SBJ/Feb. 8-14, 2016/Champions

Chairman grows Delaware North to $3 billion empire

Jeremy Jacobs is fondly known as “The Chairman.” His employees, even his grown children, often address him by that term. It speaks to the titles he holds for both Delaware North Cos., a leading sports hospitality firm, and his position as head of the NHL Board of Governors. It also speaks to the respect and stature given a man who’s grown a family-owned business into a $3 billion empire in Buffalo over the past 48 years.

The Chairman has steered a global brand whose reach extends beyond sports into airport concessions, national parks and tourist attractions such as the Kennedy Space Center. Jacobs took over Delaware North at the age of 28 after his father, Louis, died unexpectedly in 1968. At the time, Sportservice, Delaware North’s sports concessions group, had food deals in baseball with the Chicago White Sox, Cincinnati Reds, Detroit Tigers and St. Louis Cardinals. Two years later, in 1970, the vendor added the Milwaukee Brewers, who started play that season at old County Stadium.

Under Jeremy Jacobs’ leadership, Sportservice has retained four longtime MLB team deals and added more than 20 other big league teams.
Photo by: JIM COURTNEY
Remarkably, nearly 50 years later, all five teams remain Sportservice clients, spanning multiple owners and ballparks in those respective markets. It’s a testament to the loyalty and trust they place in Jacobs and his century-old company that prides itself on its long-standing relationships in sports.

“Companies have merged and bought other firms and have done all kinds of things, and Sportservice has always been Sportservice,” said Peter Luukko, executive chairman of Sunrise Sports & Entertainment, parent company of the NHL’s Florida Panthers. “I admire how they have continued the family business. I really think that’s special.”

Under Jeremy Jacobs’ leadership, Sportservice has expanded its presence across the big leagues. In baseball alone, where the Jacobs family laid the groundwork for its legacy, Sportservice now has 11 MLB deals, including SunTrust Park, the Atlanta Braves’ new facility opening in 2017. It’s added high-profile NFL venues Lambeau Field, MetLife Stadium and CenturyLink Field, among others, and overseas, iconic Wembley Stadium and the Sydney Cricket Ground. The
DELAWARE NORTH COS.

Founded:
1915
Headquarters: Buffalo
Revenue: $3.0 billion
No. of employees: 60,000
No. of contracts at major league venues: 25
Services: A global food service and hospitality company that also operates in the lodging, sporting, airport, gaming and entertainment industries.
Leadership: Jeremy Jacobs, chairman; Jeremy Jacobs Jr. and Lou Jacobs, co-CEOs; Charlie Jacobs, CEO, Boston Holdings
Singapore Sports Hub, which opened in 2013 and includes a 55,000-seat retractable-roof stadium, is one of its newer deals.

As the retail side of sports business has exploded, so has Sportservice’s merchandise operations. Across the big four sports leagues, the company runs team stores at many of the same arenas and stadiums where it holds the food contracts.

In 1975, at age 35, Jacobs made the leap to team ownership when he bought the Boston Bruins and the old Boston Garden. Twenty years later, he helped get TD Garden built in Boston, a $160 million arena that Delaware North partially funded. Over the past two decades since the arena opened, the company has privately invested almost as much money in renovations ($130 million) to keep TD Garden on par with newer arenas. It serves as the beta site for Sportservice’s new food service programs and technology before the company rolls those initiatives out to its other clients.

These days, the future is mixed use under Jacobs’ tutelage. Over the past decade, his three sons — Jeremy Jr. and Louis, both co-CEOs of Delaware North, and Charlie, CEO for Delaware North’s Boston Holdings — have taken a bigger role in helping their father grow the company. Two weeks ago, Delaware North, in a partnership with developer Boston Properties, broke ground on The Hub on Causeway, a development next to TD Garden. The $950 million project covers residential and office towers plus Champions Row, an entertainment complex.

Separately, Delaware North has formed a joint venture with Larry Tanenbaum, co-owner of Maple Leaf Sports & Entertainment, to build a gaming and resort destination in Ontario. The project is in the early stages of development, according to Tanenbaum. Twenty years ago, Jacobs was the first NHL owner to interview Tanenbaum at the time he went through the process of buying the Toronto Maple Leafs. Since that time, they’ve become good friends and have enjoyed each other’s company inside and outside of hockey’s boardrooms.

“We’ve had a long relationship in the hockey world and now we join together in the business world,” Tanenbaum said. “He’s built [Delaware North] with a great culture. It’s about hard work and focus and giving back to the community. He’s been spectacular in that point.”

Both developments further cement Jacobs’ legacy across North America. “He’s never been one to be in it for the short term,” said Wendy Watkins, who from 2000 to 2015 served as Delaware North’s vice president of corporate communications. “We used to joke internally, while many people are getting up to the starting line for the race, he’s already crossed the finish line. He has this uncanny ability to see into the future and predict the road that, either his own organization needs to take, or the sport [of hockey], to ensure success. I think that’s unique with the leader category as a whole.”

Jacobs’ father, Louis (right), founded Delaware North with his brothers Marvin (left) and Charles in 1915.
Photo by: DELAWARE NORTH
It all started with baseball.

The Tigers have been a Sportservice account dating to 1930 at old Navin Field, an amazing run considering how much the industry has changed over the past nine decades. The Reds came next in 1936, followed by the White Sox (1945) and the Cardinals (1953). Those four deals were first negotiated by Louis Jacobs, who launched the family business as a peanut vendor in 1915. In a 1972 story in Sports Illustrated, the magazine referred to Louis as the “Godfather of Sports,” detailing how he helped bankroll the Reds in the early years of their partnership.

