Finding More Revenue for the New Orleans’ Superdome - By Rick Williams
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We were asked to find more revenue for the Superdome in New Orleans, Louisiana. Raise ticket prices? Here is the story.
I was reminded of this story while staying at the Renaissance Hilton Hotel at Gillette Stadium in Foxborough, Massachusetts. Gillette Stadium is where the New England Patriots, Super Bowl Champions, play football – American football. The hotel is not “near the stadium,” it is part of the stadium complex.
Robert Kraft bought the New England Patriots years ago. The deal included a terrible, old stadium in Foxboro about halfway between Boston and Providence, RI. Nothing was in Foxboro other than this old stadium. Kraft tried to move the team to Boston, but the tribal politics of Boston blocked him from developing a stadium complex there.
Mr. Kraft decided to build the NE Patriots into a championship team and to make the Foxboro stadium into a stand alone destination like Disney World in Orlando, FL.
I was at the Foxboro Hilton to give a keynote speech to the Marine Trades Association annual meeting. The title of the speech is Making Difficult Decisions. Drawing from my book Create the Future, I outline in the speech a five step process for making important decisions – when you must get it right. After defining the challenge facing you and imagining success, the third step is creating options for taking advantage of the opportunity or countering the threat facing you.
If your company or your major product has stalled and you must come up with a new way to grow revenues, this is the moment when you must be the most creative. When you draw your leadership team together for brainstorming about what to do, my recommendation is that you DO NOT start by asking for solutions to the challenge facing you.
Start by asking the team to imaging different CATEGORIES of ways to solve the problem. Yes, you can raise revenues by raising prices but you can also introduce new products or even acquire a company with complementary products. Expand the team’s thinking about the range of options before asking for specific responses to the challenge.
The city of New Orleans built the Superdome to support the city’s economic development. While I was doing my management consulting with Arthur D. Little, Inc., the city asked ADL to help figure out how to raise revenues for the stadium so it would not be such a money loser. This was not my project but I followed the story.
As a municipal enterprise, the Superdome had a public rate sheet of fees charged for all events at the stadium whether it was a Girl Scout convention or the Super Bowl. Clearly, the city did not understand the business model for a large entertainment complex.
When I looked out the window of my hotel room in Foxboro, about 50 yards away is a huge sign on the stadium saying “Gillette Stadium.” The hotel is on the stadium property. Here are three different categories of revenue for the stadium I see from my hotel room: Naming rights to the stadium; signs on the stadium; and leasing the stadium grounds to other businesses.
I suffered through watching the Patriots play in the old Foxboro stadium with concrete rows of “seats.” Today, the stadium is a huge TV studio. You can watch the show on the field from nice stadium chairs or from enclosed bars and restaurants with HVAC in the multiple decks above the outdoor seating.
Unless you are a VIP, you walk from the parking area through a village of shops, offices, and restaurants to get into the stadium. Mid-sized office complexes having nothing to do with sports are part of the stadium complex and are a source of year-round revenue.
Robert Kraft and his team did not simply spruce up the old stadium and raise prices. They imagined many different categories of new revenue and re-imagined the business concept for the stadium complex.
Today, the New Orleans’s Superdome is called the Caesar’s Superdome. Entertainment venues, including Broadway theaters and Yankee Stadium, do not rent their facility from a rate sheet. A percentage of revenue from the event is central to a lease agreement.
Imagine categories of possible options for growing revenues, raising new funds, selling the company, or whatever the problem you must solve. Challenge yourself and your team to think broadly and image categories of possible solutions to the challenge before posting specific options on the whiteboard.
Swan Lake
I ride my bike to the Mystic Lakes just north of Boston in Medford and Winchester. I will stop to watch the sailboats and kids playing on the shore. Tufts University’s sailing center is on the Upper Mystic Lake.
On an afternoon with no wind, I paused to look across the lake at the mirror image of sailboat masts reflected on the lake’s smooth surface. A swan glided by and created Swan Lake.
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