Latest / Bloomberg Intelligence / AMB's Cannon on Revenue Model for Mercedes-Benz Stadium (Audio)

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AMB's Cannon on Revenue Model for Mercedes-Benz Stadium (Audio) · Bloomberg Intelligence

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  Speaker 1: and that's a Bloomberg business flash. You're listening to Taking
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  Speaker 1: Stop with Kathleen and Pim Box on Bloomberg Radio. Our
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  Speaker 1: next guest is a graduate of West Point. He served
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  Speaker 1: as an Army airborne arranger in Germany, and he has
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  Speaker 1: had a career in the automobile industry at Mercedes Benz.
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  Speaker 1: In fact, he was part of a small team in
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  Speaker 1: Germany that developed the plan for the brand's first SUV,
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  Speaker 1: the m Class. Joining us now is Steve Cannon. He
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  Speaker 1: is the chief executive of a m B group. Steve Cannon,
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  Speaker 1: thank you very much for being here. That's great to
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  Speaker 1: be here, all right. So I was a little coy
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  Speaker 1: with the introduction because I think it's more appropriate for
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  Speaker 1: you to tell people about your transition from working at
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  Speaker 1: Mercedes Benz in Atlanta for now helping to run and
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  Speaker 1: being the chief executive of a m B group. And
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  Speaker 1: that means Atlanta Falcons. That also means MLS is Atlanta United,
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  Speaker 1: as well as a new one point four billion dollar
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  Speaker 1: Mercedes Benz Stadium. Tell us all about it, right, So
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  Speaker 1: I just joined Arthur Blank. Arthur Blank, the founder of
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  Speaker 1: Home depot. That's the A M B Group. Arthur M.
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  Speaker 1: Blank and I run his for profit companies, which includes
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  Speaker 1: the Falcons. That includes the new Mercedes ben Stadium, Atlanta United,
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  Speaker 1: a Mountain Sky ranch in Montana, and UH and the
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  Speaker 1: PGA Tour superstore. So it's quite an interesting portfolio. So
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  Speaker 1: tell us a bit about the stadium. It's quite a design,
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  Speaker 1: so absolutely iconic design, right in the heart of Atlanta.
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  Speaker 1: That was a that was the decision that said, you know,
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  Speaker 1: while other stadiums move out into the suburbs where you've
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  Speaker 1: got war control over land, we wanted to put the stadium,
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  Speaker 1: which is an absolute iconic design, right in the heart
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  Speaker 1: of Atlanta so that it could be accessible to this
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  Speaker 1: bustling city. So UH the stadium, which will open in
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  Speaker 1: June of next year, is a multi purpose stadium for
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  Speaker 1: Atlanta United expansion franchise for MLS soccer. It's Atlanta Falcons,
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  Speaker 1: obviously NFL football, and UH with its with its roof design.
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  Speaker 1: If you could open the roof in about eight minutes,
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  Speaker 1: UH will be ideal for concerts and all kinds of
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  Speaker 1: alternative venues. Steve Cannon explain this strategy behind your food
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  Speaker 1: and beverage operation that you're rolling out at Mercedes ben
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  Speaker 1: Stadium in Atlanta. So really everything with the stadium starts
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  Speaker 1: with the fan. Our aspiration for that stadium is that
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  Speaker 1: it's going to set the global benchmark for fan experience.
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  Speaker 1: One of the biggest pain points for fans is concessions,
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  Speaker 1: UH and concession pricing sort of lousy equality at exorbitant prices,
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  Speaker 1: and theonically feel like it's been taken advantage of. And
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  Speaker 1: we want to take that business model and we wanted
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  Speaker 1: to set it on its head, and this is what
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  Speaker 1: we're launching today. It's essentially fan friendly pricing where the
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  Speaker 1: price that you're gonna pay inside of the stadium is
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  Speaker 1: not going to differ all that much from what you'd
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  Speaker 1: pay at local counterparts around Atlanta. So two dollars for
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  Speaker 1: a hot dog, three dollars first lights of pizza, two
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  Speaker 1: dollars for a refillable twenty ounce coke or at the
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  Speaker 1: Samni bottled water. Essentially, it's an opportunity to delight customers.
