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SBJ/August 11 - 17, 2003/Facilities
Down come walls and prices
Published August 11, 2003
New NBA arenas in Memphis and Charlotte will be the latest sports facilities to introduce alternative premium-seating plans, offering corporate customers a taste of exclusivity without swallowing the six-figure price tag that comes with luxury suites.
Nationwide Arena’s loge boxes sold out.
The investment is half the cost of a full-fledged suite, team and arena officials said.
"It effectively reduces the number of suites, but it was a matter of what product do we think would fit this market better," said Mike Golub, vice president of business operations for the Memphis Grizzlies. "The interesting thing was that it's in between a suite and a club seat. You have some of the amenities and privacy of a suite but in much smaller increments."
FedEx Forum, opening in 2004, plans to have 60 suites, but there will also be club boxes encompassing 320 seats, or 80 four-person units, all located midlevel behind one basket and opposite the stage end for concerts.
Golub said the team is still "examining how best to package" those seats, with the Grizzlies in the midst of determining the cost with food and beverage. Although the contract isn't complete, Levy Restaurants will likely be the provider, say industry sources. Pricing should be announced in September, with club box patrons having right of first refusal on all events.
Charlotte Arena, opening in 2005, is doing the same, said Barry Silberman, the Bobcats' executive vice president of arena development, operations and entertainment. There will be 315 seats in four-, six- and eight-seat configurations, flanking the founders' suites, 20 rows from the playing floor. Prices have not been established, he said.
The focus on tabletop versions is the result of "a lot more softness in the club seat market" after facilities "built out too much" in the 1990s, said Bill Dorsey, executive director of the Association of Luxury Suite Directors in Cincinnati.
"Too many arenas didn't properly position their club seats and many were situated in the second deck," he said. "There's been erosion in the market." Repackaging club seats closer to the lower bowl with more amenities included has helped.
The Grizzlies and Bobcats got the idea from Nationwide Arena, where the concept has proved an overwhelming success with 26 loge boxes sold out for the NHL Blue Jackets. Costs on an annual basis range from $45,500 for four seats on the end line to $75,500 for six seats near center ice, said Todd Taylor, vice president of ticket sales.
Silberman said: "We visited there in early January. I love the concept, where it's situated in the building and the market niche. The Blue Jackets told us they couldn't build enough of them."
In comparison, Nationwide Arena's executive suites are $130,000 to $152,000; Taylor said, however, that those high-end packages include tickets to all other events. Tickets for loge boxes to non-hockey dates are "more inclusive than not," he noted. "Occasionally, they are not included, based on the [contract] situation for other events."
Loge leases are five-, seven- and 10-year terms with built-in escalator clauses. The latest escalator recently kicked in, Taylor said. Loges were originally $38,500 to $68,500 when the venue opened in 2000.
Loge seats are "just above the lower bowl, providing great sight lines," said Jay Cooper, SMG's general manager in Columbus. Amenities include preferred parking, refrigerators, storage cabinets, 9- to 12-inch flat-screen TVs and access to two club lounges.
Architect George Heinlein of Heinlein Schrock Stearns in Kansas City designed the loge seats at Nationwide Arena. But Heinlein credited New York Jets President Jay Cross with creating the minibox, which the two first used at AmericanAirlines Arena in Miami when Cross was with the Heat.
"You can still generate a considerable amount of revenue without giving up a tremendous amount of real estate," Heinlein said. "The beauty of this is you're still giving them their own space but with the flexibility to stand up and walk around."