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January 24, 2023

Emerging Sports Properties, Malls Can Help Each Other

Photo Credit: Manny Fernandes

The Metropolitan Riveters of the Premier Hockey Federation call American Dream -the three million square foot retail and entertainment complex in East Rutherford, New Jersey- home. The venue has the nation’s largest indoor theme park, North America’s largest indoor water park and its only indoor ski and snow resort on premises.

Hosting practices and playing home games at the massive retail and entertainment center gives the club exposure to a large number of people, many of whom are seeing professional hockey live for the first time, that they would otherwise not reach. “We’re expanding our fan base and we believe some portion of those individuals will fall in love with the Riveters and become hockey fans,” John Boynton (Chairman, BTM Partners) said.

For American Dream, professional hockey serves as yet another attraction that can draw people in and keep them entertained once they arrive at the venue. The future of retail is a retail-tainment,” Kristen Buckley-White (VP marketing, American Dream) said. It combines “retail, entertainment, dining; it’s more experiential.”

Considering the difficulty emerging sports properties have attracting fans and the ongoing struggles more traditional 

shopping malls

are experiencing, it seems likely there are other retail centers and upstart sports teams/leagues that could benefit from a synchronous relationship together. 

The question is are the owners of those venues willing to invest the capital needed to make it possible?

They may have to if their locations are going to survive. A 2020 Coresight Research project predicted 25% of the ~1,000 U.S. malls in existence would shutter within the next three to five years and SiteWorks believes that figure will decline to between

150 and 200

within the next 10-15 years.

The concept of meshing professional sports and retail is not new. Club owners across the domestic sports landscape are building mixed-use real estate projects adjacent to new stadiums (see: The Battery Atlanta or Belmont Retail Village at UBS Arena).

That is because fans are no longer “coming for just the game,” Boynton said. "They are coming for the day and probably doubling their spending as a result."

But the Riveters-American Dream tie-up puts a new spin on it. It is the first time an emerging sports property has taken up residence in fully developed entertainment venue hoping that people who come for shopping, dining or another attraction will stick around and check out a practice or game.

There is tremendous value in a large number of people stumbling on and taking in the Riveters product. "The U.S. is a crowded sports market, and it can be hard for emerging properties to get noticed," Boynton said. "The opportunity to place ourselves in the middle of a venue that will see tens of millions of visitors a year [is] hard to pass up."

Boynton expects the additional visibility and convenience will also lift the team’s top line. “It should translate into higher ticket and merchandise sales,” he said, and make club sponsorships more enticing.

The club exec. envisions the venue opening doors to some new, unique partnership opportunities too. “American Dream is loaded with fashion brands. One of the hottest things on social media is the 'walk up' when the athletes enter the arena in stylish, high-end outfits. Dressing our players in Lululemon or Aritzia provides a great promotional opportunity for these brands with stores in the mall,” he said.

But it’s not just the team benefiting from playing at American Dream. The fan experience has improved too. Fans can “come watch a hockey game and then go to the water park or come have a nice lunch and then go to a game,” Boynton said.

And while at the game, they can enjoy premium hospitality–something the Riveters could not offer in their previous home. “Rosie’s Club has a full buffet and access to a bar,” Boynton said.

The venue has also elevated the professional hockey experience for the players. The team is able to get ice time during the day and enjoys its own dedicated locker room at the venue.

Last year, the Riveters played games at Barnabas Health Hockey House. But the team was forced to practice at American Dream because it could not get a professional locker room or daytime ice at the Devils’ practice facility.

The club is playing in front of meaningfully more fans now too. The Oct. 14 season opener drew ~1,300 people. The Rivs averaged ~350 per game last season. 

The additional luxuries do not come cheap. Boynton estimates the Riveters are paying roughly 2-3x what it would cost them as a tenant at a more traditional rink. “But we're investing for growth,” he said. “We’re experimenting. We’re trying to innovate and think this model has a ton of potential to grow the game, and our business.”

Hosting a professional women’s hockey team is serving several initiatives for American Dream. “We are passionate about being a place where community comes together,” Buckley-White said, and Riveters games are an opportunity for the venue to deliver visitors a shared experience.

The long-term partnership also provides American Dream with a platform to “support female athletes and young girls,” Buckley-White said.

Of course, there is a business case for the relationship too. The Riveters contribute revenue (they buy ice time, take locker room space) and serve as another reason for people to visit the mall. “People are already coming here for entertainment, so [the Riveters] feels like an extension and another offering that we have,” Buckley-White said. 

While American Dream has a host of attractions designed to draw people to the venue, traditional shopping malls are largely struggling to do the same. Indoor mall foot traffic during the ’22 holiday season declined 14.2% from 2019, the last pre-pandemic holiday season. Outlet malls (-17.8%) and open-air lifestyle malls (-11.7%) experienced comparable declines.

It’s logical to wonder if some of those venues would benefit from repurposing space to serve local emerging sports properties. “If we’re successful in attracting more people to the mall who wouldn’t otherwise be there, why wouldn’t they,” Boynton asked.  

The logic is sound, if unproven. But it’s not clear a more traditional mall could deliver comparable value to an emerging sports property. They simply don’t draw anywhere close to the same number of visitors. American Dream has a plan to draw 40 million people annually, on par with the Mall of America (another one of its properties), in the years ahead.

And without the traffic already in place, the mall would need to add “another marketing layer and it just adds another obstacle to making [a partnership with an emerging sports property] a success,” Buckley-White said.

Most malls would also likely have to make a meaningful investment in infrastructure to host a professional team. Remember, American Dream already had an ice rink inside the venue.

Esports could be the exception. Wisdom Gaming Studios, located at the Mall of America, serves as the home for professional teams operated by Torrent.

However, it can be done and if these retail locations are going to thrive long-term Buckley-White argues they have no choice but to embrace the retail-tainment concept. “It’s just the way consumers want to consume. They want multi-faceted experiences,” she said.