SBJ/Jan. 10-16, 2011/In Depth

Blueprint for the future

The business of sports design and construction has changed in recent years, buffeted by the recession but also victimized by its own success: With most of the Big Four pro teams in relatively new buildings, there just aren’t as many blockbuster projects to go around as there used to be. To take a look at what’s new in the industry and where it is going, both at home and abroad, SportsBusiness Journal held a roundtable discussion Dec. 6 with designers, a construction executive and an owner’s representative at our Charlotte headquarters. Here are some of the highlights:

• Can you give us the state of sports facility design? Where are the jobs? Where are the opportunities?

MATT ROSSETTI, Rossetti: We’re looking at opportunities in a lot of underperforming venues. We have [as an industry] been a part
Matt Rossetti
of two decades of a ton of building [starting] in the ’90s. In the early 2000s, there were a lot of buildings that were done I think in the name of one-upmanship, and so going back now 10 years, 15 years later, [we are] re-examining what could be done to make those buildings operate better and what could be done make those buildings perform better economically.

JON NIEMUTH, Aecom Ellerbe Becket: I think there are two areas we call high-growth sectors. It’s domestic, collegiate in 48 states, and then World Cup and Olympics.

JOE DIESKO, HNTB: That’s where we are, too: collegiate/higher ed. There’s a lot of things just sitting out there waiting for some donors to come in, and I think it will happen. … We’re doing Berkeley’s huge [football stadium] project, over $400 million.

• Marc, from the owner’s side, what do you see out there?

MARC FARHA, Icon Venue Group: I think we’re really seeing a lot of potential opportunities in major renovations. Sort of building on what Matt just said, we have some underperforming facilities that came online, 15, 17, 18 years ago. Target Center, for example, is trying to line up some pretty major funding towards a major renovation for that facility, and some others, too, as well.

• What are some of the new trends you’re seeing on the design and development stage? What seems to be out there that’s intriguing to the teams and the owners and the facilities?

TOM PACI, Turner: We’re seeing a lot of emphasis on revenue generation … where that stuff is thought out earlier, before it’s
Tom Paci
incorporated into the original design. We’re seeing movement, bigger movement toward LEED; I think it’s here to stay. … Flexibility, as far as the ticket pricing and to deliver the kind of seats that are going in place so they can be flexible to respond to changes in major markets.

ROSSETTI: On the negative side, we’re seeing where a lot more owners are aware of venues. They start picking and choosing like a Chinese menu — design a power suite there, maybe a loge box there — and I think that’s dangerous. It’s a perfect way to get a camel instead of what you set out to create and design.

• So why is it so dangerous though? In terms of you just don’t follow a master plan?

ROSSETTI: I think typically … we set up a concept … a driving force for design, usually revolving around something that has cohesion to it. If you just start plopping in things that look good or something that happened to be what the last arena did, it may or may not have any relationship or relativity to where the design is going. And I don’t just mean design based on aesthetics, I mean design based on business guidelines, ROI, all the parameters.

• Other thoughts on some of that?

DIESKO: You talk about revenue — this whole business exists because of revenue; it doesn’t exist because they want cool stadiums.
Joe Diesko
They started this thing in the ’70s in Kansas City and they just grew it because owners could see ways of making more money. So revenue is always why this business exists, why we all have jobs. The problem is that some of the old ways of getting revenue have slowed down, [such as] suite sales. … People would rather sit closer and actually rather pay more money to sit closer than a club in the back, so the whole club thing is closer in. So we [now] want premium services, close to the action, clubs underneath the seats or like they’re doing in Dallas with those suites underneath, Jets and Giants with the club right there. We’re doing that at the 49ers [project], where you actually have field access as part of your club membership.

FARHA: I don’t know if this is necessarily a trend, but we have a number of clients who come to us who, obviously, are trying to work in a very difficult … economy, and they say, “How can I get a new stadium for less than a billion dollars?” or “How can I get a new arena for less than $500 million?

• Does that mean building smaller?

