconferencing. Like John, who is 27, most of Lyons's middle-management team is young (average age: 24), experienced, loyal, imaginative, and protective of the man at the top. On this day, John would have had his brother working up a therapeutic sweat on the basketball court; instead, he was now wrestling with the knotty problem of defining his managerial functions. A bit bleary-eyed, Lyons reached across the table and seized a notepad.

"Look," he said earnestly, "it all begins with creating a fantasy," and he emblazoned CREATE A FANTASY FOR AN INDIVIDUAL across the page in capital letters. "Some people go to clubs to drink. Some go there to dance. Some like the music, some are looking for a little companionship. Some are gay, some are straight, some are punk, some are preppy. But they all basically want the same thing: to believe in the fantasy. And the fantasy is that for the three or four hours he or she is in that club, he's king of the world. Period."

He bowed his head and resumed scribbling. When he passed the notepad back it contained two columns labeled "artistic and "management." Under the former he had listed "creative/design/concept"; under the latter, "execution/control/management." He tapped the tip of his pen on the dividing line.

"Here's the key to the whole scheme, where these two cross. I used to exercise total control over all these functions. But as we grow bigger, I realize I can't possibly maintain the level of hands-on management I used to. That's why I'm bringing in more specialists, and young ones, too. I've got college interns doing video production work for me at Metro that's at a technical level they couldn't touch for years in most businesses. Why? Because they're part of the audience we want to reach, and if we waited until they were old enough to have the technical expertise, they wouldn't be part of that audience anymore. They'll make mistakes, but I want them to make mistakes.

"I took all my managers to Barbados for a week last winter. We had a great time, but in no way was it just a holiday. Every morning from 8 until 11 we held full staff meetings. My people had to deliver detailed reports on everything from liquor-inventory control to gay theme parties. By the end of the week we'd written a 40-page game plan covering everything we wanted to accomplish in the coming year. You think that's normal in our business?"

Lyons got into this business as one normally does: by frequenting a bar himself, back in his hometown of Buffalo. Then he grew up, the third of four boys, while his mother, Lou, an Italian barmaid, struggled to keep the family afloat. Lou's husband walked out when Patrick was four years old, and he has not advertised his whereabouts since. His absence created "some pretty desperate times" for the five of them, but never a sense of hopelessness. Like his brothers, Patrick worked after school and on weekends to help his mother out.

"When you've been down in the dirt and pulled yourself out," he says matter-of-factly, "it only strengthens your resolve not to fall back in the dirt again."

Patrick was industrious, and Patrick was precocious. At 16, "the only Italian kid in a Polish school," he wasn't much of a drinker, but he was a fanatic for Foosball, a popular table soccer game, and Uncle Sam's, a local bar, had the best table around. Uncle Sam's also happened to be part of a chain of clubs owned by American Avents Corp., a Cincinnati-based company founded in 1969 by brothers Dick and Jim Fraser. Avents's management-minded style would soon play a pivotal role in teaching Lyons the brothers' scientific method of running nightclubs. First, however, they hired him on as a bartender. When that proved a rousing success, they started moving him up the ranks.

Within two years, Lyons was in charge of the entire Buffalo operation, after which came similar assignments in Detroit and Minneapolis. Each city, like each situation, had its own individual challenges. In Detroit, the challenge was to bring law and order to a club where armed floormen carried brass knuckles and blackjacks to confront gangs of roving thugs. In Minneapolis, it was to take a club losing $100,000 a year and not only turn its profit sheet around but fight off a unionization drive by disgruntled employees as well. In each instance -- and all since -- Lyons's basic strategy was to come in with fresh eyes and question everything. In this, both his training and his temperament served him well. Having worked every function himself from coat check to bouncer, and being of the inquisitive nature that no doubt had him enter this world asking his mother's obstetrician where he got his forceps and who did the lighting in the delivery room, Lyons was able to take Avents's manager's manual and do a deep dissection of each operation. He explains the process thusly:

"You start, of course, by taking the business seriously and questioning the basics: your location, club capacity, et cetera. Then, if you're satisfied, you examine the entertainment -- live music, recorded, video, atmosphere, effect lighting, special events, promotion.

