NICHE BUSINESSES

Sports Bars Hit a Home Run With Fans of All Stripes

It’s more than a place to just watch a game

When I read the other day that a sports bar in my hometown had just closed its doors I was surprised.

First, because the owner was a former Memphis Grizzlies basketball star, and second because sports bars tend to be among some of the most profitable small businesses.

But, there it was, plain as day, leaping off the pages of The Commercial Appeal.

“Those who showed up at lunch time on Tuesday found locked doors, but the miniature jumbotron inside was on, still showing sports headlines and scores.”

We live in the suburbs, a considerable distance from the FedEx Forum which hosts everything from Memphis Grizzlies, NHL hockey and the University of Memphis men’s basketball to boxing, mixed martial arts and WWE SmackDowns.

Not everyone enjoys the trek to the downtown forum though. There’s the hunt for exorbitantly priced parking spots, $15 hotdogs, and flat, hard seats that leave my lower back aching for days.

So where do folks go if they want to see a game on a jumbotron in the company of a cheering crowd, where hot food is delivered to their tables and cold beer flows all night long?

They go to their local sports bar. And in our community there are numerous spots to fit any taste. Large or intimate, ones with outdoor patios, bars that cater to certain food preferences, ones that are family friendly and others that exude an adult vibe.

The only thing that’s absolutely, positively necessary is that they feature full access to large TV screens and bartenders who can magically deliver adult beverages within minutes.

The other day our next-door neighbor’s cable went goofy minutes before the Tennessee Volunteers vs. Iowa Hawkeyes college football game. Without hesitation, he sprinted into his little Miata, drove three minutes from our cove to a cozy neighborhood sports bar.

He was settled in with his first beer before kickoff. He’s a rabid Vols fan who currently has his mailbox wrapped in orange. Fortunately the Vols beat Iowa 25-20 in the Citrus Bowl.

I was sorry to read about the sports bar that closed. I still don’t know the backstory nor does anyone else I spoke with know why they permanently shuttered for good on the last day of December.

In addition to its massive LED screens, it was the first in the Mid-South to have a Full Swing Golf Simulator featuring more than eighty championship courses. The menu was big on barbecue — a favorite food in Memphis — and it seated almost 150 people.

The bar’s closing got me to thinking about the business of sports bars. I’ve always heard that like liquor stores during a recession, sports bars are money makers that deliver like a winning slot machine.

But how did sports bars become popular in the first place? And what makes them successful?

Early history of sports bars

The game of darts is thought to be the oldest established English pub game. Historians believe it was invented during the Middle Ages and was associated with pubs and taverns throughout Europe.

It’s reported the game developed out of military training and made the leap to a pub game when soldiers decided it’d be more fun to drink ale while throwing sharp pointed objects at a target.

Darts and other table billiards became increasingly popular during the reign of King Henry VII. However, he was disturbed by stories of his military men crowding into bars to drink and play darts.

Because the king believed soldiers spent too much time tippling mead and neglecting their archery practice — an essential military skill—he put restrictions on pubs, including a licensing requirement.

By the 1500’s the game — or the sport — of darts could be found in taverns everywhere. Unlike the VII, Henry the VIII was keen on the game and some historians claim Anne Boleyn even gifted him a handsome set.

U.S. sports bars

By some accounts there are around 1,218 establishments in the U.S. officially classified as sports bars. This sounds ridiculously low to me considering there are some 200,859 restaurants designated as “fast food.”

In 2023 the entire restaurant economy amounted to $789 billion, according to Restaurant Industry Statistics, so I’m guessing there are probably more sports bars that haven’t been counted or accounted for.

Some claim the first genuine, All-American sports bar was started by Jimmy Palermo, a man who was raised in his father’s bootlegger bar during Prohibition and who later served as an Army medic in World War II.

When Jimmy returned from war in the late 1940s he took over the management of his dad’s St. Louis bar called Palermo’s Tavern.

He refashioned the walls with sports memorabilia — photos from his days as a bat boy, along with caps, gloves, and bats that had been used by some of baseball’s best local athletes.

Just as televisions sets were becoming popular, Palermo installed black and white TVs around the bar broadcasting whatever sports were being shown at the time.

He filled the kitchen with casual food he thought would appeal to people who frequented games at Sportsman’s Park, the home field of both the St. Louis Browns and St. Louis Cardinals.

