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THE CORPORATE TICKET    MARKETPLACE    Just as dramatic as the sports venue evolution of   the past 20-plus years are the ...
THE CORPORATE TICKET MARKETPLACE:The following is not a fairy tale…even if it almost reads like one.                      ...
Always In Style: BeingPersonal Seat Licenses                                    NFL Teams with PSLs                       ...
Whereas in 1990 when the corporate VIP marketplace was considered only                               about 3% of the marke...
have all started to keep both the casual fan and now even the            past five years. And some teams –specifically tho...
The Top 20 Business Categories Buying Premium Seats  The answer to the question, “Who buys premium seating?”, is further  ...
two trends tend to offset each other.                                       Many teams, cognizant of what major events are...
THE CORPORATE TICKET MARKETPLACE:An Insider’s Perspectiveof Premium Seating Usageby Fortune 100 Companies                 ...
The most important thing to keep in mind is that an                                                               investme...
THE CORPORATE TICKET MARKETPLACE:How Large Is the Corporate ticketMarketplace?                                The Corporat...
A newly constructed venue normally dedicates nearly 20% of its seating bowlto the premium markets. In terms of dollar volu...
THE CORPORATE TICKET MARKETPLACE:Changes in Premium SeatingOwnership                                Conditions in the prem...
Premium Seat Fact Sheet•		 There are approximately 30,000 suites and 800,000 clubs seats that comprise the    premium seat...
THE CORPORATE TICKET MARKETPLACE:WHAT DO COMPANIES DO WITH $20BILLION IN SPORTS TICKETS?According to the trash can,sports ...
IF YOU HAVEN’T GOTTEN    THAT INVITE YET…                                                                                 ...
Announcing a New Corporate Ticketing ConferenceCTIC: Corporate Ticket Impact Conference        CTIC2013         Corporate ...
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Corporate Ticket Marketplace

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Dramatic changes are affecting how corporate sports fans handle ticket assets. Winning for these customers is now more about the bottom line than points on the field. Learn about the drivers in this dynamic marketplace, how we got here, and more importantly, where we go from here. Download The Corporate Ticket Marketplace report today.

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Transcript of "Corporate Ticket Marketplace"

  1. 1. THE CORPORATE TICKET MARKETPLACE Just as dramatic as the sports venue evolution of the past 20-plus years are the dramatic changes in how the corporate fan handles his ticket assets. So how did we get here? And, more importantly, where do we go from here? Every team’s approach to how they do business with these most-valued customers depends on the answers. By Bill Dorsey, Chairman, ALSD MetLife Stadium is home to the NFLs New York Jets and Giants and the Commissioners Club, one of the most exclusive premium seating areas in all of sports hospitality.
  2. 2. THE CORPORATE TICKET MARKETPLACE:The following is not a fairy tale…even if it almost reads like one. O nce upon a time, a sports fan – a per- The First Generation of the Marketplace: son who bled for his team – was known Contractually Obligated Income by various names. Joe Six Pack was the A person, who uses corporate tickets, in most cases, sits in expen- generic name for all these fans. Some sive premium seats. These seats can be suites, but also club seats, names though were more specific: loge boxes, field boxes, or courtside seats. There are many rooms Cheeseheads braved the frozen tundra in the corporate fan’s house these days. The food that is ordered of Green Bay and sat on cold, wooden is also plentiful and more upscale than the fare offered to Joe Six benches without backs, while the Dog Pounders of Cleveland Pack. Many food options are available, and if the corporate fan competed against the Terrible Towelers of Pittsburgh for status as orders far enough in advance, almost anything can be brought in: the hardiest and huskiest of fans. the best wines, the best food, the best of everything. But over the last 20 years, a new fan has emerged: The Cor- The best of everything costs money. It is not unusual for cor- porate Fan. porations to own multiple suites in multiple venues that cost Now, the corporate fan is not someone who paints his face, and millions of dollars. Some of the larger corporations spend up to he is not someone who sits in the cheap seats, where he can look $100 million for all their sponsorships and premium seats. It’s big out over the stadium rafters and see Russia. No, the corporate fan business. is someone who entertains clients at a game. The corporate fan is Corporate users comprise what is now called the Corporate someone who is creating a captive market situation for himself Ticket Marketplace. It’s been a booming business for more than