201 East Broad Street
Spartanburg, South Carolina 29306
Telephone: (864) 598-8600
Fax: (864) 598-8695
Web site: http://www.centerplate.com
Incorporated: 1995 as VSI Acquisition II Corporation
Sales: $643.1 million (2005)
Stock Exchanges: American Toronto
Ticker Symbol: CVP
NAIC: 722310 Food Service Contractors; 722110 Full-Service Restaurants; 722211 Limited Service Restaurants; 711310 Promoters of Performing Arts, Sports, and Similar Events with Facilities
Centerplate, Inc. is a leading provider of concessions, merchandise, catering, and management services for 135 of North America's best-known sports facilities, convention centers, and other entertainment facilities. Centerplate is one of the two largest food and beverage service providers to National Football League (NFL) facilities, the third largest provider to Major League Baseball (MLB) facilities, and the largest provider to minor league baseball and spring training facilities. High profile events over the years include 24 World Series games, ten Super Bowls, eight NCAA Final Four Men's Basketball Tournaments, 14 World Cup Soccer Games, and nine U.S. Presidential Inaugural Balls.
1929: ROOTS ESTABLISHED
Centerplate's roots date to 1929, when Nathaniel Leverone founded the Automatic Canteen Company of America. New Hampshire-born, Dartmouth educated, 45 years old and in the real estate business, Leverone got his idea for the business while waiting on a Chicago "L" platform. To pass the time, he put a penny into two different coin-operated weight machines and got readings of 106 pounds and 200 pounds. A gum machine ate another coin but a peanut machine rewarded him with a few moldy morsels. Penny-in-the-slot machines had been around a long time; in Chicago they were the province and turf of gangsters. The 155-pound man knew that he could do better.
The company's first big success came at Chicago's 1933–34 World's Fair, where his Automatic machines dispensed affordable sandwiches, cakes, pies, ice cream, candy, and cigarettes to the visiting masses. With Leverone at the helm, the first major national retail organization of its kind flourished in World War II by providing food service to workers at defense plants. Canteen landed its first major league baseball park concessions contract when the American League Athletics moved from Philadelphia to their new stadium in Kansas City in 1954, and established the New York Yankees and Yankee Stadium as clients in 1964.
The company changed its name to Canteen Corporation in 1966. When International Telephone and Telegraph Corporation (ITT) acquired Canteen in 1968 for $242 million, the cost of a vended coffee or soft drink was raised from 10 to 15 cents; sales that year were $340 million, with earnings of $32 million. Canteen continued to be headquartered in Chicago and, in the late 1960s and early 1970s, like many other vending businesses, shifted its focus to nonvended foodservices in fields such as restaurants, airline catering, fast-food franchises, and hotel and recreation area operations. In 1971, Canteen's Nationwide Concessions division operated in sports stadiums and recreation areas such as Yankee Stadium and Yellowstone National Park.
Citing antitrust regulations, the U.S. Justice Department forced ITT to divest a number of its holdings, including Canteen, and in 1973, Trans World Airlines, Inc. bought the company for a mere $132 million. In 1980 Canteen, officially a subsidiary of Trans World Corporation, had become the largest vending machine business in the United States with annual revenues of $850 million. As the industrial decline of the United States in the 1980s unfolded, Canteen saw its vending business feeding workers in the smokestack market diminish. By mid-decade, Canteen increasingly provided onsite foodservice to white-collar workers in corporate settings, and greatly expanded its food sales to leisure and recreation markets, and institutions such as schools, prisons, and hospitals. Canteen was now operating a number of different stadium concessions operations including its Volume Services unit, acquired when it bought Interstate United Corp. in 1985.
