Arena makeover a winning strategy for Sens: Prof

Like many NHL teams this off-season, the Ottawa Senators set out to attract a few high-priced free agents in their drive to succeed at the sport’s highest level.


But it wasn’t players the club’s business office was chasing – it was customers.


Fans arriving at the home opener this weekend will see the results of the largest renovation project in the 20-year history of their Kanata arena, a $15-million makeover that includes airport-like security scanners, a bevy of new food and beverage offerings and a members-only section called Club Bell.

A 20,000-square-foot premium seating area at the west end of the Canadian Tire Centre’s 100 level, Club Bell features three new seating options, a restaurant for the exclusive use of its 472 members, and valet parking.

“We really tried to do something spectacular here with Club Bell,” Senators president Cyril Leeder said in mid-September during a tour of the new-look CTC.

Standing just outside of one of the 14 sold-out victory suites, a scaled-down version of the traditional luxury box that seats six to 10 customers, Mr. Leeder said the Senators felt smaller suites were the way to go in a town that lacks the kind of well-heeled business clients who drive private suite sales in cities such as Toronto and New York.

“Our market here doesn’t have many big corporations that can support that, so we’ve really focused on the small and medium-sized businesses and products that are one, two and four seats,” he said.

The move appears to have paid off. The 14 new suites, which range in price from $80,000 to $125,000 per year and require a five- or seven-year commitment, went on the market last November and sold out in three weeks.

The loges – four seats grouped around a fixed tabletop – were snapped up so quickly 12 more were added to the additional allotment of 27, and only a couple are still available at a price of $45,000 per year over a three- or five-year term.

Finally, Mr. Leeder said he expects most of the 220 individual luxe seats – plusher, wider versions of regular club seats that cost $10,000 apiece for a season – to be sold by the opening night Sunday.

The construction required the removal of 18 suites, eight rows of seats and the concourse behind them, reducing the CTC’s overall seating capacity to 18,694 from 19,153. But the team expects to see an uptick in overall ticket revenues of eight to 10 per cent this season thanks to Club Bell.

Ian Lee, an assistant professor at Carleton University’s Sprott School of Business, said the premium seats might be shiny and new, but the concept behind them is as old as capitalism itself.

The marketing expert compared the members-only club concept to business class seats on an airplane.

“They’re doing classic market segmentation,” he said. “They’re identifying their high flyers, their five-star customers. This is a small niche, but a very affluent niche and a very profitable niche.”

Noting Club Bell’s members will account for less than three per cent of the arena’s capacity yet are expected to generate nearly three times that much in terms of their share of overall revenue, Mr. Lee said the team is targeting businesspeople and well-off hockey fans who “want the corporate box experience without renting an entire corporate box. In a sense, they’re segmenting the corporate boxes.”

In contrast, he said, the food and beverage upgrades are designed to appeal to a broad range of fans. Among the changes are an increase in the number of Tim Hortons outlets to 14 from three and the introduction of the Farm Boy Fresh Zone, featuring items such as wraps, salads and fresh soups.

“This renovation is really two different renovations,” Mr. Lee said. “I applaud the Senators. This is a very clever strategy. You’ve got to keep investing in your product and offering new features and more variety to keep the customers coming.”

Geoff Publow, Senators vice-president of strategic development, said in an age when fans can see every bead of sweat on Erik Karlsson’s face in high definition from the comfort of their living room, professional sports franchises can no longer afford to simply throw open the doors and expect customers to sprint through the turnstiles.

And it’s not just flat-screen TVs with which the club must contend.

“I think our fans are constantly challenging us to bring them a new entertainment experience,” Mr. Publow said. “A lot of times our competition is nice restaurants and bars downtown where folks are going out for that social experience.”

With innovation being a necessary component for the Senators’ success, there might be a day when fans see other, perhaps less welcome, changes.

Mr. Lee noted this could come as part of the continued trend toward segmented marketing. He predicted it won’t be long before the Sens charge a premium for “economy-class” seats in the exit aisle because they offer more legroom.

“I think that that day’s coming,” he said. “Why? Because the population is aging.”