SBJ/Nov. 1, 2010/SBJ In-Depth

Arena a model for keeping up with trends

TD Garden is one big league facility the sports industry points to as a model for adjusting premium-seat inventory to meet demand.

The Boston arena, now 15 years old, opened in 1995 with more than 100 suites and about 2,400 club seats. Those two products were sold on multiyear terms, and the investment covered tickets to Bruins and Celtics games and first rights to buy concert tickets.

Now, the venue has pared its suite and club-seat inventory, similar to many other big league arenas. The number of traditional suites has been reduced to 88 and total club seats have been cut more than half to 1,100, with supporting hospitality spaces repositioned into new revenue-producing products.

Arena owner Delaware North Cos., the Bruins and Sportservice, the facility’s food and retail provider, learned, like others over the years, that few companies and individuals have the ability to attend every event.

Four years ago, arena executives decided to refresh club spaces and break apart those ticket packages, separating them by sport and into mini-plans offering as few as 10 games. The changes provided the flexibility patrons requested, said John Wentzell, president of Delaware North Cos. Boston.



TD GARDEN
The Lofts (above) and the AT&T Sportsdeck
highlight the arena’s premium inventory.

“We drive a different business model than most arenas,” Wentzell said. “You pay a license fee, which is your membership in the club. We try not to sell a seat but a membership.”

The fee, separate from the cost of tickets to events at TD Garden, provides incentives such as opportunities to go to a New England Patriots game or play a round of golf at TPC Boston.

The revamps have developed new hangouts to adapt to a younger crowd than those who first bought regular club seats 15 years ago. Naming-rights deals with AT&T and Heineken for two premium areas helped offset the investment.

The AT&T Sportsdeck, the first club renovation done in 2006, offers an active bar scene with 160 reserved seats and standing room for 75. The club fee is $2,000, on the low end of the arena’s premium offerings, plus a $50 cost per ticket.

For the 150-person Heineken Boardroom, Delaware North consolidated 10 suites over two levels in 2006-07 for a two-story club tied to 75 memberships. The fee per member is $17,000 annually and on average, those patrons pay $95 for a Bruins or Celtics ticket. The big difference with the Boardroom, now in its fourth year, is it operates on a pay-as-you-go model. Members pay only for those tickets they use when attending an event at TD Garden.

“We oversell the memberships because there is breakage and those people do not actually attend every game,” Wentzell said. “It has allowed us to create a very interesting yield mechanism and made it quite profitable for us.”

Another project at the arena, The Lofts, opened two seasons ago. The 12 opera-style boxes seat four to six people and are sold in 10-game packages at a cost of about $15,000 a loft, Wentzell said. A tapas menu is included in that cost.

Some of TD Garden’s 88 suites remain unsold, but Wentzell would not provide specifics. They range in price from $125,000 to $300,000 annually. Tickets average $100 and are a separate cost.

Wentzell said that TD Garden’s single-game rental business has grown to a point where officials will start holding back more suites because they can generate more revenue per event compared with long-term leases.

“The market has changed, it’s not going to go back to the way it was, and it’s probably going to change even more rapidly going forward,” Wentzell said. “You have to pay attention.”

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