And of course he served plenty of beer from St. Louis’ own Anheuser-Busch Brewery.

Since Sportsman Park was right across the street from Palermo’s Tavern, the bar soon became a magnet for sports fans both locally and for those who traveled to St. Louis for the professional games.

Frequent guests included Ted Williams, Babe Ruth and Lou Gehrig.

Palermo and his family ran the bar from 1933 to 1966. Jimmy Palermo passed away in 2010, at age ninety.

Although Palermo’s Tavern appears to be the oldest sports bar, Legends, opened in Long Beach, California in 1979, claims to be the first modern American sports bar.

Owned by former L.A. Rams offensive lineman Dennis Harrah, Legends was arguably the first to be filled with the most impressive memorabilia, including Mohammed Ali’s boxing gloves, autographed shoes of famous players, and an Indy race car suspended from the ceiling.

Legends was also the first to instill satellite technology to broadcast live sporting events from anywhere on Earth. It boasts a massive bank of the largest HD projection TVs in the U.S.

These are a few of some of the most iconic U.S. sports bars. But almost everyone has probably heard of, and maybe patronized, Buffalo Wild Wings — the nation’s largest sports bar operator with around 1,300 locations in nine countries.

Sports bar food

You can’t talk about the sports bar concept without mentioning one item that’s long been associated with sports bars everywhere in the U.S.

In 1964, Teressa Bellissimo, the Sicilian owner of the Anchor Bar in Buffalo, NY, tweaked her menu in an effort to draw new diners. She searched for some low-cost items that would be tasty and affordable.

She settled on chicken wings. And what we now call “Buffalo wings” quickly became a menu favorite at the bar and eventually throughout sports bars and restaurants in every American city.

Though some dipping sauces may vary, Bellissimo served up her wings with celery slices and blue cheese dressing— simple but tasty.

Surprisingly, her chicken wings invention disrupted the entire multi-billion-dollar sector of American agriculture. According to the National Chicken Council, Americans consume over 27 billion chicken wings per year.

Sports bars are profitable businesses

Sports bars are among the most profitable of small businesses. The profit margin is typically higher than many — some researchers claiming 200% to 400%.

According to Binwise, a beverage inventory management platform, the average gross profit margin is between 70% and 80%, much higher than most retail and automotive which are around 25%.

Naturally liquor sales factor heavily into their success. A beverage program with a consistently low pour cost is at the heart of any profitable sports bar or restaurant.

Sports bars also occupy a popular niche market, and depending on its location, management and marketing, many small or mid-sized sports bars can earn around a million dollars annually.

The mixology of a great sports bar

There are five things that work together to make a sports bar fun, popular and profitable:

1. Lively and comfortable atmosphere

The bar should offer a clean and welcoming atmosphere — a place where you immediately feel at home. Think, Cheers!

My favorite sports bars are ones where they immediately acknowledge you as you walk in — even if it’s the bartender shouting “heya, come on in, how ya doin’?”

It’s important that once you’re inside you instantly recognize what kind of bar it is. TVs should be tuned in to the latest games and you’ll see fun and interesting sports memorabilia decorating the walls.

2. Great food and beverages

The menu should cover all the expected staples — burgers and fries, buffalo wings, and here in Memphis there should be barbecue choices.

There needs to be specialty drinks, craft beers, and a wide selection of cocktails.

3. High-def TVs and visibility

A great sports bar will boast several large high-def TVs with surround sound. Sight-lines should be available to patrons throughout the bar whether they’re at a table or sitting at the bar.

Patrons should be able to view the games from every possible angle.

4. Friendly and fast bartenders

The best sports bartenders are friendly and fast — they’ve got great personalities and they know which games are on, something about the teams, and better yet, they can talk trivia with you.

Also, they’ll keep the food and beverages coming.

5. Games and activities

Between games, the best sports bars offer patrons activities that could include arcades, billiards, darts or other games.

They also offer nights with discounted drinks, trivia competitions, and other special events during playoffs.

Final takeaway

Sports bars have been a part of our culture for many years. The best ones are those that offer a comfortable atmosphere, great food and drinks, friendly staff, easy access to large screen TVs, and activities for patrons to enjoy while waiting for the next game.

Sports bars are not just a place to watch a game — it should also feel like an exciting, welcoming community for people to indulge in, and share, their love of sports.

Thank you for your time and interest!