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Volume 22 No. 18
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AEG converting dining space at Staples into two loge-style seating products

Staples Center is getting rid of the “squatters” taking up valuable real estate in its San Manuel Club.

AEG, the arena’s owner and operator, is introducing two new loge-style seating products in October for the 2013-14 season to generate revenue in a portion of club space previously reserved for sit-down dinners for suite and club-seat holders.

Table and lounge areas expected to generate revenue for AEG.
Image by: GENSLER
The arena’s new Premier Tables and Premier Lounges are ticketed spaces designed to generate premium-seat revenue in the club’s dining space where there was none before. The San Manuel Club is situated on the first suite level at stage end on the arena’s north side.

In the past, many patrons sat there for the entire game after finishing dinner, said Lee Zeidman, Staples Center’s senior vice president and general manager. In addition, the space was largely used by VIPs getting free passes from the teams.

“We weren’t seeing a return on investment,” Zeidman said. “There were not a lot of [changeovers] for dinner.”

The two new products, which will be separated by design, have four-seat configurations hugging the rim of the lower bowl. The Premier Tables start at $165,000 annually and the Premier Lounges at $150,000 a year. Terms are three and five years.

Patrons get four season tickets to all Los Angeles Lakers, Clippers and Kings games, plus food and drink, including beer, wine and soda, for all games. Hard liquor is a separate fee.

Both products have 27-inch televisions in front of the tables, lounges and charging stations for mobile devices. The right to purchase concert tickets elsewhere in the seating bowl for stage-end concerts and parking passes are tied to the packages.

One hundred new seats are distributed among the 18 Premier Lounges and seven Premier Tables. Selling all 100 seats would produce more than $4 million in new revenue, said Mike Tomon, AEG’s senior vice president of premium sales for global partnerships. The arena’s three tenants will receive a portion of that income, Zeidman said. Construction costs are $1.4 million, and the new lounges should open by Oct. 18.

In doing their research on the retrofit, AEG officials saw what other major league arenas have done over the past five years to replace unsold suites with smaller theater boxes and loge seats.

At Staples Center, though, empty skyboxes are not an issue. AEG expects to sell all 150 suites this season at $300,000 to $500,000 a unit, Tomon said. This marks the fifth consecutive season Staples Center has sold all suites after eliminating eight units in 2009 to build the Hyde Lounge.

AEG focused on the San Manuel Club to develop a midpriced product, which it can use to potentially upsell patrons to a full suite in the future, Tomon said.

Teaming with Gensler, AEG’s architect of record, arena officials redesigned a portion of the club, keeping the remaining two-thirds intact for sit-down dinners.

AEG plans to start selling the new inventory in early October, starting first with the firm’s corporate partners before going to the public, Tomon said.

AEG expects to generate a total in the low nine figures for premium seat revenue for the 2013-14 season, the highest number in the arena’s 14-year history, he said.