Sports Business & Sports Ticket Management Links: Week Ending 1/23/10

CEG’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. PWC released an interesting piece discussing Travel and Entertainment expense fraud and the effect it has on every firm’s bottom line. Sports and event tickets are a major source of internal fraud and few firms have the controls in place to combat it. Too many employees buy tickets under false pretences and through back door deals without a centralized ROI tracking system like Spotlight.

    Fraud costs organizations millions of dollars, causes employee embarrassment, damages corporate image, and intensifies legal and regulatory liabilities. Because many employees have the ability to charge Travel and Entertainment (”T&E”) expenses, and the opportunity exists, T&E fraud is an unknown epidemic in many organizations. Let’s look through a magnifying glass into T&E fraud triggered by employees and understand who may be the perpetrators, why the fraud occurs, what type of fraudulent actions are common, how much it costs, and how to control it. Employees who feel disenchanted with their job, or may need extra money, are not the only offenders of T&E fraud. In the Occupational Fraud and Abuse Classification System,* conflicts of interests and bribery are categorized as corruption. Read More…

Mid-January and still no word on the return of Tiger Woods to the PGA Tour. Ratings are down, attendance is down, sponsorship is down, and the first major of the year, The Masters, will flail in the deep end without a return by Mr. Woods. Tiger will most likely not miss the US Open at Pebble Beach, the course he won the title by 15 strokes on in 2000. David Carter, of Spotlight’s Advisory Board, is prominently quoted in the piece by The Guardian:

  • Figures ranging from $2bn to $8bn have been bandied around but they have quickly been debunked, or revealed as guesswork. “The extent of the financial fallout, which is no doubt severe, is impossible to calculate because golf’s overall wherewithal goes far beyond Woods,” says David Carter, the executive director of the Sports Business Institute at the University of Southern California. “Without his steady play and ability to deliver TV ratings and galleries full of business people, the people associated with the sport will lose potential revenue across the board.” Read More…

The Pistons & Red Wings are in talks to build a new downtown arena that the teams would share. The Pistons have seen some hard times recently with the economy floundering locally and the team not winning on the court while the Red Wings, who own one of the single best home ice advantages at Joe Louis Arena, would bypass more than $10 million in structural upgrade while cashing in on corporate dollars. The question again will beg: what would the return on investment be for sports tickets and suites at a new downtown arena especially during a horrible economy in Detroit?

  • It is possible, perhaps even likely, that within this decade the Red Wings and Pistons will partner to build and share a sports arena in downtown Detroit, sources told The Detroit News. Mike and Marian Ilitch, owners of the Red Wings, have not renewed their lease at Joe Louis Arena beyond this season, and face more than $10 million in structural repair at the dilapidated arena this summer if the team is to play there next season. Going back to The Joe, it seems, is a last resort. So the Ilitches have been looking for a temporary home while they sort out, if, when, where and how they might build a new arena in downtown Detroit. Read More…

Not surprisingly, NASCAR tracks have begun cutting seating capacity at a number of tracks. NASCAR is a very difficult event for corporate sponsors as the hospitality generally requires attendance in large blocks for an entire weekend. The fan base is rabid and the ROI on tickets, when used appropriately, is strong however the waste rate for NASCAR rivals only the PGA. Simply put: there are too many tickets and too many days of events for a firm that doesn’t have a process to track and use their seats.

  • As demand has shrunk for NASCAR tickets, so have the superspeedways that hold Sprint Cup races. Several tracks have sliced their grandstand capacities by several thousand seats after a 2009 season in which attendance was flat or down at virtually every race. Among the biggest drops are Daytona International Speedway (168,000 to 146,000) and Phoenix International Raceway, which dropped by 20,000 seats. With a seating capacity of 56,000, Phoenix (which also sells tickets to a hill overlooking Turns 3 and 4 that can hold 20,000) now has the coziest oval grandstands on the circuit behind Darlington Raceway and Martinsville Speedway (both 63,000) despite being one of NASCAR’s largest markets. Read More…

Naming rights deal continue to come under fire, and rightfully so, in an era where shareholders and executives demand tangible return on investment for any dollar spend. Darren Rovell correctly points out that, many times, naming rights deals are more ego boosters than anything. Rovell challenges Sun Life to justify the recent deal with Dolphins Stadium with tangible numbers. Who are you taking? Do you have suites? Do you have tickets and, if so, how are you using them?

  • Every time a company buys naming rights to a stadium, their executives get challenged. Is this really a good deal? Why does it seem like companies who have put their name on stadiums face greater economic trouble than those who pass on the idea?I think the latter might be more perception than reality –- that the percentage of companies that sign naming rights deals and then file for bankruptcy are somehow much greater than those that don’t sign deals and don’t file for bankruptcy. Read More…

   Forbes UK put together a piece discussing how nationalized firms continued to sponsor sports franchises, players, and events. There is no discussion as to why AIG dropped their shirt sponsorship of Manchester United or how AON plans to capitalize on taking over this sponsorship. Lloyd’s is also mentioned as a major sponsor of the 2012 London Olympcs however with no details on what activation will be. Gary Hoffman, the Chief Executive of Northern Rock, gives a laughable explanation of why they continue to sponsor the Newcasle Club including such proven business techniques as “staying in the public eye.” This kind of foolishness should never be accepted by taxpayers. If you’re spending money on something you need to know why and what you’re getting for your investment

  • Northern Rock, the U.K. bank nationalized by the British government in 2008 during the financial crisis, has renewed its shirt sponsorship of Championship side Newcastle United. The deal is worth between 1.5 million pounds and 10 million pounds to the club over four years from next season, depending on how many of those seasons the Magpies spend in the English Premier League. . Newcastle-based Northern Rock has sponsored the team since 2004 under a five-year 25 million pounds deal. The bank also sponsors local rugby and basketball teams but dropped two county cricket sponsorships in 2008. The soccer renewal has run into criticism for using public money to back a private business. Newcastle is owned by Mike Ashley, the multimillionaire owner of Sports Direct International, which runs chains of sports-goods retailers. Northern Rock chief executive Gary Hoffman defends the sponsorship here. Read More…

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