July 3 (Bloomberg) -- Jordan Miller paid $21 for an upper-deck seat to see his hometown Washington Nationals, and didn’t spend a minute there while they played the Baltimore Orioles. Instead, he socialized with 10 friends just beyond the outfield fence in a sports-bar atmosphere.
“When you’re in your seats, you can only interact with the people next to you unless you interrupt everyone,” said Miller, 24, who works at an animal hospital and lives in Fairfax, Virginia. “Here, you can have a conversation with all your friends and watch the game and move around. It’s the whole social aspect.”
From the Nationals and the Washington Redskins to the Kansas City Royals, who host baseball’s All-Star Game next week, teams are squeezing more money out of their stadiums with standing-room-only areas. They can generate as much as $735,000 in new revenue for a big game from the tickets, concessions and parking that might otherwise go unsold, executives said.
The concept increases the value of cheap seats as teams run out of ways to make more money out of the premium locations, said Thad Sheely, the former New York Jets vice president for stadium development and finance who left to start GridWorks LLC, a real estate development company in New York City.
“Club seats, suites, skyboxes, field-level suites, we’ve gone through every permutation of how to put a premium on it,” Sheely said in an interview. “But not every permutation on how to put a discount on it.”
Some teams provide televisions and tables for fans to gather around, while others have views of the field. At Nationals Park, the outfield is just below the Miller Lite Scoreboard bar, the crowd noise is real and a home run ball could interrupt a conversation. Fans can watch the game on TV or walk to the rail and see the game from the perspective of an outfield seat.
Standing areas are more popular with fans in their 20s and 30s than older spectators, who appreciate sitting down to watch the game, teams say.
“You’ll look at the park and see lots of empty seats, but they’re back here listening to music, meeting friends and just having fun,” said Nationals Chief Operating Officer Andy Feffer. “They come to the park earlier and stay later because it’s a better entertainment experience.”
Revenue from food and beverage has quadrupled since the Nationals renovated the Miller Lite Scoreboard Walk with new outfield concession and entertainment areas last year, Feffer said, without revealing figures.
The National Football League’s Dallas Cowboys took a cue from how spectators socialized in the infield at the Kentucky Derby, said Jerry Jones Jr., son of the owner and executive vice president and chief sales and marketing officer.
“If you go to the Derby and look at the infield, there is just a big cocktail party going on with people around tables,” Jones said.
When their $1.2 billion, 80,000-seat stadium opened in 2009, the Cowboys began selling $29 tickets to standing-room-only areas. Fans buy food and drinks, watch the game on high-definition televisions or walk over to the railing and look down on the field or up at the 72-foot by 160-foot video board. The Cowboys sell 5,000 to 15,000 tickets in these areas per game, Jones said in an interview. That earns the team an added $145,000 to $435,000.
Add in an average of $20 per person for concessions, memorabilia and parking, Sheely said, and a strong turnout could generate another $300,000.
The Kentucky Derby sold about 110,000 general admission tickets for $40 to $50 that didn’t come with seats for this year’s May 5 race, according to Churchill Downs spokeswoman Courtney Norris. Concession sales figures weren’t available.
Major League Baseball says it has sold about 2,000 standing-room-only tickets at $307 each for a three-day pass leading up to the July 10th All-Star game at Kauffman Stadium in Kansas City, Missouri.
Sports teams are taking advantage of how young people socialize today, said Greg Sherlock, a project designer and principal at Kansas City-based Populous, which built the Baltimore Orioles’ Camden Yards, Yankee Stadium in New York, Heinz Field in Pittsburgh and the main stadia for the 2012 London Olympic Games.
“We are ganging together, connecting through Twitter, Facebook, e-mail and broadcasting makeshift social gatherings,” Sherlock said. “It’s fun to announce on Twitter that there are going to be a bunch of friends meeting in a particular spot in a venue and it spontaneously happens. That’s the change in the way fans experience the game today compared to probably as little as five years ago.”
Such areas are not new to sports, he said.
“Some of the earliest settings for baseball were nothing more than standing-room areas just gathered around the field,” Sherlock said. “These random standing areas have been fundamentally there since the game started.”
The Washington Redskins will carve out standing-room-only areas at FedEx Field in Landover, Maryland, eliminating about 4,000 seats.
Initially intended for people who have season tickets to meet up and socialize, tickets may later be sold to non-season ticket holders for big events, such as a playoff game, when demand exceeds the stadium’s 85,000 capacity.
“There seems to be a trend in sports for more areas to congregate, watch the game, drink beer and a lot of people like to stand instead of sit,” said Mitch Gershman, the Redskins’ chief marketing officer.
The Green Bay Packers are renovating their stadium and plan to include standing-room areas, and the St. Louis Rams recently proposed renovating their stadium with expanded concourses, luxury amenities and standing-room party zones. The Rams’ $700 million renovation plan was rejected by the St. Louis Convention & Visitors Commission, the authority that runs the stadium.
Annette Devereaux, 23, had no interest in watching the Nationals play the Orioles from her $15 seat at the top of the park. It was a Friday and, like Miller, Devereaux was meeting friends. From her viewpoint beyond the outfield wall, she was much closer to field level than her ticket would have allowed her in the upper deck.
“There’s no reason to go to my seat,” she said. “My friends are here. We’ll spend the whole game here.”
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