Disney says successful ESPN Zone N.Y. bound Times Square to get restaurant in summer; rapid growth predicted; Restaurants

Three months after Walt Disney Co. launched its first ESPN Zone at the Inner Harbor, the company said yesterday that it will take the concept to Times Square next summer.

"What we've found is that the Baltimore facility has exceeded our expectations," said Scott P. Dickey, director of marketing and sales for Disney Regional Entertainment Inc. "It's been everything we thought it would be and more."


Disney's business plan called all along for opening one ESPN Zone and running it for three or four months, basing rollout and real estate decisions on its performance. The plan included opening a site in Chicago's River North District in 1999 and construction of 20 to 30 ESPN Zones in the next five to 10 years. Eventually, the idea may go international.

"If Baltimore wasn't successful, we would have taken a hard look at what needed to be changed," Dickey said. "Instead, we found that not much needs to be changed."


The Baltimore site allows customers to dine in a restaurant and bar, watch their favorite sports in a screening room and play virtual and actual games in a 10,000-square-foot arena.

Little about that model will change in the next locations, except for nuances in art and decor, which will be tailored to individual markets.

The Times Square complex, to be located in the northeast corner 42nd Street and Broadway, will be about 42,000 square feet -- larger than Baltimore's 35,000-square-foot restaurant in the Power Plant.

In New York, the studio grill, screening room and sports arena, familiar to visitors to the Baltimore site, will be on three separate floors.

Disney consistently declines to provide financial details about its individual operations. Larry Haverty, an entertainment analyst with State Street Research and Management Co. in Boston, has predicted that the ESPN Zones will have revenue of $100 million a year within the next five or 10 years.

Industry experts say the Baltimore opening has gone well. Yet, many themed restaurants make a splash initially, then lose favor with a public tiring of the themed concept.

"I'm looking at Planet Hollywood, I'm looking at Hard Rock Cafe, I'm looking at Rain Forest Cafe," said Pat Esgate, an industry consultant and president of Esgate and Associates Inc., in Nyack, N.Y.

Recently, Planet Hollywood and Rain Forest Cafe Inc. have had to retrench because of disappointing financial reports. Hard Rock executives say they have trimmed food prices, increased portions and reduced merchandise prices to compete in a saturated market.


Despite all that, Planet Hollywood opened in June in the Inner Harbor.

Hard Rock has been there for a year.

Rain Forest is slated to open in Towson Town Center next year.

The Baltimore ESPN Zone has netted a good response from locals and brought repeat business, Dickey said. Business has changed little despite the end of tourist season about four or five weeks ago, he said.

Initially, the lines outside signified as long as a three-hour wait. On weekends, the wait is still sometimes two hours, he said.

"How long can they keep people coming back in those doors?" Esgate asked. "That's the question."


The novelty factor will likely last at least six months, and maybe a year, Esgate predicts.

"I always say, 'Show me the repeat business after a year,' " Esgate said. "The real test for Disney's Regional Entertainment developers is long-term repeat business. Because that's where everyone else has failed. I've always said if anyone can do it, it's got to be Disney because they've got the money, creative resources, operational expertise and, most importantly, they've got the audience."

Pub Date: 10/08/98