FARHA: Not necessarily. I think right-sizing it and working hard up front on programming is a key in doing the preconstruction phase. I think too many times we fall into the square-footage trap and we try to do square footage times the cost and try to figure out that way. I’m not necessarily in agreement with that. You have to work hard on what the programming needs are. … You don’t have to have a 2.5 to 3 million-square-foot stadium when you can do it for 1.7 [million] or 1.9 [million] and still provide all the revenue streams and provide all the opportunities and spaces the team needs.

• So what gets cut at that level?

FARHA: Levels. It could be levels. You know, maybe it’s not two levels of suites, maybe it’s one level. It’s not four concourses, it’s
Marc Farha
three concourses. We recently did a soccer project with [Rossetti] that had one concourse in Philadelphia for the Union, and it works well.

• And that saved roughly how much?

: We have one main concourse and the upper’s just basically for suites. I don’t remember the dollars.

: I think his point about using square footage, the levels and things like that, is that you’re not going to get it out in finishes, you’re not going to get it by tweaking things at the end, you get it by cutting big chunks of square footage.

PACI: It goes back to the way the owner chooses to let the project through. I think all the stuff Marc’s talking about is done in preconstruction. You’ve got everybody on board — designers, managers, contractors, food service consultants — everybody’s there together working on one goal, and that’s to satisfy the owner’s needs with a program. That’s when you will save money. You never take it out of the efficiencies. Those early days, that’s when the job is headed for success or not.

• We just have one project opening next year at the major league level. The Marlins open up the year after. We’re getting close to full build-out in terms of the Big Four. Where do you see it headed for next year and the next two- to three-year period?

EARL SANTEE, Populous: For our practice, 50 percent of our work is outside the United States, whether it’s Canada or Central [or]
Earl Santee
South America, or overseas; we’re going to continue to push that envelope. I mean, that’s where we think that we can sustain and grow the practice. In the States, domestically, there’s work. It’s just the size of the projects. There’s not too many billion-dollar projects left, if any.

• Bill, you have that deal over in Iraq, breaking new ground there.

BILL JOHNSON, 360 Architecture: That was interesting for us. We didn’t go there because we were needed to. I think it was more a unique opportunity. We’re really pretty busy still with the local market, but as Earl said, it’s mostly with renovation, with repurposing buildings and sort of reallocating different seats and qualities of seating and those kinds of things in existing buildings and stadiums. We’re still seeing a lot of that. On the college side, we’re seeing some nice projects come down. We recently got the University of Washington [football] project, a big one in terms of stadium design.

TIM CAHILL, HNTB: For us, we’re happy that we’re doing well with Michigan and the 49ers at the same time. Michigan’s done and we’ll see what happens with the 49ers. We’re still confident it’ll go through and it’ll happen. We did get a good win at Nebraska
Tim Cahill
[football stadium expansion] at the collegiate level. You know, they’re very few and far between, these large-scale projects now, and a lot of projects are smaller scale. With all that’s still going at that level, you have to pick and choose which one you think you can compete with and have a chance of winning.

• We were talking about the differences in the premium and the suite level. What kinds of trends are you seeing at that level? What are owners looking for in the premium levels specifically?

PACI: I think Joe brought up a good point about being closer to the action. That’s a trend that we’re seeing. That’s where the real money is as far as return goes. I know that in ’92 down in Cleveland, which is now Quicken Loans [Arena], they put suites in the middle of the bowl, which was kind of a new innovation at the point. Now we’re seeing more of the bunker suites right down on the floor.

ROSSETTI: One of the things that we’re seeing that’s interesting is the old idea of having the suites and the premium seats exclusive, tucked away on this private level. Now it’s putting them down in the bowels of the building so that they’re close to the players, close to the coming and going before game, after game, that seems to be real, brings a lot of money to those clubs. Get a lot of intermingling as those folks come and go. We’re not just seeing it in arenas, we’re seeing it in sporting events like USTA and NASCAR.

JOHNSON: It’s interesting because … a little trend I’ve noticed is that this era of opulence is over. I think people want something that’s more experiential and more in the moment and in the event, so we’re really seeing a shift sort of away from being in the box and all enclosed.

