Atlanta Falcons Cut The Prices For Their Stadium Food, But Is It Working Out?
ARI SHAPIRO, HOST:
It's so inevitable that it almost feels like a law of physics; the price of hotdogs and beer at stadiums goes in one direction, up - except, maybe, in one place - Atlanta. Last season, the Atlanta Falcons brought the prices of food and drinks way down. Nick Fountain from our Planet Money podcast went to a game to find how that's working out for them.
NICK FOUNTAIN, BYLINE: The first question I have is, have people even noticed? So I ask the first person I meet, Zena Smarr (ph), tailgater.
Can I talk to the grill master real quick?
ZENA SMARR: (Laughter).
FOUNTAIN: I asked Smarr, have you noticed that the food is cheaper? And she's, like, oh, yeah.
SMARR: Much cheaper.
FOUNTAIN: But she's not buying more inside.
SMARR: Old-time tailgaters, you know, we've got to tailgate. So by the time we go in the game, really, we're full.
FOUNTAIN: Stadiums, like airports and movie theaters, are captive markets, places where one seller has a monopoly and no one can undercut them, which leads to high prices and also some workarounds.
Did people use to sneak in more food?
SMARR: I don't know about the food.
FOUNTAIN: Like - oh.
SMARR: Now, the alcohol (laughter).
FOUNTAIN: If you're like me, you probably thought the reason stadium food prices are so high is because the teams just want to wring every penny out of fans. But that's only half true. I head up to the front office to meet Rich McKay, the president of the Falcons. And he tells me the way stadium food usually works is teams hire a food company to do everything and then have almost no say after that.
Could you complain about - I don't know - warm beer?
RICH MCKAY: Yes, you can complain. That's all you do is complain. You don't - it's - nothing happens as a result of it.
SHAPIRO: The reason is big multinational companies compete for these contracts. And the bidding gets intense. The company that wins usually ponies up millions, sometimes tens of millions of dollars upfront and then splits the revenues from the sales with the team. And so, according to Greg Beadles, the COO of the Falcons, before a single Bud Light is even poured, those companies have dug themselves into a big hole.
GREG BEADLES: So for them to get their money back, there's only two sides of the balloon left to squeeze. And it's food quality; let's buy the cheapest food that we can. And let's charge as much as we can. And maybe, like, you know, a third is labor; let's have as few people as possible to make all of this happen.
FOUNTAIN: That's why it takes so long to get a hot dog. That's why the hot dog costs so much, and that's why it might be cold.
BEADLES: That's right, exactly right.
FOUNTAIN: Not too long ago, the Falcons were building a new stadium. And they were rethinking everything, including ticket prices, which they raised. And they thought, why don't we rethink food a little bit? And so they got rid of the whole revenue-share model. Now they get to control food and beverage - the quality, the number of cooks and the prices. And they've dropped prices a lot. Like, they sell $2 hotdogs, $5 beers and $2 sodas with unlimited free refills.
UNIDENTIFIED FANS: (Cheering) ATL.
FOUNTAIN: How's it working out? I head up to the nosebleeds past this guy...
UNIDENTIFIED VENDOR: I got the cold beer. You tell everybody, I've got the cold...
FOUNTAIN: ...And meet David Collins, plate full of snacks.
DAVID COLLINS: Hopefully, we can pull it out. But the defense, man - we got to get better on defense. Oh. And as I say that, we got a pick - yes. Woo. (Clapping). Woo. That's why I love these guys, man. That's why I came here, to watch this.
FOUNTAIN: Collins came all the way from New Jersey for the game. He's a big Falcons fan, sees them when they play in Philly.
COLLINS: My brother's an Eagles fan. They suck. I go to the games with him. And last time they played in Philly, it was ridiculous. Like, I paid, like, almost $40.
FOUNTAIN: On what?
COLLINS: On just beer, a burger and, like, popcorn. It was ridiculous.
FOUNTAIN: And today you have - what? - a burger, fries and a soda - a big soda?
COLLINS: This is the second time I actually bought food. Like, I've never bought more than food one time at a stadium. I love it. I love it.
FOUNTAIN: The Falcons have blown through their sales expectations. They're selling 53 percent more product than at the old stadium. And other teams have noticed - big teams, like the Ravens and the Lions. They're dropping prices, too. The one regret the Falcons might have is the free refills on soda thing, as evidenced by Collins.
How many refills did you do today?
COLLINS: This is the second one.
FOUNTAIN: The second one and there's still a lot of game to go. Falcons fans are refilling their sodas, on average, 3.7 times. The Falcons say that, at that rate, they'd be happy if they're even breaking even on soda.
Nick Fountain, NPR News, Atlanta.
(SOUNDBITE OF LOUIS LOGIC'S "STREET SMARTS") Transcript provided by NPR, Copyright NPR.