In 1990, Canteen's operations were moved from Chicago to Spartanburg, South Carolina, the new home of its parent company, now called TW Holdings, Inc., which also owned the Denny's Restaurant chain, 500 Hardee's, and 250 Quincy's. In 1992, Canteen had more than 11,000 food, vending, and recreation services accounts in 48 states, with sales of $1.28 billion. In 1993, TW Holdings Inc. changed its name to Flagstar Companies Inc., and because of heavy debt began selling off some of its businesses. In 1994, Flagstar agreed to sell Canteen's vending and foodservices businesses, except for its Volume Services division and TW Recreational Services, to London-based Compass Group PLC for $450 million.
VOLUME SERVICES EMERGING IN 1995
The company now known as Centerplate was officially founded in 1995 when a group of top-level managers of Volume Services, Inc. engineered a friendly buyout of the firm from its parent company. The new company registered as VSI Acquisition II Corporation but continued to do business under the "Volume Services" name, with the same logo, and in the same Spartanburg, South Carolina, headquarters. The sale of Volume Services by Flagstar was announced in November and completed by December 31, 1995. The company, which had 80 accounts and about $20 million in annual revenues in 1995, was sold for $75 million.
In 1996 Volume Services solidified its regional base of business in the Carolinas. In July, the company was selected to handle all food and beverage concessions as well as event booking, ticketing, and facility management of the planned BI-LO Center in Greenville, South Carolina, a $63 million sports and entertainment complex that was scheduled to open in September 1998. With 12 separate accounts, ranging from major amphitheaters to minor league baseball facilities, Volume Services was the largest concessions operator in the Carolinas when it secured a new NFL concessions contract for the expansion Carolina Panthers and their under-construction Carolinas Stadium in Charlotte.
Centerplate is in the business of creating something special for major and minor league sports facilities, convention centers and entertainment venues. And for the fans and guests of these facilities.
For more than forty years, we've provided catering, concessions, management and merchandise services for some of the most prominent venues in North America.
But what we do best is to combine our culinary talent with our extensive event management expertise to ensure that every guest at every event is treated to a unique experience that can't be duplicated anywhere else.
Concentrating specifically on the convention, and sports and entertainment industries, Centerplate's proficiency in serving premier, high-volume facilities with the highest-quality cuisine is unmatched.
One element that has enabled us—and our clients—to succeed is our ability to understand and build on the uniqueness of each facility. We add local favorites to menus in suites and banquet rooms. We develop proprietary gourmet concessions that take stadium fare to unexpected levels. We design and produce one-of-a-kind merchandise for team stores and souvenir kiosks. Tailoring our services to suit each individual venue and its clientele is how we continually fulfill our commitment to create something special.
By the mid-1990s, Volume Services found that it took quite a bit more than cold beer and warm hot dogs to impress a crowd, and once the novelty of nationally branded pizza and hamburger products had worn off, the company turned to the concept of regionalized branding. When the 1996 football season started, new menu items for fans included Carolina-style barbecue carved fresh from spit-roasted pork for Carolina Panthers fans, polenta-dusted fried Calamari and grilled Ahi tuna on a sourdough roll in San Francisco's Candlestick Park and fried Grouper Sandwiches at Houlihan's Stadium in Tampa Bay. In the same year, Volume Services helped design and construct an automobile-themed minor league baseball park and menu for the Lugnuts and their new Oldsmobile Park in Lansing, Michigan. They created a Hubcap Café Filling Station, and Dashboard Diner, where fans could get a quarter-pound Ethyl Dog, a Diesel Dog, a Bore and Stroke bratwurst sandwich, or a High Octane Polish sausage dog.
In June 1997, the firm landed a 20-plus-year concessions, merchandise, and suite catering contract with the San Francisco Giants that would begin in 2000 when the team moved into the newly built Pacific Bell Park. Volume Services had been serving food and beverages to Giants' fans in Candlestick Park since 1993. Sometimes partnering with local companies, the company by the end of the year had a total of 90 contracts, including retail operations and concessions agreements at outdoor amphitheaters such as Hardee's Pavilion at Walnut Creek in North Carolina, and parks such as the Los Angeles Equestrian Center.