"Okay. Now, when you've audited all these functions and set goals in each area for the staff to achieve, you look at operations. Is the staff capable of reaching those goals? Are they friendly? Do they care about the customers? Are they honest? Can they manage inventories properly? Okay. Last, if you're convinced you've got a good product and a capable staff, you look at your controls. How's employee turnover? If it's 25%, can you get it down to 15? Or 10? What's your cost of goods versus your percentage of labor cost? I realize this stuff sounds incredibly basic, but in the club business it really is not. People open clubs by creating their own fantasy, throwing open the doors, and charging what they think the market will bear. But most of the time the only fantasy being fulfilled is the owner's own ego. Or everyone's focused strictly on the bottom line, and that's just as deadly."

Lyons's own vision was remarkable. Still just 20 years old, he had overhauled Uncle Sam's in Minneapolis to the point that within 15 months it was turning a $150,000 annualized profit. Such heroics with the bottom line did not, of course, go unnoticed. At an age when he might otherwise have been entering his senior year in college, Lyons was moving quickly up the managerial ladder at Avents, which was not the only company watching the young protege with intense interest. In 1976, Avents dispatched him to the East Coast to manage Uncle Sam's in Nantasket Beach, Mass. Shortly thereafter, Lyons got hired away ("they chased me until I caught them") by a rival outfit, Beta Corp. of New York, to manage two of their clubs, New York -- New York and Boston-Boston. Lyons's move into the New York arena in 1977 was both fortuitous and frustrating for him. Studio 54, then in its infancy, was already making international celebrities out of its clientele (and vice versa), and no club got the sustained media attention -- and long customer lines -- that Steve Rubell's did. Still, Lyons's success with New York-New York convinced a lot of people, including himself, that he could compete at any level of the nightclub game. "I went from seagulls to limousines," he says, "and from a nightspot in Nantasket to a club in midtown Manhattan where they charged $20 just to get through the door."

New York City, that anthropologist's Eden, where herd instinct and the cult of the media can make or break a dance club in a matter of weeks, sharpened Lyons's forensic skills. Boston, however, appealed, more to his heart, and he longed for a chance to resettle there. He created that chance for himself by engineering the sale of Boston-Boston from Beta back to Avents, his old employer. Avents bought the club on the express condition that Lyons manage it. The company also agreed to fund the creation of Spit, located next to Boston-Boston (now Metro), which Lyons calls the first real club of my own design. My statement." Spit spawned four franchised clones, all owned by Avents, in a matter of months. By 1980, still operating happily out of the Hub, Lyons assumed regional management duties for four clubs (in Detroit, Buffalo, New York, and Boston) averaging 75 employees, 15,000 square feet, 1,500-customer capacity, and three on-site managers apiece.

By this point, Lyons had made all the moves essential to securing his Boston clubs' prosperity. He had established a tight working relationship with Don Law, the city's top rock promoter and one of the more reputable ones in the country; Law's expertise at booking live talent into the clubs enhanced Lyons's cachet, much as Lyons's finicky attention to detail created an environment conducive to establishing the acts Law wanted recognized. Lyons had brought in his brother John, who had management experience with Avents in four midwestern clubs (none under Patrick) and knew how to run everything from the door to the till. He had courted the press on both a professional and a personal level (several of his closest friends, in fact, are local journalists), thereby satisfying both the need to keep his clubs in the public eye and his own appetite for backstage gossip and emerging-trend spotting. He knew the local acts, the local promo people, and the local celebrities, all of whom felt welcome at Metro and Spit. And he had implemented tight systems controls across the board: on hiring, employee conduct (each new employee reads, and signs, a 48-page handbook), security, accounting, and quality control. Lyons seemed to have it all: a six-figure salary, friends in high places, and a flair for keeping his clubs looking fresh and alive. What he didn't have was a club of his own.

