OVG signs landmark deal with Penn State

PENN IN HAND: Young fans clamor for Amin Vanover’s autograph during the Penn State spring football game at Beaver Stadium on April 13. (Getty Images)

Food service contract extends to booking, parking, sustainability

Times have changed in State College, Pennsylvania — and across college sports. OVG Hospitality has signed a landmark 10-year deal with Penn State to provide food service at multiple venues on campus, most notably Beaver Stadium, the Big Ten school’s 106,572-seat facility and the second biggest in college football behind Michigan Stadium.

It’s the first time Penn State has hired a third party to run the food at a sports facility as the institution undergoes a massive $700 million restructuring of Beaver Stadium over the next few years. The deal took effect July 1. OVG Hospitality is part of Oak View Group, parent company of VenuesNow.

“It’s about providing a quality product for our fans and continuing to improve that food and beverage experience for them,” said Vincent James, Penn State’s deputy athletic director. “That was really the driver for what started us down this road.”

For OVG, the agreement extends to other areas of business, including booking concerts and other special events at Beaver Stadium, as well as adopting sustainability practices. OVG will also conduct a parking study to gather information on traffic flow during football Saturdays and how to best manage it efficiently to move fans in and out of parking lots in the most stress-free way possible, James said.

“There’s a number of different ways we can work with them to maximize efficiency through the contracts,” James said.

In that respect, the deal is similar to the agreement in place at the University of Kansas, where OVG Hospitality runs the food at multiple venues, among providing other services on campus, said Chris Granger, president of OVG360, Oak View Group’s umbrella  company overseeing all aspects of facility management.

In Lawrence, Kansas, OVG’s deal extends to managing David Booth Kansas Memorial Stadium, but at Penn State, the athletic department will keep operating Beaver Stadium, James said.

At Penn State, OVG’s capital investment runs in the millions of dollars, Granger said.

“What was interesting to the athletic department and the university was that we would not just be a food and beverage partner, but a holistic business partner,” he said. “In our best relationships, they benefit from everything that OVG can bring to the table, from our experience as builders, owners and operators and be as committed to the guest experience as they are. There’s ways we can help increase programming and generate more revenue for them.”

The food component extends to nine other Penn State venues: Pegula Ice Arena, home of the school’s hockey team; Panzer Stadium (lacrosse); Jeffrey Field (soccer); Nittany Lion Softball Park; Rec Hall, the school’s recreational sports building; Horace Ashenfelter III indoor track facility; the field hockey complex and the blue and white golf courses and its Nineteenth Hole Cafe; plus feeding 800 student-athletes at a new performance dining center that opens next year at the Greenberg Indoor Sports Complex.

The exception is Bryce Jordan Center, the school’s basketball and wrestling arena, where the food remains in-house. It’s run by Penn State Auxiliary and Business Services, apart from the athletic department, James said.

Hiring a third party to run the food at Beaver Stadium represents a seismic moment in Penn State sports history.

On its own, Penn State has self operated concessions and premium dining for decades at Beaver Stadium, which opened in 1960.

Penn State officials expect OVG Hospitality to improve what has historically been an underperforming piece of business, sources said. The extensive makeover of the west side with new suites, club seats and loge boxes is expected to go a long way toward upgrading the stadium’s food and drink experience, as well as generating incremental revenue.

“It probably hasn’t been evolving in the ways that we would like it to evolve and provide some different offerings to help drive revenue for us,” James said.

As part of Beaver Stadium’s premium inventory, OVG Hospitality would run a proposed Stadium Club that’s part of the network of club properties acquired by OVG in February through its purchase of Invited, formerly Club Corp. In addition, last football season, Penn State opened a new tunnel club in the stadium’s south end tied to a $10,000 annual membership fee, which OVG will operate.

Industry experts say the college market could see more all-encompassing deals as the sports landscape reshapes itself with Name, Image and Likeness, revenue sharing and other expenses, driving schools to rely on outsourcing their assets to produce more commercial revenue opportunities.

“Everyone’s doing it and if you’re not doing it, you’re going to get left behind,” James said. “We’ve got incredible opportunities due to our fan base, and the volume of people that show up for every home game is the strength of who we are, which we don’t take for granted. It’s why the renovation of Beaver Stadium is critical. We’re trying to be as innovative and creative as possible. We all know what’s coming down the pipeline, so we all need to be prepared to handle that.”

On its own, there needs to be a greater focus on food service in the college space due to the financial upheaval across that segment of the market, according to consultant Mike Plutino.

“The collegiate world is upside down and behind the times on food and beverage,” said Plutino, who’s working with the University of Southern California to upgrade food service at its sports venues as the school enters the Big Ten this fall and maps out a strategy that extends to a new $40 million soccer venue and an expansion to Dedeaux Field, the Trojans’ baseball facility. “Now, they want to generate more revenue because they’re getting nipped with NIL.”

Alcohol is one of those revenue sources. Some schools, such as West Virginia, Texas, Minnesota and Colorado State (since 1976), have served beer in public spaces for years at college football games. Others, such as Penn State, are relative newcomers to the drinking game.

The decision to sell beer in public spaces at Beaver Stadium was a factor for hiring OVG Hospitality two years ago as a consultant to help guide the school through implementing the new alcohol program before it was launched for the 2022 season. Penn State started off slow selling alcohol that first year, because they were concerned about making sure it was done properly, sources said.

More outlets were added for the 2023 season and beer sales helped lead to an increase of football-related revenue of $9.6 million for the 2022-23 fiscal year, up from $7.8 million the previous year. Those numbers include parking and merchandise sales.

“There’s a lot of opportunity; everything from expanding the sheer number of concession locations to increasing the number of food and beverage personnel,” Granger said. “We’ll have a particular focus on premium with the suites and clubs. We’ll use technology in the way that we do to add markets with autonomous grab and gos. The menu will be more diversified than it currently is.”

As part of the partnership, Penn State is the first college client committed to GOAL, which stands for Green Operations & Advanced Leadership. It’s a network tied to increasing sustainability for public assembly venues, for which OVG is a founding member.

For the concessionaire, Penn State adds to a roster of college clients that extends to Kansas, Houston, Illinois and the University of Texas’ Moody Center, among other schools.