NIEMUTH: The business model doesn’t necessarily translate premium product to premium product. What you can get for a loge box
Jon Niemuth
in an NBA building isn’t necessarily what that translates down into a collegiate level or up in MLS. … We could go around this table and each give you a different definition of what a loge seat is. So there’s a lot of those seats, but what’s the return on investment? What’s the business model? What’s the experience?

DIESKO: There’s only so many good locations for driving the revenue for those up because you know you’re always going to sell 50-yard-line seats.

FARHA: One of the negatives to that is how you deal with that design and how you have so much in the center, the 50-yard line. In some of our recent projects, [most amenities] are on the ends, so for the rest of the bowl, for the rest of the public … those straightaways in the concourse where you have a club are dead during the event, they’re really just a pass-through area. I know that’s one of the things owners have expressed to us is how to reactivate those areas and spread things out, not try to take everyone to the end and shove them into those spaces.

SANTEE: So you’re asking us to predict market? It’s less predictable now than it’s ever been. Obviously you look at the firms, the firms that would be hired to do market studies. Where are they today? The market’s changed dramatically for them.

FARHA: Our clients are almost acting as the developers, and with that mentality, they’re not just an owner of a professional sports team.

SANTEE: That’s right. In fact, I think most teams have taken over [the] market analysis process. Ten to 20 years ago a lot of firms did market analysis that defined what suite sales and club seats and price points would be. How much saturation they would get in a certain market. That’s all changed. Completely.

• What’s the legacy of that point you made in terms of these clients’ teams becoming like accidental developers? What’s going to be the end result of that?

SANTEE: I think you’ll see that they’ll continue to incubate ideas. It’s almost like you’re bringing a new business enterprise into a place to begin with. So to me, committing an idea, no matter where it fits in the design process, the construction process or the sales process, it should be the right idea because it may reinforce their brand or their image within the community that they’re going to do whatever they can to make the best, most valuable experience for their customer. I don’t want to [design] the same building I did last year over again. And I think in the client’s mind, they don’t want to do it either. There’s a little bit of a formula in the sight lines and a few other things, but there isn’t much. … I think that’s why incubating the ideas is important. And they may fail. Listen, there’s nothing wrong with failing with an idea. Seriously. Because at least you know. The question is how much you invest in an idea before you fail.

• What are some other areas within a building that you’ve seen some traction in terms of use of a building?

JOHNSON: One I can throw out is trying to create a bigger value around sponsorship, not so much naming rights, but sponsors you
Bill Johnson
can showcase to present a product in a really good way. Sort of avoid competing messages and ads. A lot of the technology is allowing us to do that. For New Meadowlands, we had four designated zones. For example, Verizon is a cornerstone sponsor. Their experience starts on the curb and comes through the gate. It’s dedicated all to them. You go through sort of a brand experience situation. It goes all the way up. So we’re starting to see a way to create value around sponsorship and really target things like building sponsorships in and above naming rights, which I think is a whole other thing that’s in transition.

• Would any of you have thought we would be sitting here in December 2010 and neither Cowboys Stadium nor New Meadowlands Stadium would have a naming-rights partner?

SANTEE: If you’d asked us in 2006, we’d say you’re crazy.

ROSSETTI: But it makes perfect sense today.

• What have you seen in terms of the changing dynamics of the naming-rights market?

NIEMUTH: The consumer’s relationship to the brand is a lot more important today than it used to be. My relationship with my phone provider … it means a lot more now than it did 10 years ago. It’s not just about putting Verizon signs everywhere. Verizon cares very much about your experience as a potential customer. Influence, how is that presented, does the technology work, it’s so much bigger of a deal that the risk is even higher than just writing a check. But the thing that the technology does is again … the digital signage allows us to be so much more transparent. I’m still amazed at just the raw number of signs at Meadowlands they switch in and out. Maybe that’s cost management, but you’d think you’d be able to completely “chameleon” that building.

JOHNSON: But you know what, Jon, there’s this sort of “We’re losing that tactile, kind of real part of the buildings,” because everything is so digital now that it’s almost off-putting. I think that some of those decisions about, “OK, we’re going to go out there and we’re going to pull the Giants banners down and hang the Jets banners up” is because they wanted real banners. And that’s kind of a balancing act right now because I do think we’re getting inundated.