and the company he represents. It does not mean the corporate two decades now. The Contractually Obligated Income (COI) fan is not a fan, but he also has another prime directive. created by long-term suite leases is what fueled the stadium boom That directive is to drive business. The corporate fan’s goal is in the 1990s. Whereas in 1990 when the corporate VIP market- not primarily the game; the corporate fan’s primary function is to place was considered only about 3% of the marketplace, a new create commerce for the company he is representing. world-class professional venue now usually has nearly 20% of its seats considered “premium.” Those 20% of seats often equate to somewhere around 40%-50% of the total ticket revenues created.A corporate fan’s tickets are called assets. And those ticket revenues often do not include things such as Personal Seat Licenses (PSLs) (see sidebar) that exist in many These assets are tracked, just like any other new venues, primarily in the NFL, where approximately half of the teams now have raised capital for these new sports cathedrals investment. No one really talks about who wins through PSLs. the game or not; a corporate fan talks about ROI THE SECOND GENERATION OF THE MARKETPLACE: of these assets. TECHNOLOGY AND FAN EXPERIENCE The gentrification of the venue marketplace is alive and well. Tickets Become Business Assets Besides a few icons (e.g., Wrigley Field, Fenway Park, Lambeau It’s an investment of sorts in human capital; “relationship market- Field, Madison Square Garden, Dodger Stadium), nearly every ing” it’s sometimes called. As with any investment, it is expected to team in the country now has itself a venue no more than 25 years pay off down the road. As such, a corporate fan’s tickets are called old, dating back to the Palace of Auburn Hills in Detroit which assets. These assets are tracked, just like any other investment. No opened in 1988 when the Corporate Ticket Marketplace really one really talks about who wins the game or not; a corporate fan began. And even the iconic venues are receiving facelifts. talks about ROI of these assets. How many clients did the cor- After around two decades, the early adopters are going through poration entertain? What were the results of these interactions? another round of renovations. Not always new builds (although Did the corporation secure any new business or maintain existing San Francisco, Minneapolis, Seattle, Las Vegas, and Milwaukee business? all seem to be planning new venues at the moment), many venues The corporate fan that uses these tickets usually needs to file seem to be receiving a facelift of sorts. The shelf life for a new expense reports. He needs to track usage. He needs to file reports venue is very short these days – less than 20 years. on who was at the event and what the business relationship is. Much of that is based on the new sports mantra called Fan He is cognizant of compliance issues, of Dodd-Frank regulations Experience. As player salaries have gone up over the past two de- about entertainment expenditures. If he does not use the tickets cades, the need for buildings to generate revenue has escalated. properly, the corporate fan can, upon occasion, lose his job. Upon As prices have gone up though, some fan amenities, including occasion, the corporation sends people to the suite to oversee their technology in the venues have not kept pace. The result? Fans will investments. Sometimes, it’s done clandestinely: a kind of secret NOT come to the venues if their cell phones don’t work. High shopper program for the corporate world. definition television, games on the Internet, and less costly F&B48 | S E A T | www.alsd.com | #SEATWinter2013
  3. 3. Always In Style: BeingPersonal Seat Licenses NFL Teams with PSLs Dallas Cowboys special is no longer an amenity; it’s a necessity.Personal Seat Licenses (PSLs), sometimes called Charter In the 10,700-square-foot New York GiantsOwnership Agreements, are stadium financing tools, Commissioners Club, members New York Jetsprimarily existing in NFL venues. Approximately half of enjoy a destination of luxury Carolina Panthers with dark rich wood and plushNFL venues (15 teams) have raised capital through PSLs Oakland Raiders velvet and leather furniture.to construct these buildings. There are two or three St. Louis Ramsteams currently building new venues which will also Baltimore Ravensoffer them: San Francisco 49ers, Minnesota Vikings, and Tennessee Titanswhatever team ends up in Farmers Field in Los Angeles. Philadelphia Eagles PSLs are not only for the corporate fan. They are Chicago Bearssold to nearly everyone in the venue. But the corporate Houston Texansfan is the person who is charged the most, especially Pittsburgh Steelersin markets such as Dallas and New York, where PSLs Cleveland Brownscan reach six figures for the absolute best seats in Cincinnati Bengalsthe house. Because a PSL is needed to obtain a good Seattle Seahawksseat in many NFL venues, they can be purchased as acommodity. Several companies offer them similarly to Average PSL Revenue Per Team:buying a ticket on the secondary market. $144.2 million Average Number of PSLs Sold Per Team: 48,221 Teams Using or Potentially Using PSLs in the Future: San Francisco 49ers Minnesota Vikings Los Angeles franchise (Farmers Field) #SEATWinter2013 | www.alsd.com | S E A T | 49
