The economics of stadium food

vivatifosi

Saw this on google news and thought it worthy of a thread.

The NFL team Atlanta Falcons is having a new stadium built. As part of the new stadium, they are going to put up the number of food stalls and charge street food prices. The idea is to get more people to eat in the stadium, as they feel they will make more money rather than less if they do so.

To do this involves changing the contract model. If it works, it will be interesting to see if it will be taken on elsewhere. Could be a win/win (for the clubs and fans anyway as it is the food franchise holder that takes the risk).

Article:

http://www.bloomberg.com/news/articles/2016-05-17/the-economics-of-the-falcons-new-super-cheap-stadium-food

MacMickster

It is unlikely to work in the UK.

In the US you often get fans sitting in the car parks with picnics or barbecues going, and it is these fans that they are obviously trying to get into the stadium earlier.

In the UK, people tend to go for a few beers, rather than a meal, before any sporting event. Within the stadium itself, many councils, as part of the licensing, insist that alcohol can't be consumed in the seating area. The atmosphere for drinkers is probably far better in local pubs than standing for a couple of hours in the concourse below the seating areas.

Additionally, it is match or event day sales that keeps a number of pubs viable. Attract the drinkers away from them and into the stadia then they are likely to close without that revenue.

paddyrg

Might work - I remember when buying anything at Heathrow cost so much more than the high street (much like most airports worldwide), but by reducing the prices the franchisees could charge and having a promotion that they had real prices, it's meant I am happy to leave my buying until the airport as opposed to carrying extra stuff.

vivatifosi

It's not something I know anything about, I popped a thread up because it sounded different to discussing house prices and Brexit.

I did wonder though, if the clubs are not the risk takers, whether the model offers them an additional profit stream.

antrobus

MacMickster wrote: »

It is unlikely to work in the UK.
....

The economics of the NFL is very different from the economics of the UK Premier League.

For one thing you've only got eight regular home games a season (less if one of them is in the UK) , or ten if you throw in preseason. I don't expect that the amount of income you get from the stadium really matters all that much.

vivatifosi

antrobus wrote: »

The economics of the NFL is very different from the economics of the UK Premier League.

For one thing you've only got eight regular home games a season (less if one of them is in the UK) , or ten if you throw in preseason. I don't expect that the amount of income you get from the stadium really matters all that much.

That's fair. They do have other things on though. For example stadium gigs, some play host to college teams, other competitions, etc.

Generali

antrobus wrote: »

The economics of the NFL is very different from the economics of the UK Premier League.

For one thing you've only got eight regular home games a season (less if one of them is in the UK) , or ten if you throw in preseason. I don't expect that the amount of income you get from the stadium really matters all that much.

One of the big things in US sports now is getting multi-use out of stadia, which typically the sports teams doesn't have to pay for. Those stadia are also typically out of town so they aren't competing for food with the Dog and Duck and Davo's Kebabaria as is the case with The Oval or White Hart Lane, they are competing with people bringing their own or not eating there at all.

As the article states, the NFL teams got $220 million a piece last season from central revenues (things like TV rights and shirt sales are done centrally by the league and the monies divvied up evenly between the teams) so food is a small part of their revenues so this makes this a pretty low risk experiment. I'd argue that Premier League soccer revenues are looking more and more like those of US sports with matchday revenues becoming less important as TV money rises.

I expect to see much more of a cap on season ticket prices as crowds become more of atmosphere provider for Davo and his mates watching the match in Pak Krek or Barranquilla and higher prices for 'match day experience packages' for corporates and irregular visitors.

I think the model is meant to be Davina flies Davo and the kids from Canada for a once-in-a-lifetime diamond-level matchday solution so they can watch a real live game at Carrow Road rather than watching their beloved Nor-witch City on TSN at the bar.

antrobus

vivatifosi wrote: »

That's fair. They do have other things on though. For example stadium gigs, some play host to college teams, other competitions, etc.

I would presume so. Doesn't make much sense owning an asset which is only used ten times a year. I believe that in the case of the brand spanking new Mercedes-Benz stadium in Atlanta, that it is also the home of the local MLS team.

Generali wrote: »

One of the big things in US sports now is getting multi-use out of stadia, which typically the sports teams doesn't have to pay for.....

I'm not sure how many NFL teams actually own their own stadiums. I know that the 49ers don't, Levi's Stadium is actually owned by Santa Clara. I don't think they're the only ones, a number of NFL stadiums are actually owned by the US equivalent of local authorities.

Generali

antrobus wrote: »

I'm not sure how many NFL teams actually own their own stadiums. I know that the 49ers don't, Levi's Stadium is actually owned by Santa Clara. I don't think they're the only ones, a number of NFL stadiums are actually owned by the US equivalent of local authorities.

AIUI, and I can't say that I've studied this in any depth, the typical modern business model is that you:

- Get the local Government to build you a shiny new stadium for your sports team
- Rent that stadium off the local Government (at below a commercial rate)
- Look to gain franchises for other sports to get the stadium complex working for you as many days as possible

Conrad

[QUOTE=MacMickster;70687137


It is unlikely to work in the UK.

In the UK, people tend to go for a few beers, rather than a meal, before any sporting event.


[/QUOTE]




I take the opposite view mate, it would work very well in the UK.


When I go to footie, all the cafes, pie n mash, chippys, cjicken shops, buger vans, kebab houses etc have queues out the door (often huge), because the food inside stadium is so appalling and expensive, even the coffee is like British Rail c 1978.


Also there is gaping hole in the market for better quality fayre - not everyone always wants nasty junk food. If they for example did nice handmade pizza's (smaller rectangles) they'd make a killing, for example by inviting owner operators. Things like Korean steamed buns or a Columbian outlet selling those triangle samosa type things (Emponathas?) could work.

vivatifosi

Conrad wrote: »

I take the opposite view mate, it would work very well in the UK.


When I go to footie, all the cafes, pie n mash, chippys, cjicken shops, buger vans, kebab houses etc have queues out the door (often huge), because the food inside stadium is so appalling and expensive, even the coffee is like British Rail c 1978.


Also there is gaping hole in the market for better quality fayre - not everyone always wants nasty junk food. If they for example did nice handmade pizza's (smaller rectangles) they'd make a killing, for example by inviting owner operators. Things like Korean steamed buns or a Columbian outlet selling those triangle samosa type things (Emponathas?) could work.

I attend athletics meets. When the Olympic Games was held in London, the main stadium had wonderful different food concessions. Going back the stadium since its rebuild, I was disappointed that the concessions were now pies, pies and more pies.

I'm hoping that this will change when West Ham move in, but if it doesn't, ti could not be less inspiring if it tried. There's certainly room for decent food concessions, and, dare I suggest, that the profits should go to the tax payer as stadium owner NOT WHU.