Avents solved that problem by putting its whole nightclub chain up for sale later that year. Lyons was panicked. "I got real nervous about who might buy it," he says. "Hell, I had eight years invested in the business, and I knew if the new owner didn't give me the authority to do the clubs the way I saw fit, I'd go crazy. So I started running around to everyone I could, looking for money to buy it myself. It nearly burned me out." No wonder. Lyons had $5,000 in assets to offer as equity; Avents's asking price was $3.5 million. For six frantic months, he and Ed Sparks scoured the local landscape for capital. Lyons had met Sparks, a certified public accountant, down in Nantasket when he was looking for someone to do his taxes, and Sparks was familiar enough with the ways of Brahmin Boston finance to know the odds against the two of them, their only tangible assets being the clubs' liquor licenses and Lyons's own managerial good will. That was not enough to buy the whole chain, but it was enough to pry away the Boston clubs when Avents later consented to sell their properties off piecemeal. A consortium of investors led by Lyons, Law, and Sparks (who had just put Energy Exchange Corp., a tax-free, oil-and-gas properties exchange, through a $300-million public offering) bought the clubs and reincorporated as That's Entertainment Inc. In return for his controlling position ("a complex equity arrangement," he calls it), Lyons promised investors a three-year payback plan (the debentures were covered in 13 months) and monthly profit-and-loss statements. To underscore the seriousness of his commitment, he hired the Big Eight accounting firm of Arthur Young & Co. to oversee the books and retained Brown, Rudnick, Freed & Gesmer, a venerable Boston law group, as legal counsel. It was in the offices of Brown, Rudnick, in fact, that the clubs' sale was consummated in a nail-biting flurry of last-minute financing. There was no doubt in most observers' minds about who or what had attracted that financing in the first place.

"We weren't investing in a nightclub," says Ed Sparks. "We were investing in Patrick."

Today, 20% of Lyons's business comes from hosting private parties and other special events -- none more special than the Harvard 25th class reunion bash at Metro/Spit. On a warm night in June, Lyons beams as the long row of buses pulls in from the Boston Pops -- Harvard '58 concert at Symphony Hall. Inside the club, video director Joe Verange and company have added some special touches to the $500,000 worth of state-of-the-art hardware at their command. Programmed to go along with a night of late-'50s dance music is a video show featuring such period fare as Leave it to Beaver intercut with shots from the 1958 Harvard class yearbook. Lyons, cooly preppy in blue blazer and rep tie, mingles easily with the cream of Ivy League achievers. Although they might not appreciate the strange social flow that has carried them from Harvard Yard to Symphony Hall to Spit, they aren't about to ignore the good times, either. The place, as they say, is hopping.

Standing on the sidewalk in the shadow of Fenway, john Spooner, Harvard graduate, author, stockbroker, and one of Lyons's elosest liaisons to the Boston business establishment, reminisces. "First time I met Patrick," he says, "all he could talk about was enrolling in the Harvard Business School. The B-school was the green light at the end of the dock for him.

"This will sound corny," he adds, "but people around here see in Patrick what I like to think of as 'America,' in the best sense. I'm talking about a poor kid who never went to college and who now stands to make an absolute fortune, and without screwing anybody in the process, either. He's the one person I know with desperate ambition whom I genuinely like. You know [the book] What Makes Sammy Run.? Patrick is an uncynical Sammy."

Spooner and Lyons make curious soul mates. One is Harvard trained, the other learned his craft on the job and in the streets. Yet when they first sat down to talk, they took to one another instantly. Part of their affinity lies in the fact that both men are great traders in information as well as commerce. Lyons is always quick to cite his preeminent position in what he calls the Boston Matrix: the network of radio stations, press and electronic media, retailers, advertising agencies, record stores, and power people who in large measure set the cultural and commercial agenda for Boston's under-30 set. Spooner moves in overlapping and highly useful circles of his own. In handling more than 3,000 clients at his Shearson/American Express Inc. office -- clients ranging "from cab drivers to company presidents" -- he brokers their talents to one another as adroitly as he manages their portfolios. And Spooner clearly thinks that Lyons -- friend, client, confidante -- is major talent.

"If Patrick is a genius as a manager," he avers, "it's in his ability to delegate authority to people he can trust. And I mean really trust, right down to the smallest detail. If you're his plumber, you're responsible for all his plumbing -- until the pipes burst and flood him out. Same for his electrician, interior designer, accountant, attorney, whatever. His people would walk through walls for him."

Lyons, in turn, confesses he has learned much from Spooner about operating what he calls "the Rolodex of the mind."

"John's taught me how to profit from a wide range of contacts," he says. "I like having lines out. As a matter of fact, I like having favors owed me much more than I like owing other people. It's not a material thing. I live well, but money isn't my motivator. If it was, I wouldn't be turning 500 people away from Metro on a Friday night."

He returns to the party and his role as Harvard host. Inside are several hundred men and women who, now in their mid-40s, are fulfilling the promise their bright educations brought them. Lyons has a promise he wants to fulfill, too: to be running a $50-million entertainment empire by the time he is 35. For this night, anyway, each of them is living the same fantasy. Tonight, each one is king of the world.

Last updated: Oct 1, 1983




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