Wow, big news from the Yankees this morning. Apparently, George and Jerry Jones have teamed up to form a hospitality company that will compete in concessions with foes like Aramark.
In April, it was reported that Centerplate, which had previously run concessions at Yankee Stadium, had lost the bid for the new Yankee Stadium to Legends Hospitality, though at the time it was unclear what exactly Legends was. Centerplate reportedly pulled in an estimated $70 million in annual revenue from its contract with the Yankees. The company's stock plummeted after news of the Yankee Stadium deal was made public. Centerplate was bought by private equity firm Kohlberg & Co. for about $200 million in September.
This reminds me of the landmark merger of the Yankees and the Nets to launch the YES Network. At the time, one of the reasons that the teams merged was to give them better leverage over their own broadcast rights, with the belief that they would get a better deal if they negotiated the rights to both teams together. Sounds like they are applying the same strategy in forming this hospitality company. By taking over the $70 million in revenue that Yankee Stadium concessionaire Centerplate was hauling in, and also taking over the revenue from the Dallas Cowboys concessions, George Steinbrenner has again transformed the way a real sports franchise business is run on a corporate level.
Here is the press release from Legend's, found on BusinessWire.com:
The New York Yankees, the Dallas Cowboys, Goldman Sachs and CIC Partners today announced that they have founded Legends Hospitality Management, LLC (“Legends”), a new company that will offer a broad range of sports business services. Legends’ initial focus will be on operating catering, concessions, retail merchandising and other facility management enterprises for major sports and entertainment facilities.
Led by Michael Rawlings, former President of Pizza Hut, Inc., Legends will offer differentiated solutions to create innovative, high-quality stadium experiences for fans.
George M. Steinbrenner, Chairman of the New York Yankees said, "This partnership brings together two of the finest sports franchises and creates a business that will take advantage of their tremendous insight and expertise. No one knows their fans better and has a greater interest in providing them a great game-day experience. With both the Yankees and the Cowboys moving into new stadiums next season, this is certainly the right time to rethink our approach. Beyond that base, we are confident that other facilities and teams will be interested in what Legends can offer. I look forward to building a business with Jerry."
Jerry Jones, Owner and General Manager of the Dallas Cowboys, stated, “Fans are increasingly voicing their opinion that they want and deserve more from a stadium experience – they want a winning team, but they also want a venue that truly complements the game and elevates the experience. We couldn’t agree more. Legends was founded on the principle that enhancing the stadium experience will result in a more satisfied fan base. Satisfied fans attend more games and show greater loyalty to their home team, which ultimately benefits franchises, players and their communities.”
“The old model of stadium concessions is broken,” stated Hal Steinbrenner, Co-Chairman of the New York Yankees. “Fans want and deserve a better experience for their sports entertainment dollar. Working with Legends to leverage the talent and experience resident in the Yankees’ and Cowboys’ organizations will enable us to set a higher bar for sports franchises while delivering greater value to fans. When the new Yankee Stadium opens for the 2009 season, our fans will be able to experience first-hand the enhancements to our menus, concessions, retail operations and fan spaces that Legends has overseen.”
“Our focus is on the fans,” said Stephen Jones, Chief Operating Officer of the Dallas Cowboys. “From a casual dining experience to feeding large crowds in mass quantities, or from selling the latest fan fashions at our specialty retail shops, our service delivery systems will be engineered to enable us to deliver quality services."
Mike Rawlings, Chairman & CEO of Legends, added “Quality is the hallmark of the Legends brand, and I am confident that the team of experienced professionals we have assembled will set the highest standards of quality and service in the industry. We are thrilled to be partnering with the New York Yankees and Dallas Cowboys – two teams with reputations for innovation and value creation – as we create a new paradigm in sports concessions that will deliver unparalleled and affordable stadium experiences for fans.”