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  Speaker 1: Once we've gotten them inside the building. You can even
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  Speaker 1: purchase a Brot brought worst right, nice sausage and a
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  Speaker 1: premium beer for under ten bucks. So yes, that does
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  Speaker 1: seem competitive, and I'm it's kind of it's so brilliant
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  Speaker 1: a way to me, like, why did anybody think of
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  Speaker 1: this sooner? But so, how does it affect the franchise,
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  Speaker 1: the revenues, the bottom line, because do you view this
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  Speaker 1: as a dip in revenues that you're willing to sustain
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  Speaker 1: because they'll make your fans happier, or do you think
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  Speaker 1: there's a chance that happier fans plus lower prices will
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  Speaker 1: equal a boost in sales so large that this will
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  Speaker 1: actually be a profit maker. We're we're betting on the
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  Speaker 1: fan here, We're betting on a on a bustling statement
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  Speaker 1: that people stadium that people love to come to. And uh,
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  Speaker 1: we think that the stadium pricing or the concession pricing,
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  Speaker 1: that's just one piece of what will be a phenomenal experience.
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  Speaker 1: But but ultimately we think it's gonna it's gonna absolutely
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  Speaker 1: create a new demand model that instead of people waiting
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  Speaker 1: outside of the stadium because they want to avoid being
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  Speaker 1: gouged when they get in, they're gonna come into the
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  Speaker 1: building earlier. And we expect it's hard to predict what
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  Speaker 1: the bump in in demand is going to be but
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  Speaker 1: we expect significant demand in in volume, which UM, given
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  Speaker 1: the pricing, we think this could be a better revenue model.
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  Speaker 1: Can you give us a hint of what it was
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  Speaker 1: like being in meetings as the chief executive of Mercedes
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  Speaker 1: Benz us A talking with Mr Blank about the possibility
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  Speaker 1: of naming the stadium Mr Sadies ben Stadium. And when
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  Speaker 1: you decided that you were going to jump to that position, Well,
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  Speaker 1: it was interesting. I met I met Arthur and uh,
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  Speaker 1: you know, he he's a Mercedes san He quotes the
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  Speaker 1: Mercedes tagline consistently the best or nothing, and he said,
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  Speaker 1: that's our aspirations for this stadium. So he felt a
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  Speaker 1: kinship with the Mercedes Benz brand, you know. And as
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  Speaker 1: we discussed you, as we we talked UM, Mercedes relocating
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  Speaker 1: to Atlanta, looking to make a statement as they came in,
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  Speaker 1: it was it was as if it was a perfect opportunity, uh,
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  Speaker 1: intersection at the right place in the right time, as
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  Speaker 1: Mercedes relocated their headquarters. UM, you know over time that
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  Speaker 1: you know, that was a board decision that was made.
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  Speaker 1: I came to UM appreciate respect, you know, Arthur and
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  Speaker 1: his core values and and when he invited me to
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  Speaker 1: consider taking over as CEO for his his companies. It
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  Speaker 1: was what it was that once in a life time
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  Speaker 1: opportunity that was too good to pass quickly. Specific questions,
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  Speaker 1: how much roughly does a team might the Falcons making
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  Speaker 1: concessions under the old pricing? How much do they project
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  Speaker 1: to make under the new UH pricing? So so I
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  Speaker 1: don't have those numbers, you know, my fingertips. We um
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  Speaker 1: One thing I will tell you we did not sell
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  Speaker 1: our concessions. So the typical revenue model is you sell
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  Speaker 1: the concessions through concessionaire and they then have to make
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  Speaker 1: it up over the length of the contract. We decided
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  Speaker 1: not to do that. Our concessionaire is a service provider
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  Speaker 1: that's eventually going to help us deliver a great product.
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  Speaker 1: All right, Steve Cannon, that sounds like a great model.
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  Speaker 1: Thank you so very much and for joining us. I'm
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  Speaker 1: Kathleen Hayes along Pim Fox and this is taking Stock
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  Speaker 1: on Bluebrig Radio. Coming up on taking Stock to Philadelphia
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