Sports Business Journal

If you are like me and you enjoy going to many different sporting events, you pay attention to many of the team’s revenue drivers: ticket sales, corporate sponsors, suits, naming rights, merchandise sales, and more. Concessions always seem to slip my mind. Maybe it’s because I used to view them as an overpriced and unappealing service. However, a recent talk with a former Aramark VP of Marketing is beginning to reshape my perception of the business.

Aramark is a leader in the stadium and arena food service industry. They also specialize in facilities management, premium event catering, and more. They can make money three different ways.  In a “P+L” deal, the concessions collect money from the fans and pay the team 40% – 50% of the earnings. In a “Fee” deal, the client (the sports team) pays a flat management fee for Aramark’s services. In a “Split” deal, a combination of the two occurs. Does 40%-50% seem like a big chunk of money to pay the team? You bet! The fast food business operates on an average 30% markup. When you have to pay 40%-50% to the team and still make a profit, you find yourself charging $8 for a beer. For Aramark, Beer is great. It’s where they make their biggest margin. Here are some of their other initiatives: [click to continue…]

About Reuven Fridmar

Reuven is a fourth year student at Marquette University, earning degrees in Marketing and Entrepreneurship. He hopes to create sports marketing initiatives that drive value while focusing on charitable causes. Reuven lived in three countries and visited 13 total. He prides himself on being fluent in Hebrew, Russian, and English. People and idea lover. Connect with Reuven on Twitter @ReuvenFridmar

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