  4. 4. Whereas in 1990 when the corporate VIP marketplace was considered only about 3% of the marketplace, a new world-class professional venue now usually has nearly 20% of its seats considered “premium.” Those 20% of seats often equate to somewhere around 40%-50% of the total ticket revenues created. Who Occupies Premium Inventory? Realistically, there is only a small percentage of the cor- Growing Industries porate market that can afford suite ownership. Consider Attorneys/Legal Services the following breakdown: Insurance Assume your suites lease for an average of $200,000 Business/Management Consulting Services per year. How much revenue would a company have to Accounting, Auditing & Bookkeeping generate to afford such a level of investment? The an- Telecommunications swer depends on the profit margin of their industry, but Beer, Ale, Wine & Liquor Distributors we will use 1% of gross sales (that would equate to 5% Doctors Offices of net sales if profit margin is 20%). So to be considered a legitimate lease candidate, a company should gener- Shrinking Industries ate at least $20 million in sales. Banks, Bank Holding Companies & Credit Unions Eliminating non-prospects such as retail, churches, Television, Radio & Newspaper schools, etc., there are a total of 4.9 million business- Finance & Investments to-business (B2B) organizations in the United States. General Contractors & Home Builders Of the 4.9 million companies, only 2.5% (124,824) have Real Estate Agencies & Managers sales of $20 million or more. By changing our param- Car Dealers eters to those companies with minimum sales of $40 Mortgage Brokers & Loans million, only 1.2% of companies would qualify. Real Estate Developers These figures may seem discouraging, but they Title Companies confirm that suite sales professionals must become Plumbing, Heating & Air Conditioning Contractors more flexible and creative moving into the future. One way to capitalize on the wants of companies to be suite Status Quo Industries holders without being limited to the size of the markets Casinos listed above is to offer suite sharing opportunities. Business Services NEC Suite sharing allows multiple partners to enjoy all Restaurants & Caterers the amenities associated with a suite at a fraction of the Holding Companies & Other Investors cost. For example, four partners share a suite for the Manufacturing Categories season at $60,000 each. Your gross revenue has just increased by 20% with the suite generating $240,000 Counter-Cyclical Industries instead of $200,000. Computers/High-Tech Using the same formula as above, $6 million or more Collection Agencies in annual sales becomes the qualifying threshold for Credit & Debt Counseling Services companies to be suite share candidates. The market- Pawnbrokers place at that level is three times larger than the market- Check Cashing Service place for single lease clients: 380,906 (7.7%) companies Apartment-Related Companies generate at least $6 million in sales. Educational/Training Companies A lot has changed over the past five years. Compa- Discount Chains nies that were once premium customers could be out Fast Food Restaurants of business now; and some industry segments that Auto Repair were booming are suffering now. In addition, counter- Medical-Related cyclical industries have emerged, are now thriving, and Remodeling Contractors are a viable target for suite sales. Self-Storage Below are business categories occupying premium space in four segments: growing, shrinking, and status – Ron Contorno, Full House Entertainment Database Mar- quo as well as counter-cyclical. keting and Dr. Heather Lawrence, Ohio University50 | S E A T | www.alsd.com | #SEATWinter2013
  5. 5. have all started to keep both the casual fan and now even the past five years. And some teams –specifically those in the largest The Big Event: A Supercorporate fan at home. markets such as New York City – have apparently gone too far. Bowl suite usually commands Teams are beginning to realize that if you charge more, you While the rest of the bowl is nearly full, the most valued tickets in upwards of $300,000 for primehave to provide more. Corporate fans especially realize this reality some of these markets are going unsold. Corporations – despite locations. The Commissionersbecause they are buying the boxes or the club seats in many cases all the amenities they receive – are cutting back in some of these Club will certainly qualify as a prime location when MetLifeto impress the people they invite. It has to be special. Being special markets. Stadium hosts Super Bowlis no longer an amenity; it’s a necessity. New York City has had the most difficulty in this area. MetLife XLVIII in 2014. And so the 21st century venue, in order to cater to the com- Stadium had significant occupancy issues when it