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Sports Business & Sports Ticket Management Links Of The Week: Week Ending 5/2/10

Posted on May 3, 2010 by SpotlightTMS  •  Leave Reply

Spotlight’s weekly collection of relevant press, tweets, and blogs shaping the world of corporate ticketing. The evolution of Corporate America’s involvement in sports is leading towards more responsibility and better analytics. Please read on for more on: sports sponsorship, sports business, ticket management, corporate accountability, and The Spotlight Ticket Management Solution.

More signs of the thawing of the Great Recession coming from Churchill Downs, who reports that sales are up dramatically from last year’s lows. The 2009 Kentucky Derby was the least attended since Churchill Downs was renovated in 2005.

In 2009 Churchill Downs reported a fall in revenue of $5.2 million during the Spring Quarter in line with a drop in corporate hospitality & betting on the actual event itself. The Kentucky Derby is a wonderful gauge of the economy as there is a strong local economy around the race however the corporate hospitality is buoyed by corporations outside of Louisville.

2009 may have been a down year for the Kentucky Derby at the gates, however it was a tremendous competitive advantage for those firms that took part in it while everyone else hid under their desks. Clients were up for grabs, and responsible firms took the opportunity to entertain them and get their ear.

Did Barney Frank single handedly change the scope of corporate entertainment with his letter to Northern Trust demanding they return funds to the federal government that they “frittered away on lavish events,” speaking specifically about a sponsored golf tournament where the company was hosting an event for top clients and employees in Los Angeles? For the short term, yes he did. And maybe for the best as he demanded tangible evidence of purpose in entertainment as well as transparency when using sports to drive business.  

The economic downtown over the last couple years have caused companies to be more cautious with budgets and eliminate frivolous spend.  Therefore, many of the nation’s largest sponsors have cut the fat, and narrowed their focus on select programs where they see high returns.  In this blog piece by Meetings Net, Bank of America, State Farm and Kia are three companies profiled, all with what they believe to be compelling reasons for their recent success in sports sponsorship.

Bank of America has honed down their sponsorship focus to just a few sports (baseball, football, golf and motor sports).  The bank formally measures the value from all sponsorships and hospitality events and have found the greatest return from Hogans Alley, a mobile hospitality suite used at golf tournaments to entertain top clients and employees.  By strategically measuring the return on all events, Bank of America has proved to be accountable regarding their sponsorship budgets and have concluded that for every $1 spent on sports marketing they return $10 in revenue and $3 in earnings.  This data has been pivotal for the bank in deflecting negative press around these programs as documented in Meetings Net’s piece.

The PGA’s business model is being called into question in this piece appearing in Business Week under the title “Tiger Woods Can’t Fix PGA as Sponsors Flee Lesser Tournaments” with some fairly condemning offerings from the likes of Verizon and GMR Marketing.

For years the PGA has been a bastion for a specific demographic and selling sponsors on their economically attractive fan base. Recent times, however, have seen a number of events lose title sponsorships and major stars being more selective of the events they participate in. Even those that do sponsor events, such as Wells Fargo’s sponsorship of this weekend’s Quail Hollow tournament are afraid to put their name on a tournament for fear of public backlash.

Despite the story and the growing evidence of sponsors falling away from the tour, there is very little to suggest that PGA’s sponsorships don’t deliver. There are plenty of quotes offering conjecture, such as those from GMR and Verizon, however none of them cite any tangible numbers for such business decisions. In the end, however, being called an “unjustified expense” by a prominent business magazine is one of the worst PR nightmares any sports property could imagine.

To sum the article up: The PGA has fallen victim to a sagging economy. The real question is: Is there anything the PGA could have done to protect against such a sag? Companies being irresponsible with their sports sponsorships and sports tickets will always be a risk. However, tools exist in the marketplace that, if adopted by the PGA as they’ve been by so many teams and leagues, could help the PGA in pointing out the major benefits of these deals. Spotlight Ticket Management for on-site experiences is an easy first step.

Are PGA sponsorships an “unjustified expense”? Or are firms like Farmers Insurance and Waste Management jumping into sponsorship deals at just the right time? Time will tell…and hopefully that time comes with a hefty serving of data.

Relevant Sports Business & Sports Ticket Management Tweets Of The Week:

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