NIEMUTH: I went to the Chiefs-Packers game [at Arrowhead Stadium] and Kansas City put its Hall of Honor on the LED board and I’m like, “Really?” But if you look at the opportunities within the building, it goes back to revenue. That revenue is real, there’s minimal opportunities and we’ve got to capitalize it. So now we’ve taken our hall of honors and made it digital. I don’t like it as a fan, but I understand it because sitting on the other side of it, I’m like, well, where else are you going to put it?

SANTEE: Naming rights are still there.

• You mean the market’s still there.

SANTEE: It’s just a different market. Target Field we just opened this year. You know, [Target] came in early, they were involved in the design process. New Marlins is going out heavily for a [naming-rights] sponsor. It’s still there. We had Aviva Stadium in Dublin. I mean, it’s still there whether it’s domestic or internationally. It’s just a different market. It’s “Can I get a billion dollars in one place?” I think the culture of the naming-rights partner with the team and the facility has to be imbedded, they have to be connected. And if they’re not, it’s tough.

• Is it there at the collegiate level?

NIEMUTH: Yeah. We look at a deal, part of our [University of] Houston thing, is to look at the last 10 collegiate arena and stadium naming-rights deals and it’s just amazing how many of them were in the $100 million range. That’s big money.

• One of the themes you said earlier was recharging an old building. What are some of the things you’re able to do in the renovation stage right now that either catches owners’ attention or is really working in terms of renovating facilities?

ROSSETTI: Somebody said earlier that flexibility, being able to convert these spaces that were once just sectioned-off suites, when you can turn it into a big club, a huge club, a club with a couple of suites. … Also, the in-bowl loge products seem to be very hot right now. Most folks, we talked about this, try to get out of that box, the enclosed glass box and bring it down into the bowl. That’s real successful and it’s pretty easy to do because these things are just made out of concrete. It’s not real big surgery.

• What about the idea of nightclubs? You’ve got Orlando Amway Center, you’ve got Staples Center. These nightclubs that are open when there’s no event going on, extending the life of the facility, driving revenue.

ROSSETTI: Not too many successful ones.
We’re looking at Ford Field in Detroit, where we did the stadium and connected it to about a million-square-foot warehouse that had been Hudson’s Warehouse, an icon in Detroit, and they’ve still never filled it up. They’ve still got half a million square feet of vacant real estate in there and we’re looking right now at converting a big chunk of it into indoor tailgating for the event. There’s been sort of a resurgence of hip hop and dance clubs in the downtown core. It’s a very simple space; it’s warehouse space right now. No need to dress it up very much for the tailgating. You certainly don’t need to dress it up for a dance hall, so we’re looking at trying to get some of these dual uses out of the building. And in the hopes of creating some of that Wrigley Field legacy so the people have more of an allegiance to the building, so it’s not just the event-driven allegiance, but it’s non-event-familiarity. We’ll see if that works. It’s going to be kind of an experiment. Once in a while, you’ve got to take a few fliers.

• In Kansas City, you’ve got the Power and Light District that’s started to come together around Sprint Center. Just talk about ancillary development in general, where that’s headed, how the recession has affected that.

SANTEE: When you renovate a building, it’s all about the location. It limits your options. If you’re not downtown where people live, you’re going to have a hard time coming up with ideas that are going to be sustainable on a 365 basis. I mean, that’s just the way it is. Think about it: If you were to build a restaurant in a warehouse in downtown Pittsburgh on the south side, would it be successful? In two or three years, you’ll probably flip it and it’ll be something else. … Before I came to HOK/Populous, I did nightclubs. God, like every two years they flipped because they had to. They were trying to find some cachet to keep people coming and if they didn’t go, they flipped them to something else.

DIESKO: Everybody wanted to re-create Coors Field by putting a stadium somewhere downtown. It was just part of a downtown growing. It didn’t cause it, it just helped it and all that lower downtown stuff helped Coors. It was a symbiotic thing. It wasn’t caused by Coors being there.

