Smashburger founders' sports bar chain revamps the traditional game-day atmosphere
Tom's Watch Bar Expands Its Presence in Sports Mixed-Use Districts
Tom's Watch Bar, a popular sports bar chain, is set to unveil two new venues in Cincinnati and Milwaukee on Thursday, marking its 18th location since its launch six years ago. The chain, which was originally known as Tom's Urban and was rebranded to Tom's Watch Bar in 2019, has grown steadily, thanks to its elevated menu, commitment to a 360-degree viewing experience on game day, and strategic location near sports venues.
The cofounders of Tom's Watch Bar, Tom Ryan, Brooks Schaden, and Shannon McNiel, bring extensive experience in the restaurant industry to the table. They have partnered with sports franchises across the country, with five locations where the landlord is actually a team or its owner. This unique arrangement allows the teams to retain all the rent they charge, unlike other revenue streams they may have to share with their leagues.
Tom's Watch Bar is known for its meticulous curation of its TV calendar, with the schedule published online well in advance of game day. The chain operates a database of 700 to 800 sites it's considering around the country, including 60 to 70 it's actively reviewing and 10 to 15 where it's in active discussions. The aim is to open two more outlets in 2025, and another 10 to 13 each subsequent year.
The success of Tom's Watch Bar can be attributed to its strategic location near sports venues. Each of its 15 out of 18 units is adjacent to a stadium or arena. The chain's expansion comes at a time when sports-anchored mixed-use districts are on the rise. At least 37 such districts have been announced across the five major North American professional leagues as of December 2024.
The steady foot traffic in these districts can push up the value of stadium sponsorships. SMDs (sports mixed-use districts) produced five times as many visitors as sports venues themselves would generate in a given year. This increased foot traffic contributes to the chain's core business revenue, which has risen about 4% over last year, and its run rate has surpassed $100 million.
Every Tom's Watch Bar location is profitable, with restaurant-level margins exceeding 25% on average and all 18 locations company-owned. The chain has managed to protect itself against the feast-or-famine nature of entertainment districts by structuring some of its rent agreements as a percentage of monthly sales.
The valuations of sports franchises have skyrocketed over the last two decades, but they may have a harder time staying on that trajectory as many of their lines of business are starting to look fully optimized. However, the sports industry could see more than $100 billion in investment over the next 15 years due to these developments. With its strategic expansion and commitment to quality, Tom's Watch Bar is well-positioned to capitalise on these trends.
The Battery, a sports mixed-use district, saw 10.3 million visitors in 2023, with each visitor spending an average of 209 minutes in the district, more than an hour longer than the average MLB game length. This steady foot traffic is a testament to the appeal of sports mixed-use districts and the potential for growth in this sector.
In conclusion, Tom's Watch Bar's strategic expansion into sports mixed-use districts is a testament to its success and commitment to the sports industry. With its unique partnerships, meticulous curation of its TV calendar, and strategic location near sports venues, Tom's Watch Bar is poised for continued growth in the coming years.