The Chairman has strengthened those ties over the years. “He treated these contracts with a religion,” said food consultant Michael Thompson, Sportservice’s president from 1984 to 1996. “It was something his father grew up in and Jerry cherished those, as seen today. He’s got some of the oldest contracts still in place in the history of concessionaires.”

On Chicago’s South Side, Sportservice has been the only general concessions provider Jerry Reinsdorf has dealt with since he bought the White Sox in 1981, a 35-year stretch spanning U.S. Cellular Field and old Comiskey Park.

“It’s always been Sportservice, which tells me they must be doing a pretty good job,” Reinsdorf said. “We always know they’re going to do exactly what they say they’re going to do. Obviously, issues arise but we’ve always been able to get everything to work out. It’s a tone that [Jacobs] sets with his people, that their word has to be good and they have to deliver on their commitments.”

In Milwaukee, MLB Commissioner Emeritus Bud Selig signed his first deal in sports with Sportservice in 1967. The White Sox played some exhibition games at old County Stadium in the late 1960s and Selig was on his way to buying the old Seattle Pilots and moving them to Wisconsin. He flew to Buffalo and struck an agreement with Louis Jacobs in the airport basement. One year later, after Louis died, Selig started doing business with Jeremy. The relationship continued over Selig’s 35-year run as the Brewers’ owner, stretching to Miller Park, which replaced County Stadium in 2001.

“It’s interesting, you meet a lot of people in life and you go through things, and here we have this long relationship,” Selig said. “Look, I was not always easy. I would call Buffalo a lot, especially late at night. They always responded and got used to my bitching and whining. They were really good, and after awhile, I grew to understand that. They [were] great partners and I give Jerry that credit.”

Bill DeWitt Jr., the Cardinals’ chairman and CEO, has enjoyed a relationship with the Jacobs family for over 50 years, dating to when DeWitt’s father owned the Reds from 1961-67. The DeWitt family bought the Cardinals in 1996, and since that time, Sportservice’s competitors have come knocking on their door to try to capture a business that’s gone far beyond hot dogs and beer to sophisticated catering in premium spaces. Instead, the team and Sportservice have expanded their partnership. Over the past decade, the Cardinals have signed the vendor to run the food service for their minor league clubs in Memphis, Springfield, Mo., and Jupiter, Fla., the team’s spring training home.

In St. Louis, across the street from Busch Stadium, their relationship extends to 3-year-old Ballpark Village, where Sportservice runs Cardinals Nation, which includes a year-round restaurant and a rooftop deck sold as a ticketed space for Cardinals games. For Delaware North, it marked the first time in its history that it had gone outside the four walls of a sports facility to run a food destination with connections to the primary venue. Those additional accounts at the minor league level and Ballpark Village reflect a strong sense of loyalty on both sides, DeWitt said.

“I think a lot about their operation and it starts with Jerry,” he said. “They’re very sensitive to the teams’ needs and how to connect with the fans. We get great feedback from our fans on concessions and we are in constant dialogue with Sportservice. They’re always trying to get better.”

The next Jacobs generation leading Delaware North: from left, Charlie, Jeremy Jr. and Louis at The Hub on Causeway construction site.
Photo by: DELAWARE NORTH
Thompson has unique insight into the Jacobs family and Delaware North’s growth over the past 40 years. Thompson spent 23 years with the firm, including a 12-year tenure as Sportservice president. Thompson observed Jacobs as a man who would “eat, sleep and drink” the business. On several occasions, Thompson would get a late-night phone call from Jacobs while The Chairman was watching a Bruins game, wanting to know how Sportservice did that night at old Busch Stadium in St. Louis.

In Buffalo, the two would convene in Jacobs’ office for weekly meetings to review financial results, prepare business strategy, discuss the pitfalls they would encounter and how they could turn those deficiencies around. Jacobs took an aggressive approach to growing the business and there was nothing he shied away from to reach that goal, Thompson said. Jacobs had a penchant for detail. He wanted to know the cost of everything. If it was hot dogs, Jacobs wanted to know how much Sportservice was charging, where the margins were and how the commission rates were structured.

“He would always try to understand what our proposals were going to be and how to make them better,” Thompson said. “To me, it was remarkable to sit there and watch. Today, we would call him a titan in this industry, but this is when he was [in his 30s]. You begin to understand where he wanted to take this company. It was one of those unique experiences for me to be around him, to watch him guide that ship and watch the changes that it took to make that happen, in and out of different businesses.”

The nautical metaphor is appropriate. During the NBA lockout in the late 1990s, Jacobs agreed to spend $1.2 million of his own money to rent the Norwegian Majesty cruise ship for a weeklong cruise to Bermuda as compensation for TD Garden suite holders, season-ticket holders and sponsors. As part of the excursion, retired Boston sports alumni such as Bob Cousy, Gerry Cheevers and Dick Radatz were on board to entertain 1,400 arena stakeholders. It’s a clear example of Jacobs understanding what it takes to retain his customers’ business.

Rich Krezwick, TD Garden’s former president and CEO, came up with the idea of an all-expense-paid cruise. He suggested to Jacobs it would be a nice gesture for their best customers after repeated lockouts in the 1990s, culminating with the 1998-99 work stoppage reducing the NBA season to 50 games.

“You wouldn’t really see him as much of a marketer because he doesn’t have that persona, but he got it immediately,” said Krezwick, now AEG Europe’s senior vice president of facilities. “He attended and hosted, graciously. There aren’t many times in our business that you can spend $1.2 million on a promotion. It was a career highlight for many of us. I think relationships are a very important aspect of the Delaware North operating mentality and that stems from The Chairman, who personally has many long-standing relationships, and speaks well to it being a family business.”

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