ROSSETTI: Four or five years ago, the mentality was condos were so hot, retail was flying, office was OK, hotels were doing great. The ancillary developments were driving revenue that would help support a stadium or an arena in a midsize market. Nowadays it’s the opposite. They are expecting these venues to be the heater, the catalyst to drive revenue. And they do. Joe, I disagree with you a little bit on that, if you look at the increase in property values in almost two years from what Coors did in Denver, it was staggering. The driving up in property value all of a sudden had restaurants popping up, housing, the lofts; that LoDo area just really took off. Of course it’s symbiotic and they go hand-in-hand, but you’ll never have a loft project act as a catalyst for development like an arena or stadium will.

• Will people go downtown for an L.A. Event Center if Tim Leiweke’s plan comes to fruition?

DIESKO: I think so. It really depends on traffic. They gotta figure out how to get people in and out of there.

ROSSETTI: I think they are already used to it now. Staples Center has created an epicenter. L.A. had no depth to it and now it’s there.

• Do you think this project has a real chance of making it?

SANTEE: It’s Southern California, they live and die by the car. It’s not like the East Coast. Mass transit is not that crucial, even though it’s there. We did a building renovation at [Angel] Stadium in 1998, and what did they draw this last year, 3.6 million people, and you drive there. It’s kind of like Dodger Stadium; you drive to Dodger Stadium.

DIESKO: I work in downtown L.A. and live seven miles from there. It’s all about time, it’s not really about how far everything is. It’s about how much time it takes to get in there and get out and get back. In Kansas City, you can go to Target and back in 15 minutes. If you go to Target in L.A., and you live four miles away, it’s an hour or an hour and a half. You learn to manage your time. It’s not about the car or anything else, it’s about time. And it will take a lot less time for the big-money people to go to a game in downtown L.A. than it would be in City of Industry.

• All your firms are doing college work, and the big challenge is how to finance arena and stadium renovations. Bill, you have Husky Stadium, about a $300 million renovation. Talk about that project a little bit and what the challenges are there to finance. I know that was a big struggle for them.

JOHNSON: The thing I think is interesting, for those of us in the business, is that we had to take the project pretty far down the road to get quantifiable costs. What’s the exposure for the university before they were even willing to vote on it for final approval? All I can say is that they have tried to do it for long enough that I think they kind of knew and circled the threshold of pain [before] to the market. They came back and said, “This is absolutely all we can spend, this is all you can design toward, and by the way, you have to have enough of that work done so that we don’t misjudge this.” I think once they saw enough of the work and economized in certain places, they were able to go back and vote with confidence that they could get it done. There’s a few donors, too, that stepped forward. Those big projects in the college market are kind of rare because those are the challenges.

• What are your international clients asking you in terms of the buildings they see here to incorporate over there? In some respects, they’ve been on the cutting edge with technology such as access control. But in terms of the premium amenities, they are behind us.

ROSSETTI: Some of the work that we’ve done in Asia, there’s nothing around, so they like the most phenomenal iconic designs that really focused on buildings that set a precedent. Europe to me feels like where we were in the ’80s when our buildings were big concrete hulks, they were run by municipalities, owned by municipalities, terrible patron treatment and amenities. Yet most of the buildings in Europe are done by some superstar designer, they have beautiful aesthetics but they don’t work for shit. It’s a great opportunity for U.S. designers to provide fan comforts, introduce hospitality, the ROI issues we all talk about.

JOHNSON: It really depends, because it’s less about what we’re doing here in the States and more about what the culture is in the country you’re working in. The case in point with the work we’re doing in Iraq right now, and we’re also pursuing two more soccer stadiums there. That’s more emotional than it is about performance or cost or financing. Religion and the culture and the customs and traditions of Iraq are all in that. It’s not about the revenue or premium seating, that’s not really relevant. But it’s emotionally very relevant. Just to even do a very basic building for them is a symbol of civic pride.

