SBJ/March 20 - 26, 2006/Facilities

More turmoil at the top isn’t breaking Centerplate

Recent changes in the corporate office of concessionaire Centerplate, which this month named its third CEO in 11 months, haven’t hurt its big league business.

Centerplate won a food contract for Newark’s
new arena, shown in an HOK rendering.
Since Centerplate forced Larry Honig to resign as CEO in April 2005 for conduct unrelated to the company’s performance, the company has renewed contracts for three big league clients and won a 10-year food contract for Newark Arena, the New Jersey Devils’ $310 million facility scheduled to open in 2007. (Centerplate lost to Levy Restaurants in the bid to replace Aramark at Qwest Field in Seattle.)

Chief operating officer Janet Steinmayer moved up to CEO after Paul MacPhail, the former Uno’s Restaurant executive named to replace Honig in September 2005, left Centerplate on March 1 to start his own company outside the concessions business, Centerplate officials said.

Centerplate executives were upfront about what was happening in upper management while they were negotiating to be the Devils’ food provider, a process that started before MacPhail became CEO, said Jeff Vanderbeek, the Devils’ chairman and managing partner.

“Initially, everything we did was with Janet and I felt very comfortable,” he said.

Centerplate signed a five-year contract for regular concessions and premium dining at Lucas Oil Stadium in Indianapolis when the Colts’ $500 million facility opens in 2008. Centerplate has been the team’s concessionaire since 1983, when the Colts moved from Baltimore to the RCA Dome.

“We don’t anticipate any issues related to what’s going on at the corporate level,” said Pete Ward, Colts senior executive vice president.

The Metropolitan Sports Facilities Commission in Minneapolis renewed Centerplate’s contract in November for the next six years at the Metrodome. Centerplate has operated the dome’s concessions since it opened in 1982. Aramark has the stadium’s suite contract.

“For our situation, the [on-site] general manager’s position has always been first and foremost the most critical aspect,” said Dennis Alfton, the Metrodome’s director of operations.

“Most existing clients could care less about the corporate office,” said Chris Bigelow, a food service consultant and former Centerplate and Aramark employee. “When you’re going after new business, however, what’s going on at corporate is always fodder for the competition to use.”

Centerplate’s stock, listed on the American Stock Exchange, has traded between $12 and $13 a share for much of the last 12 months and closed last Tuesday at $12.50.

The company reported during its March 8 earnings call that 24 percent of its net sales for 2005, or about $155 million, are up for renewal in 2006, and 10 percent of that business has been retained. Centerplate officials would not disclose how many are sports facility accounts.

The looming question is whether Centerplate will retain its biggest account and oldest client, the New York Yankees. Yankee Stadium is the most lucrative concessions contract in sports; the facility generated about $63 million in food and merchandise revenue in 2004.

The Yankees have been considering food and merchandise vendors for their new $800 million ballpark since August.

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