Athletic stadiums try to boost attendance by offering up cheaper food prices

  • Both the Detroit Lions and Atlanta Hawks have announced concession discounts to lure in fans.
  • Experts say that food discounts are part of organizations' need to be 'quick and nimble' for consumers
A wide angle view of Mercedes-Benz stadium in Atlanta, GA.
Michael Wade | Icon Sportswire | Getty Images
A wide angle view of Mercedes-Benz stadium in Atlanta, GA.

As the NFL kicks off its regular season, some sports teams are experimenting with a secret ingredient to help reverse declining attendance: cheaper food.

Recently, the Detroit Lions announced concession discounts for the first hour after gates open at the stadium, with $5 beers and lower-priced meal combos available at certain stands throughout the rest of the game. Lions Team President Rod Wood explained in a statement that the team's program aims to serve fans "without hurting the quality or speed of service."

To be sure, concession sales are relatively inconsequential to an athletic team's overall revenue, experts say. Still, cheaper prices can provide a sentiment boost; and for fans vacillating on whether to spend money on a game ticket, it can work as an added incentive.

With an increasing number of fans opting to watch in the comfort of their own homes, arenas are facing more competition than ever for getting fans through the door. The dynamic "speaks to the incredible amount of competition that exists for consumer share of mind and wallet," said Columbia University sports management professor Scott Rosner.

In July, the NBA's Atlanta Hawks announced plans to slice concession stand prices in half, becoming the first professional basketball team to offer what it called "fan-friendly" pricing.

The move comes as the team – which last season suffered the worst attendance record in professional basketball – awaits the completion of a $193 million renovation of State Farm Arena that management hopes will help excite the fan base and fill seats.

The Hawks are Atlanta's third pro franchise to offer cheaper food stand prices, following moves a year earlier by the NFL's Falcons and Major League Soccer's Atlanta United, when they moved into the new Mercedes-Benz Stadium.

Both teams topped fan satisfaction surveys that measure food and beverage experiences at sports venues. Meanwhile, Falcons data showed that average per-fan spending on concessions soared 16 percent over the 2016 season, with the trend continuing into last season.

Deep price cuts may cost stadiums needed revenue, but according to NYU sports management professor Wayne McDonell, it's a relatively low-risk bet. When fans are saving on concessions, they may be more willing to spend elsewhere, like on merchandise or tickets to other games, he said.

"I think we saw that with the Falcons," McDonell told CNBC recently, citing "the accessibility and affordability of food" as a way to help fans feel invested in the game.

Ticket sales tick up

Meanwhile, the phenomenon extends beyond the Big Peach: sports teams in Baltimore and Mississippi have recently announced similar price moves. Baltimore Ravens fans will get popcorn or a pretzel for $3; while Mississippi State boosters can score a hot dog or nachos for as little as $2.

Mississippi State is already seeing some rewards from its food and beverage announcement, according to Leah Beasley, senior associate athletic director of external affairs, who spoke to CNBC ahead of the regular season.

"We don't know how much product we're going to sell," Beasley said, but the university has already seen an uptick in ticket sales, which she said "was a direct correlation to the concessions press release."

For all the positive outcomes, the initiatives are not without challenges. For AMB Group, the family organization which owns the Atlanta Falcons, the decision to cut costs for fans took more than changing numbers on a menu board. It's not an easy decision given that vendors make their money on high-priced food that irks fans who are forced to dig deep into their pockets.

"The only way concessionaires can make back their investment and squeeze out a few points of margin is to charge high prices," said Columbia University's Rosner.

AMB Group sought to take full control of the model, set the prices itself and team up with a company that would manage the business on game day. "We wanted to own the business ourselves, so we were looking for partners to come in and advise us and to manage the business," said AMB Group COO Greg Beatles. Ultimately, the company partnered with Levy Restaurants, one of the nation's largest stadium vendors.

Beatles described the process of presenting the model at league business meetings, saying, "Most of the people in those rooms might've thought that we were crazy or still think that we're crazy." Yet the early success of AMB Group's food and beverage program prompted more and more teams to ask for information about it, he told CNBC.

Atlanta Falcons quarterback Matt Ryan rolls out during the game between the Atlanta Falcons and the Jacksonville Jaguars.
David Rosenblum | Icon Sportswire | Getty Images
Atlanta Falcons quarterback Matt Ryan rolls out during the game between the Atlanta Falcons and the Jacksonville Jaguars.

The $1.6 billion Mercedes-Benz Stadium, which replaced Atlanta's 25-year-old Georgia Dome, was built with food and beverage in mind. The structure features larger concourses to make room for longer queues, 26 percent more stands with cooking capacity than in the dome and state-of-the-art point-of-sale technology.

Some teams don't yet have the infrastructure for those changes, Beatles said. "There are teams that have told us they're really interested in doing this, and in some cases we've advised them, 'Hey, you need to wait until you can do these renovations.'"

Each of the teams that have announced such price cuts cited a desire to enhance the fan experience, indicating their wish to go beyond game play to reel fans in. State Farm Arena, for example, will have a courtside bar, a barbershop and golf simulation suites.

Counterintuitively, some are also betting on some higher-priced food items. State Farm Arena has brought in an executive chef to improve high-end food offerings, and will debut a restaurant concept from country music singer Zac Brown.

Visitors to Mercedes-Benz Stadium can pick from several Atlanta restaurateurs and chains that have stands there, which is appealing to fans who aren't just looking for the cheapest option, Beatles said. "There's some gourmet options that the foodies love coming in early and trying."

NYU's McDonell said the food pricing structure showed how "Teams need to be quick and nimble. They need to be able to adapt to the needs of consumers."