Strikeout: Why American Seating Left Stadium Seating

Even before the last spilled Old Style was cleaned up at Chicago’s Wrigley Field, the World Champion Chicago Cubs were breaking ground on updates to the historic baseball park. The 1060 Project is a massive overhaul of the baseball stadium that will include structural upgrades, improved player facilities, new fan amenities, outfield signage (including two video boards), new premier clubs, and expanded concessions.

The 100-year-old ballpark badly needed an upgrade, and it included many of the seats in the aging stadium. Since opening a century ago, the Cubs have had only one seating vendor, American Seating. With last week’s announcement that American Seating sold off its stadium seating division to Irwin Seating, the Cubs and many other stadiums will have a new seating vendor for the first time in decades.

Though it is assumed American Seating or Irwin will hit deadlines for opening day (American Seating is only answering general questions about the transition, explaining that “due dilligence” is not complete), ballparks under construction worry about who is going to deliver the seats.

The move to exit the segment was surprising for another reason: Increasingly fickle fans want more comfortable seats. And owners found out they are willing to pay a premium for them.

“American Seating and Irwin Seating Company are committed to working together to ensure a smooth transition,” says Tom Bush, president and chief operating officer at American Seating. “We are actively working with clients to answer any questions they have about how they will be impacted by this announcement and to make sure that their needs continue to be met throughout this process. Once the deal is final, additional details will be made available.”

The decision that American Seating was exiting its architectural fixed seating business and selling it to Irwin Seating came as a surprise to many in the industry. Though the company is privately owned, it has said in the past that its auditorium and stadium seating division was the second largest in the company behind the transportation division and represented about 20 percent of its sales. A few years ago, the company said sports seating represented about 8 to 10 percent of sales and was a fairly steady market for the company.

American Seating benefitted greatly from the modern boom in new sports stadiums that generally began with the construction of Camden Yards in Baltimore in 1992. Dozens of new baseball, football and basketball stadiums followed until the early 2000s, when the boom tailed off. Still, American Seating busied itself with minor league stadiums, spring training facilities and renovation projects.

When the projects are rolling in, they are huge. Seating accounts for about $4 million to $5 million of the total tab for a new major league ballpark.

Beyond the business, American Seating has become part of the game, especially in baseball, serving customers like the Cubs and the Boston Red Sox for more than 100 years. One of American Seating’s oak seats at Fenway Park, home of the Boston Red Sox, sits 502 feet from home plate. It is painted red to mark the spot where Ted Williams hit the stadium’s longest home run in 1946, in the second game of a doubleheader with the Detroit Tigers. American Seating has been part of that storied park since 1912. Some of those original wood-slatted seats still are used today.

The sale is the culmination of an ongoing effort by the company to optimize its operations and resources and pursue significant growth opportunities in the transportation seating market. While American Seating has a long history in stadium and auditorium seating, its penetration in transportation seating is even deeper. Chances are if you took a bus or subway to work today, you sat in an American Seating product. The company also sells office and education furniture. “Freestanding seating continues to be available in the commercial and educational markets,” Bush says.

The transaction of the auditorium and stadium seating to Irwin is expected to close in March 2017, pending due diligence. Financial details of the transaction were not disclosed. About 80 workers are expected to lose their jobs because of the decision, though some might be able to apply for work at Irwin Seating. Both companies are located in Grand Rapids. American Seating has about 400 employees.

“The architectural fixed seating segment of our business was very seasonal in nature, particularly outdoor sports and higher education seating projects, and this presented an increasing number of operational challenges, which led us to the decision to sell this portion of our business,” Bush says. “At the same time, we have strong momentum in our transportation seating business and expect to benefit from the ability to focus our time, resources and talent in this market and carry on the more than 100-year heritage of American Seating as a global leader in seating.”

Still, the architectural fixed seating division connected American Seating to the world in a way few furniture manufacturers ever do. In addition to the Cubs and Red Sox, fans all over the country have made memories in its seats. The San Francisco Giants opened AT&T Park, and the Houston Astros opened Minute Maid Park in 2000; the Milwaukee Brewers opened Miller Park in 2001. American Seating installed the seats for all those stadiums. It also installed the original seats in Dodger Stadium in 1960 and replaced its own seats with new ones a few years ago when it was renovated.

The move to exit the segment was surprising for another reason: Increasingly fickle fans want more comfortable seats. And owners found out they are willing to pay a premium for them. Money for a seating replacement project can quickly be recouped by an owner through higher ticket prices. Technology is changing as well. How long before every fan demands a touch screen in the back of a seat that allows them to watch replays and order food delivered right to them? Fans are getting fatter as well, which means some stadiums are adding wider seats to make room for their portly patrons. All of that means new business in the segment could be brisk in the future.

The old seats stadiums get rid of even have a market. The St. Louis Cardinals sold 12,000 American Seating seats from the old Busch Stadium for $480 a pair.

American Seating certainly faced stiff competition, mainly from Irwin Seating, which has its own long history in stadium and auditorium seating. Asian manufacturers also are getting into the market, though Bush says he has no knowledge of Asian competitors in the outdoor stadium seating market.

“Irwin Seating Company and American Seating have a lot in common, including a commitment to high-quality, well-engineered products and a dedication to excellent customer service,” says Graham Irwin, chief executive officer of Irwin Seating. “We are working closely with American Seating to ensure a smooth transition to make sure that customer needs continue to be met.”

American Seating Chairman and Chief Executive Officer Ed Clark says he is pleased to transition the architectural fixed seating operation to a strategic, local buyer like Irwin Seating Company, “but the resulting workforce reductions are never easy, and the sale of this higher profile part of our business was an extremely difficult decision to make.”

Via bellow.press >