Big money big names blitz into sports niche - includes related article on the expansion of The Official All-Star Cafe - Segment Study: Casual Dining
The sports-themed "eatertainment" niche is experiencing a rapid pace of development as some of the most powerful entities in sports prepare to enter foodservice with chain concepts squared off against established players.
ESPN, the cable sports network and the NFL Players Association, the union representing professional football athletes, are within months of debuting competing but elaborate sports-themed restaurant complexes for national expansion. Each concept has recruited veteran restaurant professionals to oversee menu creation and concept development.
At the same time the industry's two nascent sports-themed chains - Friday's Front Row Sports Grill, a sister concept of T.G.I. Friday's, and The Official All-Star Cafe, the Planet Hollywood International subsidiary -- are accelerating the growth of their concepts in 1998 and beyond.
PHI has even more elaborate plans. It is looking to open its first sports-themed hotel -- based on the All Star Cafe motif -- late in 1999 by converting the Hotel Pennsylvania Madison Square Garden in Manhattan.
Meanwhile, Champps Americana, the largest national sports-oriented eatery with 26 units boasting average annual unit volumes of $5.3 million, is plotting continued expansion throughout the Midwest and East coast.
George Naddaff, an aggressive restaurant venture capitalist who is best known for acquiring and growing rich from Boston Chicken, says he is not surprised by the profuse developments among sports-themed restaurants. He most recently was the silent adviser behind the sports bar concept Champions, in selling its exclusive trademark rights to Marriott Hotels -- making Marriott no longer a franchisee of the license.
Although Jim Martell, president of Champions, sold the license for a bit less than $500,000, he says the company stands to make far more money from an exclusive deal selling Marriott sports memorabilia to decorate the hotel's lounges.
"You know what the thing is about sports?" Naddaff says. "It touches all ages. I don't know any business -- and this is especially true in restaurants -- that can go wrong focused on sports ... that is, of course, if they are not run badly."
Even though he considers Champps Americana broader than a mere sports-themed dining spot, Don C. Moore, chief financial officer of Unique Casual Restaurants, Danvers, Mass., says the sports dining category is prospering from the public's craving for something more than food.
"Guests are looking for more than just a place to eat," Moore says. "If you have two-hour waits for a table, eatertainment restaurants give you something to do and the sports-oriented ones will be more successful because they bring even more to the guests."
Moore says the chain would grow by six to eight units in the company's fiscal 1999, which begins in June.
"But I think the major point of difference between the competitors is the food," he notes. "We are not in the chicken wings business. We spend a lot of time and money on our menu. We have 120 items in it. We're very much food driven."
The segment's budding newcomers claim as much and are backing it up by recruiting top industry professionals to orchestrate menu and development plans.
At the forthcoming NFL Players Grill, a joint venture between Orlando-based Millennium Entertainment Group and the NFL Players Association, the restaurant has tapped Ralph Brennan of the Brennan restaurant clan in New Orleans to develop its menu.
But before the NFL Players Grill can open its first unit, expected to be in Orlando, Fla., in March, it must first overcome a legal challenge from the National Football League. In a federal lawsuit filed in New York, the NFL says millennium infringed on its trademark by luring investors to the project in a private placement by falsely promoting the venture as an affiliation with the National Football League.
The suit charged that the backers' prospectus claimed that the restaurant would make it the "first and only restaurant licensed to incorporate the NFL into a theme restaurant," another false allegation, the league claims.
The action asks the court to stop Millennium from proceeding with any restaurants bearing the NFL logo.
But Mark Gibson, president of Millennium Entertainment Group, says the suit would likely be settled out of court before 1997 ended, with the project firmly in motion.
He says lawyers negotiating a settlement were reaching agreement on a plan that any forthcoming restaurant bearing the NFL name would feature a logo that more clearly linked the project to the players' union and not the NFL or NFL properties -- the licensing arm of the league.
"We reached a tentative agreement and are working on settlement language, and I'm sure it will be dismissed or withdrawn," he says. "All sides are in basic agreement.
"What the NFL wanted is to make sure the public was not confused about the identity of the ownership, that they know that it's the Players Inc., the sports marketing arm of the union."
One week before the end of 1997, Brian McCarthy, a spokesman for the NFL, says that though both parties were moving toward a settlement, nothing had been finalized.
Nevertheless, Gibson says all systems were go in the ambitious bid to bring the NFL Grill to life.
"Our primary focus is to try and avoid the sports bar moniker," he says. "Yes, there's going to be celebrities and a focus on football, but we want to create a dining restaurant experience. We think the most important word in all of that is dining. That is why we teamed up with Ralph Brennan."
Although the menu still is being developed, Gibson says current Brennan-inspired items that probably will make "the cut" to the final menu are the sage-grilled, double-cut pork shops stuffed with Gouda cheese and served with smothered greens, garlic mashed potatoes and caramelized onions; blackened prime rib; and wasabi crusted salmon. He says he envisioned a check average from $10 to $20.
"Every section of the menu is going to have something tied into New Orleans," Gibson says.
Gibson says the restaurant would cost about $4 million to build and will have a "Hall of Fame-type atmosphere," occupying two floors with 425 seats. Personal football equipment, scrapbook news clippings and even junior-high-school football jerseys from contemporary and past gridiron greats, from Herschel Walker to Pop Warner, already have been contributed to the decor package, Gibson says.
"We thought if we got the players out from under their helmets and donated personal items from their careers, you'd get to know them as people," Gibson says. "We got Herschel Walker to donate things from when he competed in the Olympics on the U.S. bobsled team."
For its part, ESPN Zone has recruited Bill Freeman, a former chief financial officer of Daka International, to oversee the development of the concept as vice president and general manager.
Freeman, noting that ESPN is owned by ABC, which in turn is owned by Disney, says the restaurant stands to enjoy the powerful marketing links with the parent companies marketing savvy and media connections.
"We are combining what Disney does best," Freeman says, "creating unmatched guest experiences and services, except we're doing it in the world of sports with the strongest brand in sports broadcasting."
Freeman says it would be a mistake to call the ESPN Zone a chain concept or to refer to it as a specialty theme restaurant player.
While ESPN Zone would dazzle guests with the segment's standard assortment of television monitors and even studios for live interviews and other sporting-events commentary, Freeman says the unit will be operated foremost as a restaurant.
Guests at the ESPN Zone will be able to eat, watch a sporting event on a 16-foot television screen and play a variety of actions-sports games in a separate room.
"We're calling it an American grill, and it will have many of the same mainstream and recognizable menu items you'd expect, like hamburgers, sandwiches and steaks, except the quality is going to be a lot better and the portion sizes will offer more price value." He says he envisions a check average of about $12.
The first unit is to be a 35,000-square-foot, 350-seat restaurant in Baltimore's Inner Harbor in the Power Plant, an indoor amusement and shopping center near Camden Yards. Occupying two levels, the restaurant will feature a ring of so-called skyboxes, which also can be turned into private VIP dining quarters. Freeman says there is also private banquet space to entertain and feed entire sports teams.
Reciting usual Disney protocol, Freeman would only describe the investment cost in the first unit as "substantial."
Freeman adds that the restaurant will look more like a sports broadcast studio than a sports bar.