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Luxury boxes

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Luxury boxes


A Luxury box (also referred to as a luxury suite,[1] corporate box, corporate suite, executive box, sky box or a private box) is a special seating section located within stadiums, arenas and other sporting and entertainment venues. They are typically located in the midsection of a stadium grandstand, usually providing the best views of the event. Some have glass panels that can be opened, in order for the spectators to feel closer to and more immersed in the action of the event. The inside of a luxury box typically includes a bar, televisions, a small seating area, and a private bathroom. The boxes are usually catered, with guests enjoying corporate hospitality, with champagne, canapés, shrimp, and sushi being common favorites. The lease to a box usually comes with allocated parking spaces at the venue and access is usually provided with separate entrances, away from the general public gates.

Club seating, club level seating, or premium seating is marketed on a similar basis to luxury boxes. However club seating is open to the elements, as opposed to the entirely enclosed luxury boxes, which gives more of an outdoors impression at roofless and open-roof stadiums and arenas. Like luxury boxes, club seating provides fans with exclusive access to an indoor part of the arena though private club entrances. These areas are often air conditioned and contain special restaurants, merchandise stands, and lounge areas of the stadium that are not otherwise available. Concession stands and vendors on the Club Level also often offer different menus than in other stands to give more of a special feel to the Club.

Commercial aspects

Luxury boxes are a significant source of revenue for most professional sports teams and stadium owners. Since the late 1990s, it has been proven that luxury suites and club seating are lucrative revenue-generating features that made pro sports teams financially successful in order to remain competitive long-term.[2][3][4][5] While originally widespread among North American major pro sports, this trend is also gaining popularity in Europe. For instance, Emirates Stadium's revenue from premium seating and corporate boxes alone is nearly as high as the revenue from Arsenal F.C.'s previous stadium at Highbury.[6]

Particularly in North American major professional sports leagues, luxury suite revenue does not have to be shared unlike gate receipts which are split with visiting teams, leading to teams demanding new stadiums that contain more luxury boxes.[1]

Marketing and exclusivity

Most luxury boxes are leased by contract on a yearly basis, though some are bought in a manner similar to that for a condominium. These methods usually grant access to the box by the leaseholder or owner for every event held at the venue. A few stadiums rent them on a per-event basis. Prices vary from US$5,000 up to the millions of dollars depending on the venue and events held there.

Luxury boxes that are rented on a single event basis can range from US$250 for low-key events to up to at least US$250,000 for high-end events such as sporting final matches. Also, the location of the box and how many people the box can hold usually makes up the price. Standing room tickets may also be purchased at an additional fee but are usually less money than an actual suite ticket. If a normal box ticket with a seat costs US$500 per ticket then standing room tickets might be around US$250–US$300 per ticket. These tickets will allow more people in a box, but they won't have seats and will have to stand in the box or sit in the lounge area.

Some have commented that the rise of the luxury box, along with club seating, has degraded the game-day experience for the average fan, because placement of the boxes has moved the upper decks higher and farther away from the playing surface. Three current venues, Ford Field, Red Bull Arena, and Philips Arena, as well as the new San Francisco 49ers stadium that is currently under construction, have addressed these concerns by placing all luxury boxes on one side of the playing surface, which allows the other sides of the venue to have closer sightlines than most modern stadiums.

Prevalence

The stadium with the most luxury boxes is the Estadio Monumental "U" in Lima, Peru with 1,251. The first stadium to contain a luxury box was the Astrodome in Houston, Texas, built in 1965. The Indianapolis Motor Speedway constructed their first luxury boxes (dubbed the "Turn Two Suites") in 1973 as part of the existing motel complex on the grounds. One unique set of luxury boxes is located on the campus of Boston College. The school's main indoor arena, Conte Forum (also known as Kelley Rink for hockey games), is directly attached to its football venue, Alumni Stadium. Some of the luxury boxes in the combined complex overlook both the stadium's playing field and the arena floor.

Luxury boxes have become a feature of the major professional sports league system in North America. The Palace of Auburn Hills' large number of luxury suites was a pioneer for the building boom of modern-style NBA arenas in the 1990s. Although The Palace is now one of the oldest arenas in the NBA, its foresighted design contains the amenities that most NBA teams have sought in new arenas. By contrast, of the other NBA venues that opened in 1988-89, Amway Arena, Charlotte Coliseum, and Miami Arena have been demolished, while the BMO Harris Bradley Center and Sleep Train Arena are either undergoing major renovations or slated for replacement.[7][8][9][10]

Many new additions to college football stadiums in the United States are built with luxury boxes, producing additional income for the schools.

Top tier European pro association football teams have moved to new stadiums designed with a large number of luxury boxes, such as Benfica, Bayern Munich, Arsenal, and Juventus. Other clubs such as Real Madrid and Manchester United have extensively renovated their existing stadiums to add large numbers of luxury boxes.

Use in the NFL

Most notable in their use of luxury boxes is the National Football League. Under the NFL's current revenue sharing agreement, teams must forfeit a large portion of their ticket revenues so that the funds can be redistributed among all the teams, particularly those in smaller markets. However, the luxury boxes, quickly becoming a top source of revenue for the franchises, were exempted from this sharing requirement. Because of this as well as the NFL's blackout rule, there has been a rush in recent years to sacrifice seating capacity in favor of the luxury boxes. Teams have used the threat of relocation to press state and local governments for financial assistance to either build new stadiums or renovate older venues.[1] These new stadiums and renovations generally cost taxpayers hundreds of millions of dollars. The two newest NFL stadiums, AT&T Stadium and MetLife Stadium, each cost over $1 billion. Of the three new NFL stadiums that are confirmed to be opening in the future, Levi's Stadium (2014) and the New Falcons Stadium (2017) are expected to cost at least $1 billion, and Vikings Stadium (2016) is estimated to cost just under that amount.

The luxury box conundrum is one of the reasons why Los Angeles, which has two older stadiums (the Rose Bowl and the LA Coliseum) that both seat over 90,000 but contain no luxury boxes, still does not have an NFL franchise 16 years after both the Rams and Raiders departed in 1995.

References

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