SANTEE: I think the legacy project is the term we’ve coined for these types of projects. We’re doing Sochi, Russia’s [2014 Winter Olympics] stadium. It’s the same kind of ideas. You leave them what they need. The need is culture … every region is completely different. … What’s interesting about [2022 World Cup host] Qatar is there are a lot of fabulous-looking buildings. But I look at them and say, “Do they look like they belong in Qatar?” That’s what I question. Are they buildings of that community, sustainable, something that represents them long term, what they want it to be? I think it’s tough for us as designers that design stuff somewhere else and plop it down there and say, yep, this is good enough. I don’t think it’s good enough anymore, not in most countries.

DIESKO: Thirty-five years ago, we were all talking about toilet counts and sight lines. Now we talk about everything about revenue and the culture of what we do and the culture of America and the culture of football. It’s all kind of grown together, but you don’t just translate that to another country.

SANTEE: What’s interesting in Europe is they see these jobs as regeneration projects. In Iraq, it’s a regeneration of a country or a city. It’s not a one-project deal, it’s building housing, a transit station, everything else that makes it work. You look at the greenfield sites in China and Brazil and even India, it’s more than just that one building. It has to be, there’s nothing there. So we have to create a place for them.

• We didn’t talk about China. Is that the next great frontier? [Mich Sauers, Comcast-Spectacor senior vice president of business development] said China wants to build 1,000 arenas — smaller ones with 5,000 to 10,000 seats — in the next 10 years. That’s mind-boggling.

SANTEE: It’s definitely interesting. I’m reading a book right now called “Global Design,” and it’s not about architecture as much as it is about all the stuff that connects design to the world. Us Westerners think of ourselves of being at the forefront of all these things but we’re not. It’s pretty damn interesting how the world is changing around us and without us. They’re kind of doing their own thing. If you work in China or Japan, the famous thing is they get you in there and you work with a certain design institute and then they kind of all say well, we can do the design ourselves, we’ve learned from the Americans, we don’t need you anymore.

• So you’re saying you will get shut out of that work?

SANTEE: We’re doing work in China, but it’s not the panacea that you may think it is. It’s different politics, different culture, what they expect from us is different.

• Back over here, what are teams telling you regarding developing a facility that can last 50 years instead of the traditional 30-year lifespan? Is that a concern? Do teams think about that at this point?

DIESKO: Cities are requiring LEED certification more and more. In California, you don’t even think about it, you’re going to have to do it at some high level, silver or gold. LEED revolves around sustainability, reusability of materials. Whether owners want it or not, you have to do it.

FARHA: I think it’s possible. It’s just a lot of hard work that you have to do up front to make good sound decisions from a materials standpoint, equipment, flexibility, all the things we talked about in the course of this discussion. But it’s certainly possible to do that. You have to plan along the way for some major renovations, similar to what Madison Square Garden is doing. It’s almost 50 years old from its first build to now. It’s probably close to that.

PACI: We are going through a major, major renovation [at MSG], changing the rakers in the upper bowl; the whole upper bowl will be demolished. We’re keeping the circle of the building the same; we’re not expanding the footprint. But we’re trying to get everything accomplished we can by redesigning the upper bowl. But it’s a major thing in keeping it open for the Rangers and the Knicks.

DIESKO: But it’s not because of concrete wearing out or something’s leaking. It’s because they need to make more money. It’s back to the revenue. People say you design these buildings for 20 years and then you throw them away. We don’t throw them away and we don’t design them to be thrown away. We’re renovating Cal Memorial Stadium, it’s 87 years old, and if it wasn’t for seismic reasons, we probably wouldn’t be doing it, it would be another 87 years. So they’re taking advantage of the fact that they have to because it sits on a fault.

JOHNSON: Owners are now more accountable and more of their money is invested and they are more savvy about what they want. I think what will drive the ultimate lifespan of the buildings is how much flexibility and how nimble they can be in the marketplace. Because honestly, we’re not building as many permanent walls or trusses that have to be taken down and redone. We’re building as much flexibility in as possible, because they want to be able to be agile enough if the market changes in 10 years and all of a sudden people want loge boxes and not suites, they can move and adapt to change. That’s going to ultimately drive the life of the building. It’s not the construction or even the sustainability, although I think that’s really important and we have a responsibility to put that agenda out there.

