Who’s Watching Your Bottom Line? Part 1: Sports Marketing Firms

“Conflicts of interest and bribery are classified as corruption,” according to the Occupational Fraud & Abuse Classification System. Recently we’ve seen conflicts of interest so inherent in many industries that they had a part in bringing the global financial market to its knees in 2008 and 2009.

The sports ticket management market is not immune to these inherent conflicts which, if ignored, can cause clouded vision into future decisions by a number of firms when considering sports & entertainment marketing & activation. As Debi Scholar of consulting firm PWC cites in this blog piece, T&E fraud is rampant and causes bottom line losses to your firm. If there is risk in employees committing fraud while your vendors are out to make a buck then who is left watching your bottom line?

To effectively get the most from Sports & Entertainment assets firms need an objective third party with no conflict of interest that can  offer the best practices necessary to drive business and create efficiencies. An objective third party can in no way have their well being and bottom line tied to another aspect of the client’s business or to a prevailing partnership with one vendor if they are to truly look out for a clients bottom line. Simply put: when the rubber meets the road is your vendor looking out for their bottom line first and yours second?

There are a few examples of these conflicts in the current marketplace which we will explore objectively over the next few days. These examples include: Sports Marketing Contracts, Ticket Brokers, & Ticket Suppliers. Part one will focus on Sports Marketing Firms such as Octagon, Paragon, Genesco, Van Wagner, SportsMark, and many others.

A recent trend in sports marketing has  sports marketers attempting to keep as much business in house as possible- even when it is to the deterrent of the customer and not representative of the expertise of such firms.  Spotlight refers to this close-minded approach as “to deflect and protect.”

Sports marketing firms sign major contracts with customers of all sizes to execute a bevy of responsibilities. These responsibilities include: on-site event management, media planning, agency representation, etc. When the subject of ticket management comes up, these sports marketers immediately jump to either try and create their own tool or flaunt one they have already haphazardly built. This is comparable to going to an agency and asking for them to integrate Microsoft Word into their services only to have them attempt to create and program Word themselves. It is inefficient, slow, and terribly overpriced. Best practices suggest a firm simply outsource to the low cost industry leader- in this example, buy Microsoft Word instead of trying to re-invent the wheel. By outsourcing, the customer is guaranteeing consistent upgrades to an already industry leading software consistently proven by the current user base.

Once the application is built the conflict of interest is even more destructive. Many of these firms are in the business of providing growth through sports marketing. If these sports marketers get clients involved in a venture that is not cost effective it behooves them not to bring this to the customers attention as they could lose their entire contract.

Conclusion: sports marketing firms with skin in the game cannot possibly manage event tickets effectively & look out for the customers bottom line. They flaunt technology that is old and archaic, they do not understand workflows and process that will lead to tax deductions and time savings, and continue to venture into aspects of business that are not their focus.

Who’s watching your bottom line?