Atlanta's F&B Pricing Revolution
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AUGUST/SEPTEMBER 2018 NO.244 HOW THE ‘PEOPLE’S ITALY’S GAMBLING AD MILWAUKEE BUCKS’ NEW FAMOUS RACECOURSE CLUB’ CONCEPT DRIVES BAN THREATENS SERIE A ARENA TURNS TEAM INTO DIVES INTO DATA TO EVERTON’S TICKETING CLUB REVENUES REAL-ESTATE COMPANY DOUBLE DINING INCOME Page 14 Page 22 Page 32 Page 53 HOW A $2 HOT DOG MADE FANS FALL IN LOVE WITH THE MERCEDES-BENZ STADIUM: Atlanta’s F&B pricing revolution [ PAGE 5] CONTENTS August/September 2018 | Issue no. 244 Falcons Opinion Everton Atlanta’s F&B The VAR Ticketing and pricing revolution opportunity community 10 Sponsorship The impact of Italy’s 14 gambling ban US Major 5 Leagues Keeping audiences hooked Formula One xxxGetting closer with FanFests 19 22 25 Bucks SportBusiness Summit preview Ascot 53 All about our Data-driven dining inaugural event 32 35 ESP Properties International Is Sorrell’s IMG Champions Cup dream dead? 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Application hostcity.com/events/host-city for permission for use of copyright material including permission to reproduce extracts in other published works shall be made to the publishers. Full acknowledgement of author, publisher and source must be given. ISSN 1757-5346. 4 www.sportbusiness.com | @SportBusiness ATLANTA FALCONS ATLANTA Falcons’ concession-pricing trades small revenue loss for major goodwill gains NFL franchise has reaped Mercedes-Benz Stadium Sports teams from US, Europe reward of slashing food and drink infrastructure essential to deal and China considering following prices at new stadium with increase in volume of sales suit – as are cinema chains (Atlanta Falcons) Bob Williams from their fans. As stadium concessions Atlanta United – which also plays at the revenue is a fraction of income for NFL Mercedes-Benz Stadium – were rated hen the Atlanta Falcons teams, it was a low-risk, high-reward number one in all food and beverage announced their ‘fan-first’ strategy. categories: quality, variety, speed of food pricing ahead of their As it happens, the unexpectedly large service and price-to-value ratio. For move to the Mercedes- 53-per-cent increase in volume meant their last two years at the Georgia WBenz Stadium in 2017, the NFL franchise revenues fell only seven per cent in year Dome, by contrast, the Falcons ranked immediately revolutionized the stadium one at the Mercedes-Benz Stadium. 18th overall. concessions model. With $2 (€1.70) The move brought supplementary “In the grand, grand scheme of things, hot dogs and bottomless soft drinks, benefits. About 6,000 more fans per- food and beverage is not a top-five driver $3 pizza and $5 cheeseburgers among game entered the stadium earlier than of our bottom line,” Greg Beadles, the the options, they were the lowest they did in 2016, leading to shorter chief operating officer of AMBSE, tells concession prices – by far – of any major waiting times at the entrance gates, SportBusiness, “and so we pitched to our sports team in the United States. which improved security. And fans, owner [Arthur Blank], ‘Look we think The Falcons’ parent company AMB feeling that they had more money in this is going to cost us money, and this is Sports & Entertainment (AMBSE) their pocket, spent 88 per cent more on the projection on how much we think it’s anticipated a 20-per-cent drop in merchandise on game days than in the going to cost in lost revenues’. concessions revenue on their final year in previous year. “But once we explained the ideas the old Georgia Dome stadium, and they In the 2017 Voice of the Fan surveys, and how it tied in with his big-picture were happy to trade this for goodwill the Falcons and AMBSE’s MLS franchise vision – of being in control of the fan @SportBusiness | www.sportbusiness.com 5 experience from driveway to driveway as much as we could – he supported us to pursue it from then on. After we really dug into it, our owner said it was the right thing to do. “Not everything we do is driven by dollars and cents, we believe in our core values. This is one example where that ATLANTA FALCONS ATLANTA trumps economics.” On the back of the Falcons’ success, the Baltimore Ravens and Jacksonville Jaguars are following suit with cheaper concessions in the coming NFL season, while sports teams from across the globe – as well as US cinema chains – have contacted the franchise to find out more. Fixing a ‘broken model’ (Atlanta Falcons) When Arthur Blank, the co-founder of home improvement store Home Depot, bought the Falcons in 2002, he was “When we talk to other teams control of the business, including hampered in his attempts to improve and venues, we discourage choosing the menu and pricing, the fan experience at the Georgia Dome, and revenues are shared. Revenue their home from 1992 until 2016. them from just lowering maximisation is the concessionaire’s The venue, now demolished, was pricing if they can’t make the only goal and profit margins on food owned and operated by the state and drink can be as high as 77 per cent. of Georgia, via the Georgia World infrastructure changes.” By contrast, at the Mercedes-Benz Congress Center Authority (GWCCA). Greg Beadles | chief operating officer, Stadium, AMBSE pays supplier Levy It meant that the Falcons, who were AMBSE Restaurants a fixed fee but keeps all the primary tenants, had no control over the revenue. “They are paid on a strictly price of concessions, the food quality management-fee basis so we had to pay or even the menu choices as GWCAA the list” due to the poor ratings the for all the investment up front – the arranged its own concessionaire Falcons had received, both locally and equipment [typically a seven-figure contract. nationally, from supporters. investment] – but then that gives us “When the beer was hot and the hot “We started asking ourselves different the flexibility,” says Beadles. “We use dogs were cold, the fans would not questions,” Beadles adds.