DIESKO: We need to think about this as the right solution at the right time, but they are still going to renovate buildings, they never stop. Look at airports, they continually add gates, move concessionaires or different ways of taking tickets. Everything about it evolves.

PACI: Look at the Kansas City Chiefs. Classic bowl inside, great seats, great sight lines. It was built [in the ’70s]. If you have a good structure, good bowl, good sight lines, it can last as long as you want.

• Jon, you had a part in designing Matthew Knight Arena [at the University of Oregon], which has no suites. Is there flexibility to add premium if the demand is there?

NIEMUTH: It goes back to some of the conversations about what do you value in the experience, and for them at that building, the last 50-plus years going forward they were a basketball school and that’s what they wanted to be about, was basketball. They understood what their pinch point was with premium seating, they knew what their incrementals were and how much revenue they could extract. Suites didn’t pay for themselves financially, but it also compromised the character of what they were leaving [McArthur Court] and what they were moving into, and they said it wasn’t worth it. I’m not saying we didn’t look at them, I’m not saying we didn’t look at it for a long time. But it was never a huge number, it was always six, seven, eight, 10 for a 12,500-seat building. It was a relatively small amount.

DIESKO: [Galen Center, an HNTB project] was designed to put suites on both sides. The donors weren’t that interested in suites at all. USC said our donors don’t really want a suite, they don’t want to have to manage the tickets. They don’t really come to invite their friends up to a suite. Put them in and we might use them for sponsors and stuff and we’ll build half of them.

NIEMUTH: On a Tuesday night in Eugene, who’s going to use a suite? I think that’s where the culture of football and basketball are so much different. Football is still very much a cultural event. They come Thursday, Friday and Saturday and they might make it home by Sunday or Monday. But basketball event days, Tuesday, Wednesday, Thursday nights depending on where your people are coming from … I think there’s a practicality in the collegiate market that you have to really get your arms around that the leagues don’t have to deal with. It’s a population center, it’s a corporate amenity, it’s a personal amenity. Very few companies can truly write off the value of that suite in a collegiate environment. Is it a trend, I don’t know. It was right for them, but it may not be right for everybody else.

• Bill and Earl, how do we build these sports facilities cheaper? Your firms each had a role in developing a billion-dollar stadium. What’s the answer?

SANTEE: If the client wants it cheaper, I’ll give them a cheaper building, but if the client wants to spend a billion dollars, I’ve learned over 20-some years that I can teach him how to spend his money and I think I spend it pretty well. So it really depends on what they want to try to accomplish.

DIESKO: What works best is having the right expectations for the right amount of revenue you want to produce, but how do you get there? Some clients just think they’re smarter than everybody. If it was only me running the world, everything would be $100 million cheaper, so you spend a lot of time showing what they get for their project and then, well, “We want this though.” Sometimes we’re the bad guys just because we’re there, not because of what we do. It’s just about expectations. Right now, everybody thinks they can build a building really cheap, but labor’s still going up and that’s half the price of a building or more. Materials have gone down but they’re starting to go back up again. We’re bidding a whole bunch of stuff and prices are starting to grow.

JOHNSON: I think owners perceive it, and I certainly do as we look at the challenges of spending the money the right way, all these venues are under siege right now because as we get our superflat HD, 3-D [televisions], opportunities to stay in our own living room with our own home theater and watch the games, the bar continues to go up. What makes it a great experience to come out? The NFL has been really clear about this, is we have to offer an experience that’s second to none, to get the fan experience back to what it should be. … We may start to see these buildings try to not do everything like what we’ve been trying to do for a while. We’re going to start doing less and do it better. So maybe we don’t have the over-the-top kids areas or the over-the-top shopping and eating experience. Maybe it all goes back to the basics, what the venue is really set up to do.

PACI: What about smaller facilities made for TV? You would never do a long [camera] shot, you would have 35,000 people at an NFL game and all they would shoot is the lower bowl, with sound enhancements. That’s ultimately what could happen. There’s nothing worse than in baseball when a guy hits a home run and nobody’s running after the ball because there’s nobody there.

