When Arthur Blank, the billionaire co-founder of home improvement retail chain Home Depot, unveiled a glittering and futuristic coliseum for his Atlanta-based National Football League and Major League Soccer franchises a year ago, he did something unthinkable: He decided to charge fans just $2 for a hot dog.
Sporting arenas are notorious for mediocre foods and beverages served at exorbitant cost, such as a $9 beer or $5 hot dog, so Blank figured a menu of items with “fan-first” prices could make amends for high-dollar tickets and keep the locals coming back to Mercedes-Benz Stadium. The cheaper concessions — $3 pizza slices, $2 pretzels — have received breathless praise from Atlanta Falcons and Atlanta United FC fans, and the resulting sales figures and media attention quickly inspired more professional teams and universities to try out the Atlanta model at their stadiums. Should they see similar success, “discount” stadium food may soon become the norm in America.
In recent years, stadium operators have “improved” game day by serving premium concessions from locally known chefs and restaurants. In Atlanta, some fans don’t mind shelling out $14 for a fried chicken sandwich from Top Chef alum Kevin Gillespie. But for budget-conscious individuals and families — or those who just don’t care about eating trendy food while watching sports — basic, reasonably priced concessions are needed.
In 2016, a stadium beer and hot dog would set the average NFL fan back about $12.50. Multiply that times two and add a couple more dogs and two soft drinks, and a family of four was looking at a $45 tab. When Falcons fans walked into Mercedes-Benz Stadium for the first time last year, they were presented with $5 domestic beers, $3 baskets of waffle fries, $2 bottled waters and soft drinks, and $2 hot dogs, among other selections that were meant to be easy on the wallet. High-end options with high-end prices were available too, but the stadium’s marketing materials proudly asserted a mere $28 dollars would cover a full meal — hot dog, fries, and soft drink — for everyone in that family of four (or $35 if the grown-ups wanted an adult beverage).
“We have listened to the concerns of the fans on the food and beverage experience and have responded to those concerns in a way that honors our commitment to providing the best possible fan experience at our events,” Blank said when the pricing was announced in 2016.
By discounting food, Blank bet that total concessions revenue would increase. He was right. In June, Falcons chief executive officer Rich McKay announced a 16-percent increase in sales over the 2016 season, the team’s last at the millennial-aged and since-imploded Georgia Dome. League-wide fan surveys revealed the Falcons earned a top-three ranking in terms of game day experience for the first time ever. Locals who attended games at Mercedes-Benz Stadium strongly indicated they planned to return. Blank was named Sports Executive of the Year at the 2018 Sports Business Awards in New York City.
Sports executives will flock to any idea that boosts revenue. Ahead of the new Major League Baseball season in March, the Baltimore Orioles introduced what they call “family-friendly” pricing for concessions. In the last three months, similar announcements have been made by the NFL’s Baltimore Ravens and Detroit Lions; football programs at Mississippi State University, the University of Texas, and Clemson University; and the National Basketball Association’s Atlanta Hawks, whose downtown Atlanta arena sits in the shadow of Mercedes-Benz Stadium. The sorts of dishes getting the bargain treatment are typically standard ballpark fare that come from large food-service companies: hot dogs, hamburgers, french fries, Bud Lights, and the like. Sports fans have been scarfing down simple cuisine with no qualms for decades. Only when it became painfully overpriced did they begin to complain.
All of the corresponding press releases indicate these teams simply want to do right by their loyal supporters. Blank himself is upping the ante having just revealed lower prices for select premium items at the Benz. It should be noted, though, that the newly announced discounts come several weeks after Atlanta United fans were informed of substantial increases to season ticket prices. MLS tickets are far cheaper than those for NFL games, but the bump left fans of the Five Stripes, as the team is locally known, grumbling.
This burgeoning trend has come alive almost overnight, but it is not yet universally embraced. “There could be [reduced concession prices] down the road, but we don’t have that on the table at this point,” Mark Ewing, senior associate athletic director and chief financial officer for Louisiana State University Athletics, tells the Greater Baton Rouge Business Report. “It’s a revenue loss, so you’ve got to make up for that loss somewhere else.”
For Blank and his fellow NFL owners, increasing food and beverage sales with discounted pricing is nice, but losing a little money on those discounts would be fine, too, as long as fans have a good time at the stadium. Concessions, in the broad picture, don’t matter all that much: The money generated by television broadcasts — more than $8 billion for the league in 2017 — is far more important. And in terms of value, that comes from the live product. Once a fan commits to buying a ticket, or season tickets, cash-register sounds erupt from the team’s front office. With eight home games per season, not including potential playoff dates, the average price of a single ticket to an NFL game was $172 in 2017 (baseball and basketball fans have it easier, paying an average of $32 and $55 for MLB and NBA games, respectively).
Nineteen NFL teams require season-ticket holders to purchase personal seat licenses — that is, they must hand over a remarkable sum just to have the opportunity to buy high-priced tickets. These licenses are good for as many years as the purchaser wants to renew their season ticket, but they cost anywhere from $500 to $100,000 across the league. Owners will be happy to spend a little money in the form of cheaper concessions if it gives 60,000 or so fans the happy feelings that will convince them to spend thousands of dollars on tickets and licenses each season. At a stadium that is pricing its concessions with fans in mind, that family of four may save $10 or $15 on food, but it will take close to $700 to get everyone in the building for three hours of football.
“While food and beverage has always been a strong component of team revenues,” Chris Bigelow, president of the Bigelow Companies, a food-service consulting firm, tells Eater, “many are now saying, ‘I will make more money on ticket pricing and often seat licensees, as well as TV contracts, so I am willing to forgo the level of revenue I used to earn from food and beverage.’”