Marriott Corp., which suffered through a nightmare rookie season running the food concessions at Dodger Stadium, may be off to a rough start in its sophomore year as well.
The union representing the stadium's 1,000 food workers says Marriott, complaining that it has lost money on the venture, is proposing "a whole host of take-aways" that could cut some workers' pay as much as 30%. Under the proposal, for example, vendors' commissions would drop to as low as 16% of sales from the 21.5% it has been since Dodger Stadium opened in 1962, union organizer Gary Guthman said.
Marriott's every move last year seemed to create controversy: doing away with grilled Dodger Dogs, forbidding a popular vendor from throwing bags of peanuts and ordering salespeople to keep working during the national anthem. It later reversed all three decisions.
Washington, D.C.-based Marriott and Local 11 of the Hotel Employees and Restaurant Employees Union are negotiating a contract to replace one that expires April 1. They have had one meeting, on Feb. 11, at which Marriott outlined its proposal. The next meeting is Wednesday.
Robert T. Souers, a Marriott vice president for corporate information, said the union is not portraying Marriott's proposal accurately, but he declined to be specific. He said he expects an amicable settlement before the April 1 deadline.
Souers also declined to say how much money Marriott lost at Dodger Stadium last year, but he said: "To rectify the situation, we're looking to both increase sales and reduce costs in the year ahead."
Union sources said Marriott managers told them that the losses were substantial.
If Marriott could lose money last year--when the Dodgers led the National League with attendance of 3.3 million--it was either because of bad management or because it made a "low-ball" bid to wrest the contract away from the vendor who had held it 29 years, Guthman said Thursday.
An executive of the Florida company that helped Marriott develop its Dodger Stadium bid said the deal should be a money-maker.
"If it had been supervised and managed properly, it could have turned a profit," said Kenneth J. Young, executive vice president of New Vista Services Inc. of Tampa.
New Vista is suing Marriott for $10.75 million for allegedly breaching a partnership agreement under which the firms bid successfully on food-service contracts for Dodger Stadium; the Salt Palace in Salt Lake City, home of the Utah Jazz basketball team, and Reunion Arena in Dallas, home of the Dallas Mavericks.
New Vista charges that Marriott used New Vista's expertise and reputation in the arena concessions business to help it win the contracts, then dumped New Vista in December, 1990, once the bids were accepted.
Marriott does not comment on matters in litigation, Souers said.
Marriott got into trouble recently when the real estate slump made it impossible to unload hotels and nursing homes it built with the intention of selling, according to analyst Michael G. Mueller of Montgomery Securities in San Francisco.
As a result, it now carries $3.6 billion in debt, interest on which is dragging earnings down.
Mueller said Marriott's strategy is to build up its service businesses, such as stadium concessions and hotel management, but decrease its capital-intensiveness--that is, get less involved in developing or owning hotels and other real estate.