Dallas Cowboys, New York Yankees form venture to provide concessions

Texas-size frozen margaritas and Coney Island hot dogs might be found side-by-side when the new Cowboys and Yankees stadiums open next year.

The two teams announced Monday that they have formed Legends Hospitality Management, a firm that will handle all of the concessions, catering and retail merchandise at the $1 billion-plus stadiums.

Headed by former Pizza Hut executive Michael Rawlings, Legends has multiyear contracts with both teams and intends to provide its services to other collegiate and professional sports venues.

"What this is really all about is to take everything we’re trying to do with our new stadiums . . . and do everything we can to improve, advance and go forward with a really great fan experience," said Cowboys owner Jerry Jones about the partnership with the Yankees.

Goldman Sachs and Dallas-based private-equity firm CIC Partners have also invested in Legends, which took on $100 million in debt this month.

Despite the debt, Rawlings said, the company will be profitable with just the two contracts it has.

What’s in store

Both stadiums are set to open in 2009. Concessions at the new Yankee Stadium will focus on a New York street market concept, while the Cowboys stadium will feature an assortment of frozen margaritas.

"The frozen margarita was invented in Dallas, so we must have featured, as a big part of what we are about at our new stadium . . . the frozen margarita," Jones said.

While menus and pricing for the venues have not been announced, Rawlings said, Legends will tailor its offerings to the individual markets. As a concessionaire, Legends plans to:

Survey fans on what kinds of food and beverages they would like to buy.

Cut lines from about 250 fans in one line throughout a game to 100 to 150 fans.

Use a progressive cooking process that will keep hot foods hotter and cold foods cooler.

"We are going to customize the menus using celebrity chefs in each of one of the towns," Rawlings said.

Michael Davis, a finance professor at Southern Methodist University, said the Yankees and the Cowboys are nationally known brands, but that may not matter at the concession stands.

"I’m all in favor of shorter lines at the beer stand, and I guess, maybe, they will develop some special expertise at the new stadium that they hope to capitalize on as they go into new markets," Davis said.

How it developed

The Yankees created Legends last year to handle their food and beverage stands at their training facility in Tampa, Fla., and for their new stadium. Gerry Cardinale, a Goldman Sachs executive who was working with the Yankees, brought the idea to the Cowboys to create a joint business venture.

"This concept has been intriguing from the very beginning," Yankees co-chairman Hal Steinbrenner said. "We are both in the same process of building a new facility and thinking what is going to work and what is not going to work."

Financial terms of the deal were not disclosed, however, The New York Times reports that each team will have a 34 percent stake in Legends.

Where the money goes

Per Major League Baseball rules, the Yankees will have to share proceeds with the league from its concessions agreement with Legends but not any profits its stake in the company may generate.

The NFL does not require teams to share concessions revenue. The Cowboys have run their concessions stands in-house since 1991.