The encyclopedia · Finance & Accounting · Financial decision · 1998–2010
ESPN Zone put a sports bar in seven cities — Disney closed five of them in a week
Disney's ESPN Zone sports restaurants opened from 1998; in June 2010 the company closed five of seven locations, citing weak economics and the recession.
ESPN Zone · The Walt Disney Company · 2010-06
What happened
The first ESPN Zone opened in 1998: sports-themed restaurants owned by Disney's ESPN, with walls of screens, memorabilia and arcades. The chain grew to seven cities — New York, Chicago, Baltimore, Washington, Las Vegas, Los Angeles and Anaheim — selling the idea of eating inside a sports channel.
The model was heavy just as the recession arrived: large downtown footprints and full restaurant costs against falling discretionary spending. Executives cited 'continued weak economic conditions across the country'; industry analysts noted the restaurant business was suffering its biggest decline in three decades, with eating out the first expense households cut.
On 9 June 2010 Disney announced the closure of five ESPN Zones — Washington, Baltimore, Chicago, New York and Las Vegas — keeping only locations tied to Disney properties. An ESPN spokesman said the Zones 'served sports fans very well,' but 'from a pure business perspective, the economics have been challenging.'
Why it happened
- Recession economics: restaurant meals are discretionary spending, and fans cut them first.
- Screens stopped being special: by 2010 every bar had HDTVs, so a sports restaurant's main attraction was everywhere for free.
- Survival followed ownership: the locations kept were the ones attached to Disney properties, not the downtown markets.
The lesson
ESPN Zone bet that fans would pay restaurant prices to watch sport on big screens; the recession and screen proliferation said otherwise, and Disney closed five of seven locations in a week.
Aftermath
The Anaheim Downtown Disney location continued; the ESPN Zone concept never expanded again.
Sources
- The Washington Post, 10 June 2010 — ESPN Zone loses economic game (ESPN announced closure of five ESPN Zone restaurants — Washington, Baltimore, Chicago, New York and Las Vegas — effective within a week; two locations to remain; executives cited 'continued weak economic conditions across the country'; ESPN owned by the Walt Disney Co.)
- Los Angeles Times, 9 June 2010 — Disney to close most ESPN Zone outlets (Walt Disney Co. closing most of the chain's outlets; seven cities: Anaheim, Baltimore, Chicago, Las Vegas, New York, Washington and Los Angeles L.A. Live; only Disney-property outlets confirmed to remain, including Downtown Disney Anaheim; first ESPN Zone opened 1998; recession and restaurant industry's biggest decline in three decades; ESPN spokesman: 'from a pure business perspective, the economics have been challenging'; NPD Group's Harry Balzer on discretionary dining cuts)
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