SBJ/Nov. 1, 2010/SBJ In-Depth
Gift cards, other perks help close the deal
Published November 1, 2010
Staples Center’s premium-seat inventory has remained relatively stable since the arena opened in 1999, but that doesn’t mean the building’s approach to the market has been stuck in neutral.
The arena’s owner and operator, AEG, has found creative ways to package club-seat inventory and one year ago eliminated eight suites in the upper premium level to build the ultra-exclusive Hyde Lounge.
Staples Center still has 150 traditional suites plus 18 event rental units. It’s a much larger number than most big league arenas, but one officials consider to be the right number for Los Angeles. The long-term suites are sold out again this season, due in large part to the 160 guaranteed dates tied to the venue’s four sports tenants.
Having the defending NBA champion Lakers as your ace in the hole certainly helps move the highest-priced real estate. Selling club seats that cover all Lakers, Kings, Clippers and Sparks games is a separate issue.
AEG, like other sports facilities and teams, has struggled to move that midpriced inventory. The arena has 2,600 Premier Seats, what AEG calls its club seats. As of mid-October, just under 2,000 had been sold, said Lee Zeidman, senior vice president and general manager.
Premier Seats cost $15,000 to $24,000 per seat for those 160 games depending on location. Despite the large gap in unsold seats, Zeidman says he’s pleased with the results given the state of the economy and the changes in spending for corporate hospitality.
“It’s all about using the assets we have here,” Zeidman said. “The days of selling club seats based on the teams alone is done. We need to take a look at everything we have on this campus,” including L.A. Live, the entertainment district across the street from the arena.
For the second year, AEG has packaged Premier Seats with gift cards and coupons to redeem at L.A. Live’s 19 restaurants, two hotels and the Grammys Museum. The value of those in-kind offers is $2,000, according to Zeidman. Suite owners get the same perks at L.A. Live and the value-add increases to $2,500 for them, he said.
Separately, AEG has booked an exclusive performance for premium-seat clients to see the Radio City Christmas Spectacular starring the Rockettes at L.A. Live’s Nokia Theatre. The Dec. 11 performance — the show runs Dec. 9-12 — includes a free holiday spread provided by Levy Restaurants, Staples Center’s food provider.
To further spur premium sales, AEG is including a complimentary membership to the Lexus Club restaurant for new Premier Seat patrons and for those renewing their deals. The regular fees are $1,500 to $5,000 per season.
What’s new for this year is the one-year Premier Seat renewals AEG has granted to about 25 clients that have been loyal customers for the past six to 10 years at Staples Center, Zeidman said, a recognition by AEG of the difficult economic times. Those clients pay a $1,000 upcharge with a commitment to enter into a new deal for three or six years the following season.
The Hyde Lounge, a joint venture between AEG and Hollywood nightclub operator SBE, opened last year with an invitation-only format. For this season, the operators developed a membership plan with fees ranging from $2,000 to $13,000 annually. The space has room for 175 people and has seats and open views to the game.
AEG continues to search for additional values for existing and new suite and Premier Seat customers. Arena officials recognize they need to continue to get creative with perks.
“We hope that by adding various things each year to our premium-seat program, it makes it more affordable and sexy for people looking to buy,” Zeidman said. “We are looking for something above and beyond the norm.”