New pricing model introduced by the AMB Sports & Entertainment, owners of the Atlanta Falcons and operators of the new Mercedes-Benz Stadium, opening in 2017.
The challenge from team owner Arthur Blank was to ease the pain Atlanta Falcons football fans felt about the price, quality and experience of eating at a stadium, particularly their fans and their stadium. The just-announced solution was a new pricing model which they say slashes the prices across the board, most significantly on fan favorites, while preserving quality and improving speed of service.
It’s not cheap to do. To pull it off, they have to sell it to the industry and remake the model with concessions and catering partners at the same time they sell it to the tenants they will have at the new $1.4 billion, 71,000-seat Mercedes-Benz Stadium when it opens in 2017.
Since AMB Sports & Entertainment, operators of the Atlanta Falcons, Atlanta United Soccer team and Mercedes-Benz Stadium, announced the Fans First initiative Monday, the publicity alone has been a huge return. It has gone viral, as Mike Gomes, AMBSE SVP of Fan Experience who has Disney in his DNA, noted.
The basics are simple. Fans will be charged $2 per for non-alcoholic beverages with unlimited refills (Coca-Cola is their partner, and has been for 50 years, and includes Dasani bottled water in that group); $2 for the standard 8/1 pound hot dog, and for pretzels and popcorn; $3 for peanuts, pizza, nachos and waffle fries; and $5 for domestic beer.
The $5 beer is intentionally not too discounted, noted Rich McKay, AMBSE president and CEO. They intend to discourage rowdiness and encourage responsible drinking, a National Football League initiative.
“Fans First is a cool, good thing to be able to do; it’s the right thing,” McKay said. “Arthur pushed us hard to look at everything, and this is one way we can change the fan experience. We began talking about this five years ago.”
Falcons executives made a tour of other stadiums to gather ideas and one that jumped out was the New England Patriots, who self op. Ownership there impressed upon them the possibilities are limitless when the team controls the experience, McKay said.
Two years ago, they interviewed potential concessionaires and McKay said many did not grasp the Falcons’ intention to sharply decrease prices with no ulterior motive. Levy Restaurants was chosen as their partner and, indeed, grasps the plan, he said. The deal is a management fee agreement. Capital investment is all the Falcons, McKay said, but “we need their expertise. We knew we had to set up grill and cooking capacity to deal with the fact there could be increased demand. You can’t have something there and not have availability.”
The result is 670 points of sale (not including portables), which means averaging 100 people per. The number of pooints of sale is 65 percent more than they have in the 1992-era Georgia Dome (also a Levy account and their curent home field), but probably similar to what is in new stadiums.
Gomes noted that it is not just number of points of sale, but distrubtion and availability. The unlimited refill stations for soda will be set apart from the concessions stands, for instance.
“More than anything, our cooking capacity is more than in other stadiums,” McKay said. “It is certainly greater than other new stadiums.” It is 50 percent more than the Georgia Dome. “We were very strategic where we located it – on every level, every section, balancing the stadium, because when you charge $3 for French fries, if you start putting those stations too far apart, you will have a problem. Levy helped us engineer that.”
There are events, most notably the Masters in Augusta, Ga., that have similar “concessions philosophy,” McKay said, though no other stadia are doing what they are contemplating.
He also emphasized that ownership is committed to this new concessions philosophy for the longterm. “This is not a promotion. We’re not making changes year two or three. And it’s not on two items no one really wants. We did it on every single core item and made it a philosophy of ours.”
And they sold that philosophy to the National Collegiate Athletic Association, which will have its Final Four at Mercedes-Benz Stadium in the future. “We’ve been committed a long time. When we made our presentation to the NCAA 18 months ago for the Final Four, I laid out this pricing and how we would go about this and committed to them that for their event, we will not raise the prices. They liked that a lot.”
On May 24, they will learn if the National Football League concurs, when announcement is made of sites for future Super Bowls. It’s part of the Falcons’ bid.
As the NFL average of $20 per cap of food and drink, which is times 70,000 for Falcons football, McKay said they know theirs will be less. That’s not the point.
“We were quick to say in the [concessionaire] interview process, and it could be totally contrary to common sense, that we don’t want to discuss per caps. It’s about the fan experience. I wouldn’t even tell you we have projections on the per cap. Some said they had analytics that showed how we could drive people late in the game to buy. That was never our point.”
However, it might very well mean more families and more young fans could afford to attend events. “You want young fans because those are fans for life,” McKay said.
He also noted that the stadium only has 10 football games, but it will also host 20 Atlanta United soccer games, several college football games and concerts. “We will have a lot of events of over 40,000 people. We will have this same pricing structure for all of those events,” McKay said.
Rendering of the Atlanta Falcons' new $1.4 billion, "fan-friendly on every level," downtown stadium opening in 2017.
“If a fan tells us food and beverage is important, which they do, yet it rates lowest in the game-day experience, why are we going to continue to do more of the same?” Gomes asked rhetorically.
It is his job, along with Levy and the rest of the Falcons team, to make it work. His concern is the throughput, the speed of sale, the quality of product and the pricing.
The comparison was with convenience stores and restaurants, not other stadiums, Gomes said. And when they roll out their local restaurant partners, the pricing will again be the same as would be available in the restaurant. It is not limited to hidden places or one or two items. It is an across the board pricing model.
“From an economics perspective, if we create a great fan experience, the revenue will follow,” Gomes said, adding that food and beverage is just a small part of overall revenue for an NFL team. This is about the fan experience overall, which drives revenue.
They don’t know what will happen, to be honest, Gomes said, but they imagine three new demand scenarios as possible. People already coming to stadiums who bought food and beverage will continue to do so except may buy more and they may trade up because specialty items are also “street priced"; people who have avoided stadium purchases and eaten at shoulder periods will no longer find that a barrier, resulting in incremental transactions; and third, “especially if we program other experiential items, like events before the game,” and given the percentage of fans who take public transportation in Atlanta, fans may come earlier or stay longer, moving the demand period.
“We’re not trying to say, 'here’s the new model.' For us, for our market, for what our fans have said, this is the right thing to do,” McKay said. Fans First is an overall Atlanta Falcons model that involves the entire building design. “We like to say we tried to make the amenities great on every level for every fan, not just make the premium experience better.”
Interviewed for this story: Rich McKay and Michael Gomes, (770) 965-3115