New Arenas: Food Scores, Too
As sports and entertainment facilities become increasingly geared toward wealthy and corporate patrons, operators of arenas and stadiums across the country have sought to boost the quality of their amenities, especially the food, to keep rich ticket-holders coming back, even if the home teams are lousy.
Now, with the arrival of Chicago-based Levy Restaurants, Los Angeles is the latest city to host basketball, hockey and haute cuisine all in the same place--a combination now considered crucial for the economic health of live sports and entertainment complexes.
In the last nine years, Levy Restaurants has launched upscale food service operations in 15 new or remodeled arenas and stadiums, a concept the company is credited with pioneering and one that has helped it double its annual revenue over the last three years.
Levy’s success is part of a larger trend among food service operators that has seen income at sports and entertainment facilities rise over the last five years as new and modernized venues attract more people.
“The more people view these arenas as entertainment complexes, the more they come,” said Joe Pistone of Philadelphia-based Aramark, which handles food service at more than 70 professional sports facilities across the country, including Dodger Stadium.
While Aramark and New York-based rival Ogden Corp. both offer upscale dining and catering at some of their locations, they mostly handle fast-food concessions.
Levy, on the other hand, has focused solely on cuisine for the well-heeled at a time when sports and entertainment complexes have become more dependent on revenue from luxury seating and suites that fetch anywhere from $12,000 to $260,000 a year.
Restaurant-quality food and beverages have become an important component in keeping sky box and premium-seat holders happy, said Kevin Uhlich, vice president of ballpark operations for Anaheim’s Edison International Field, which contracted with Levy two years ago to cater to its suites and manage its three sit-down restaurants.
“Club seats and suites are pricey,” Uhlich said. “Guests are looking for the amenities that they should receive for those prices. We felt it was in our building’s best interest to bring in a professional to do that type of dining experience.”
Levy Chairman and Chief Executive Larry Levy said similar reasoning at other venues has helped contribute to his company’s success.
“To understand the economics behind the explosion of new arenas and stadiums around the country, it’s all fueled by the sale of premium seating,” Levy said. “The reason these buildings are being built is because there’s this income stream that didn’t exist in the old buildings.”
Levy and his brother Mark are widely credited with helping launch the upscale stadium food trend in 1983 when they began catering restaurant-quality fare to 17 new sky boxes at Chicago’s Comiskey Park. At the time, the pair were overseeing a 5-year-old restaurant company that operated a handful of local eateries.
Since then, the company has ushered fine dining into arenas and stadiums including Cleveland’s Jacobs Field, Washington’s MCI Center and the Pepsi Center in Denver. Along with its sports and entertainment segment, the company also operates 15 restaurants and handles food service for two racetracks, four convention centers and a zoo.
In October, Levy opened shop in the new Staples Center in Los Angeles, its fourth West Coast venue after Anaheim, Oakland’s Network Associates Coliseum and Oakland Arena.
At Staples, the company handles food preparation for the exclusive Grand Reserve Room, the 526-seat Arena Club, 170 private suites and 2,500 premium seats. The fare ranges from filet mignon to made-to-order sandwiches and includes such restaurant touches as a dessert cart and table-side pasta preparation.
Ogden, meanwhile, was tapped to operate the facility’s 24 general concession stands.
Staples Center President Tim Leiweke said Levy beat out two other bidders for the upscale dining contract, largely on the quality of its food. “We went around and toured some of their other sites, and their food was phenomenal,” Leiweke said.
Levy’s reputation, said restaurant consultant Ron Paul, is a key to its success. Not only did the company pioneer the upscale arena food concept, he said, it continues to be an award-winning restaurant operator. Its Spiaggia restaurant in Chicago, for example, has been named one of the nation’s best for Italian cuisine, and last year the food service industry’s largest trade group named the company the best U.S. restaurateur.
“They’ve basically traded on the reputation of their restaurants,” Paul said. “Their sales pitch is very simple: ‘We know good food. It’s what we serve in our restaurants.’ ”
Whatever its secret, Levy’s knack for winning arena contracts has translated into savory returns for the privately held company. Since 1996, the company’s annual revenue has grown by at least 17%, with this year’s gross expected to hit $220 million.
Levy said income from sports and entertainment operations this year will account for about 60% of revenue.
“We’re going to really concentrate on sports and entertainment and make that the growth engine of our company,” Levy said. “It’s a much better business than restaurants, where you invest $1 million to $5 million to guess at public taste.”