ACQUISITION OF RIVAL COMPANY: 1998
Volume Services nearly doubled its size in August 1998 when it acquired Service America Corporation, a rival company with a focus on convention center concessions. Service America had contracts for foodservice at more than 20 convention and entertainment centers, including Denver's Colorado Convention Center and the Jacob K. Javits Convention Center in New York City. In addition, the company provided foodservice at two MLB stadiums and two NFL arenas as well as the Rose Bowl in Pasadena, California, the Saratoga Racetrack in New York, the Los Angeles Zoo, and B.C. Place Stadium in Vancouver, Canada. With the acquisition came a name change from Volume Services to Volume Services America, and in October, a corporate name change from VSI Acquisition II Corporation to Volume Services America Holdings, Inc.
Service America had annual revenues of more than $170 million with 800 full-time and more than 10,000 part-time and seasonal employees. With combined annual revenues of more than $400 million and over 26,000 employees, the merger of the two privately held foodservice providers placed Volume Services America among the country's top four sports and recreation concessionaires. The expanded enterprise maintained an office in Stamford but continued to be headquartered in Spartanburg and led by Volume Services Chairman and CEO Lawrence A. Hatch, along with Service America President and CEO John T. Dee.
- Automatic Canteen Company of America is founded in Chicago.
- Canteen lands its first major league baseball park concessions contract in Kansas City.
- Canteen is sold to International Telephone and Telegraph Corporation.
- Trans World Airlines buys Canteen.
- Volume Services is acquired and folded into Canteen's sports and recreational foodservices operations.
- Canteen's headquarters is moved to Spartanburg, South Carolina.
- Management-led buyout establishes Volume Services as independent company.
- Service America Corporation is acquired; name is changed to Volume Services America.
- Unique public offering is launched; name is changed to Centerplate.
Despite being the largest foodservice provider to NFL stadiums, minor league baseball parks, and major convention centers, 1999 was a year of uncertainty for Volume Services America. The firm continued to retain and renew existing accounts and win new concession contracts but was evaluated negatively by financial analysts because of its $215 million debt load and the seasonality and event-driven nature of the recreational foodservice industry. In June, New York-based entertainment, aviation, and energy company Ogden Corporation entered into an agreement to buy Volume Services America for $127 million and its assumed debt but called off the deal in September. By April 2000, Volume Services America had realized $4.3 million in cost savings from the acquisition of Service America, and in the process regained more positive ratings from market analysts. The company's annual revenues jumped over 20 percent from $431 million in 1999 to $522 million in 2000, and then grew at 4 percent and 6 percent in 2001 and 2002, respectively. Sales for 2002 totaled $577 million, with a net income of $4.5 million.
UNIQUE PUBLIC OFFERING IN 2003
In February 2003, Volume Services America began doing business under the name Centerplate. On February 13, 2003, Volume Services America Holdings, Inc., the parent company of Centerplate, stunned Wall Street when it filed papers to raise $275 million in an initial public offering (IPO) of Income Deposit Securities (IDSs), a unit never before traded in any U.S. market. Based on what were called Income Trusts in Canada, IDSs had separate debt and stock components paired together into a single unit for trading purposes, with investors getting one common share and debt note for each security purchased. In turn, the buyer would receive income in two ways: a monthly interest payment on the notes and a monthly dividend on the stock.
On December 5, 2003, Centerplate made history when it began trading its IDSs on the American Stock Exchange under the ticker symbol CVP. On December 8, Centerplate IDSs began trading on the Toronto Stock Exchange under the ticker symbol CVP.up. By the time all IPO transactions closed on December 16, the company had raised $277 million, which it used to pay down debts, repurchase stocks, and establish cash reserves. The firm finished 2003 with $616 million in sales, but due to costs associated with refinancing and the IPO showed a loss of $4.4 million.
At the start of 2004, Centerplate had contracts with 68 sports facilities throughout the United States and Canada, as well as 30 convention centers and 31 other entertainment facilities in the United States. The bulk of its revenues came from food and beverage concessions at 18 major league sports facilities: ten NFL, six MLB, two National Basketball Association (NBA), and one National Hockey League (NHL). With 25 teams on its roster, Centerplate was also the largest foodservice and merchandise provider to minor league baseball and spring training facilities.
