When the Atlanta Falcons move into their new Mercedes-Benz Stadium in 2017, they will be offering the deepest discounts in concessions in the National Football League.
Hot dogs, popcorn, pretzels and bottomless sodas (with free refills) for $2 each. Pizza slices, peanuts and fries for $3 each Cheeseburgers for $5 and chicken tenders for $6.
Beers for $5?
Sure, all these concessions on concessions are fantastic news for fans. But how can Falcons owner Arthur Blank expect to stay competitive in a billion-dollar industry by selling his peanuts for … peanuts?
Don’t worry about us, say the Falcons. With all these discounts on items like CrackerJack, the team is quite confident that Falcons fans won’t care if they ever get back.
“This is not a one-day wonder, not grand-opening specials,” Blank said at a press conference last Monday announcing the new pricing scale. “This is a core philosophy.”
The Falcons’ goal is to entice fans to do the majority of their concessions purchasing inside the stadium, instead of stocking up on food and drink items outside the stadium pre- and postgame. And once inside, the prices offer a discount far beyond any of the other 31 NFL stadiums.
According to an annual survey by Team Marketing Report, the average lowest price for a hot dog at an NFL stadium last season was $5.29 and the average lowest price for a soda was $4.79.
“We’re going to get them in [the stadium] earlier, they’re going to linger a little bit longer, they’re going to be a little freer and not think that they’re getting ripped off,” said Steve Cannon, chief executive officer of Blank’s AMB Group, at last Monday’s press conference. “We’ll be able to feed a family of four at our games for $27. That’s 60 to 70 percent cheaper than our competitors. In any fan survey, food and beverage is one of the most important drivers of fan experience and the one that is the most broken. It’s either lack of quality, lousy delivery or bloodcurdling pricing.”
Mercedez-Benz Stadium will offer 65 percent more concessions stands than the Falcons’ current home, the Georgia Dome. Blank said the Falcons have deals with five local restaurants and are in talks with four to five more to sell food at the stadium. A full list of restaurants, which will range in selections from BBQ to healthy-choice items, will be released in June or July.
More importantly, the Falcons signed a unique deal with its concessions vendor, Levy Restaurants. The common dynamic has the team sharing revenues with its vendor, which encourages the vendor to charge higher retail prices to fans. According to Bloomberg News, profit margins on food and drink can be as high as 77 percent.
In this case, the Falcons will pay a fixed amount to Levy and keep the revenue themselves, giving the team control of pricing. Cannon said he expects between a 10-to-30 percent increase in sales projections.
At the end of the day, concessions revenue is not a driving factor in the NFL. Unlike other major professional sports, where teams play 41 – or in Major League Baseball, 81 – home games a season, concessions profits are a larger part of the bottom line. With just eight regular-season home games (plus two in the preseason), the revenue generated at the concessions stands is considerably smaller.
According to Bloomberg, the Colts generated $5.2 million in concessions revenue in 2013. But every team received a whopping $226.4 million from the league in national revenue in 2014, dwarfing concessions take-in.
“The NFL is different from other leagues, since the revenue streams are different and there’s only eight regular season home games,” food service consultant Chris Bigelow, who has clients in all four major U.S. sports, told the Washington Post. “In-stadium revenue just isn’t a driving force.”
Ticket sales, on the other hand, continue to drive much of the engine. Personal seat licenses, priced at $500 to $45,000, will be required in order to buy Falcons season tickets at Mercedes-Benz Stadium, which will cost from $55 to $385 per game on top of the one-time PSL fees. Currently at the Georgia Dome, season ticket-holders pay between $41 and $122 per game for non-club seats.
“[Cheap concessions] are being considered charity: ‘We’re looking out for our fans,’” J.C. Bradbury, a sports management professor at Kennesaw State, told Atlanta Magazine. “But the reality is that the Falcons are a profit-maximizing company that wants to make money for the owner.”
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