SANTEE: So buildings are getting a little smaller and they’re becoming more customized, but they’re just getting smaller.

DIESKO: Those last 10,000 seats are the most expensive to build … and the hardest to sell.

NIEMUTH: I think it’s interesting on the capacity thing, though, because I think that’s pro exclusivity … eventually the BCS money will find its peak as well. Any school that’s moving around … TCU is a group that’s going through a major expansion, they just announced their alignment to the Big East. Anybody in that conversation right now wants to talk about, show me 50, 60, 70, 80, 90 and then maybe 100 [thousand seats]. They don’t want to talk about 40,000 seats. They want to say, “I need a plan. If I’m starting off at 60, you need to show me how to realistically get to 70, 80 and 90,000 seats.” The NFL is not talking about that — [those stadiums have] 67,000, 65,000. It’s a totally different mind-set. If you open a collegiate stadium now for a major big-time school and you said the best I can do is 60,000, you would probably never do another project again.

• If you’re TCU and you’re not a major brand on the college landscape, why would you go out and build 70,000, 80,000 seats? They’re not Texas, where people are going to come regardless. They are not that brand.

NIEMUTH: That’s the interesting thing. You’ve got high schools building 40,000 seats in Texas. That’s Mars in terms of football. It’s kind of like Vegas, you can’t really apply good economics to the state of Texas because they don’t work other places.

DIESKO: Part of what you’re doing is satisfying a lot of people that complain to the AD that they can’t get a ticket. It’s a combination of things that’s driving it in the collegiate market. Like I said, every donor group has a different culture, a different history. It’s just not the same in colleges as it is in the pros.

NIEMUTH: Michigan Stadium … it’s suites and clubs and improved concessions, but it’s not like Cowboys Stadium or New Meadowlands or Lucas Oil Stadium. That’s the other thing you don’t see, the age of opulence [in colleges]. It’s amenities, but it’s well-adjusted amenities.

CAHILL: It’s interesting at Michigan, for the opener we were in a big club space, and for kickoff, everybody was sitting outside. There isn’t anybody in the club. If you were to go to a pro stadium, a lot of people sit inside.

• Matt, your firm has been doing some NASCAR work. At what point do you maybe see some of those facilities start to downsize to fit the market? Has there been any talk of that among the two major groups out there?

ROSSETTI: No, the biggest focus for them is how to corral this hospitality component. At [Michigan International Speedway], we put a new building in the infield and made it part of pit row, so it goes back to that idea of engaging the patrons that are spending all their money either in the suite, club or restaurants, let them wander through pit row.

SANTEE: You know what’s amazing about the sports business: In spite of all the economic downturn we’ve had, the leagues have seen a fairly minute reduction in their attendance, 5 percent, 10 percent. It’s almost like there’s kind of a placeholder, that once times get better, people will come back and try to exceed some of the record attendance over the years. … The one thing that’s got me most interested and I still haven’t figured out how to deal with it, or how to think about it, is really the sign of technology and its impact to the in-game experience. I don’t know how to answer that question.

• At Prudential Center, you can now rent iPads during the game and the Devils have a social media hub with desktops built into a kiosk. Where do you see the role of social media in the whole in-game experience?

SANTEE: I was at the Dolphins-Bears game and got to use that little device [FanVision] that Steve Ross owns. I’m still a fan, so it’s hard ... you’re doing this, then that, wait, I missed all that [action]. It was interesting to do. Could I do it for 10 event days a year or be that active with it? I saw some people use it who were older, they had earphones and they were in the game, completely. It has 10 different camera angles, you’re inside, whether the guy made the catch, had his feet inbounds, before the ref has a chance [to see it on replay].

DIESKO: They’re also telling us in a couple years, it will be light years ahead of that. Right now, we’re in the dark ages … they’re going to be so fast, 100 megabytes per second instead of two.

SANTEE: We’re definitely in an electronic transition. I have a BlackBerry, but I also have a Sprint 4G phone and an iPad and a laptop. Guess what I didn’t bring today? My laptop. Our business depends on people still coming and watching the event.
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