In October 2004, security holders approved an amendment that changed Centerplate's corporate name from Volume Services America Holdings, Inc. to Centerplate, Inc., completing a rebranding process that began in early 2003. The loss of the San Diego Padres contract, a sales decline at MLB and NFL facilities, and five fewer postseason games were responsible for a decline in annual revenues to $607 million for 2004. Centerplate ended the year serving 133 facilities, with $2 million in net income.
TURMOIL AT THE TOP IN 2005
In April 2005, the board of directors ousted Lawrence Honig, Centerplate CEO since 2002, for "conduct unrelated to the company's operating performance or financial condition." He was temporarily replaced by Janet L. Steinmayer, who had been with the company since 1993, and served as president since February 2004. The new management team pledged to go after big stadium contracts and in April won a credit agreement with GE Capital for $215 million to fund the new initiative as well as for efforts to build a branded company image with newly created in-house proprietary brands and concepts such as Top Dog at Qualcomm Stadium in San Diego and Flipside Grill at New York's Yankee Stadium.
In August 2005, Centerplate rejected an unsolicited takeover offer from Capital Management LLC and a former CEO, Lawrence Hatch. In late August, Hurricane Katrina affected four of the venues in which Centerplate operated food concessions, including the Louisiana Superdome, where the company lost $9.4 million in sales due to hurricane damage. In September 2005, Centerplate named Paul W. MacPhail, a former restaurant executive, to replace Honig as chairman and chief executive officer. At the same time it named acting CEO Janet L. Steinmayer as a director, president, and COO. The year ended with a net loss of $4.6 million on annual revenues of $643 million, up 5.9 percent from 2004. New contracts brought in $24.4 million and convention sales increased by $18.1 million, with 33 contracts bringing in 27.1 percent of total sales. Contracts in 72 sports facilities provided 63.7 percent of sales and 30 contracts in other entertainment venues comprised 9.2 percent of sales.
Turmoil at the top levels of Centerplate management continued in March 2006 as MacPhail, CEO for only six months, left the company. Centerplate named Janet L. Steinmayer, chief operating officer since September 2005, as chief executive officer. Contracts representing about 24 percent of Centerplate's revenue in 2005 were due for renewal in 2006 and the company was expected to raise its capital expenditures to secure these clients. Since Centerplate carried a heavy debt load, doubts were raised about whether the company could continue to pay its declared distributions on its IDSs in 2006 or 2007.
After a little more than a decade, the company that emerged from a giant in the vending industry in 1995 as an independent and more focused enterprise had established itself as a premier provider of concessions, merchandise, catering, and management services at some of North America's most popular venues, from Yankee Stadium, a customer for 41 years, to the Rose Bowl. With veteran insider Steinmayer in place as CEO, Centerplate was expected to regain its focus as a major player in the highly competitive and fragmented recreational foodservices industry.
Volume Services America, Inc.; Volume Services, Inc.; Service America Corporation.
ARAMARK Corporation; Levy Restaurants, Inc.; Restaurant Associates Corp.; Delaware North Companies, Inc.; Compass Group PLC; Boston Culinary Group, Inc.; Sodexho, Inc.; SMG Management; Global Spectrum, L.P.
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―――――――, "Janet Steinmayer: Industry Vet Steps up at Centerplate with Renewed Focus on Culinary and Service," Nation's Restaurant News, March 27, 2006.
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―――――――, "Volume Services Picks up Four Baseball Accounts," Amusement Business, March 13, 1995, p 1.
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"Centerplate, Inc.." International Directory of Company Histories. . Encyclopedia.com. (September 24, 2018). http://www.encyclopedia.com/books/politics-and-business-magazines/centerplate-inc
"Centerplate, Inc.." International Directory of Company Histories. . Retrieved September 24, 2018 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/centerplate-inc
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