opened, espe-panies who can afford these high prices, is attempting to provide cially for the New York Jets. The New York Yankees too have hada truly unique experience. Nowhere is this more evident than for their premium seat issues; although to be fair, Madison Squarethe corporate fan. Garden was actually able to raise premium prices. The corporate fan coming to a game today often has access to The reason teams/venues no longer can “build it and they willthe following: come” is partially money, partially political correctness (the cor-• The best seats in the house porate fan doesn’t want to appear as Nero while Rome burns),• The players and the field and partially because they have been there and done that. The• Their suite during non-gamedays secondary market has also emerged with a ready supply of tickets• Special clubs or nightclubs at the venue available, at least for club seats. Many companies simply cherry• High-tech innovations such as fantasy game rooms or iPads pick the games they want. There is probably not one reason just as in the suite or loge box there is assuredly not one magic bullet to get lost customers back.• Mobile food ordering systems Occupancy rates have dropped in many cases, although they• Added-value amenities such as holiday gifts, food tastings, have stabilized from a couple years ago. But while occupancy golf outings, etc. rates have somewhat stabilized, the term length of the lease has• Rights of first refusal for non-contracted events: concerts, gone down. Gone are the days of the 10-year lease, except for major events such as the Super Bowl or the Final Four (in new builds in major markets for the biggest of sports such as the some cases), and other events San Francisco 49ers in the NFL. Most teams today accept much• The ability to hold meetings with full Internet access shorter lease terms. Contracts with corporations also often allow• Wi-Fi installations for full reception on mobile phones for suite sharing. In some cases, they are now even allowing suite re-selling, especially for those companies who have long-termOccupancy Rates and Lease Lengths Decrease leases and cannot get out of their lease because of their contrac-Clearly, the corporate fan is catered to…at a price. There’s the rub. tual obligations.Teams, with the ongoing and seemingly endless task of raising Specific contracts with corporations are also custom writtenrevenue, have continued to raise prices for premium seats. This has in some cases. The buyers, i.e., the big corporations, often havenot been an easy thing to do during the Great Recession of the a great deal more power in negotiations than they once did. The #SEATWinter2013 | www.alsd.com | S E A T | 51
  6. 6. The Top 20 Business Categories Buying Premium Seats The answer to the question, “Who buys premium seating?”, is further Overall Analysis: investigated here, listing not only the top 20 business segments, ALL Business/Corporate Premium Seating Customers but additional breakdowns, including employee size, annual sales revenue, and business status (headquarters, branch, independent). Employee Size: The top 10 industries alone represent 35% of all the business types Less than 5 Employees: 26% that buy premium seating. 5 - 9 Employees: 11% These new insights are the result of Full House Entertainment 10 - 19 Employees: 11% Database Marketing partnering with the Ohio University Center 20 - 49 Employees: 16% for Sports Administration. Over 13,000 professional sport premium 50 - 99 Employees: 11% seating customers have been analyzed, and Full House and Ohio 100+ Employees: 25% University are excited to share the top industries that lease suites and other premium inventory (club seats, VIP clubs, etc.): Sales Volume: Attorneys/Legal Services Less than $1 Million: 28% Insurance $1 - 2.5 Million: 13% General Contractors & Home Builders $2.5 - 5 Million: 10% Oil $5 - 10 Million: 10% Business & Management Consulting Services $10 - 20 Million: 9% Doctor’s Offices $20 - 50 Million: 9% Banks, Bank Holding Companies & Credit Unions $50 Million+: 21% Real Estate Agencies Food and Grocery Manufacturers & Distributors Location Type: Finance & Investments Headquarters: 15% Manufacturers of Industrial & Commercial Machinery Branch: 14% Accounting, Auditing & Bookkeeping Independent: 71% Television, Radio & Newspapers Plumbing, Heating & Air Conditioning Contractors Restaurants & Caterers – Ron Contorno, Full House Entertainment Database Marketing Engineering Services and Dr. Heather Lawrence, Ohio University Trucking Car Dealers Electrical Work (Electricians) Dentist Offices contracts often favor the buyer. Corporations, who recognize they years: the “retention” expert. Because it is much easier to keep an have newfound leverage, are negotiating better deals for them- existing customer than to find a new one, retention has become selves. And teams tend to acquiesce. It’s not unusual to have many the watchword of the day. And in places such as Oklahoma City, versions of the standard suite contract in the same venue. the Thunder in the NBA have hired not one or two retention ex- What kinds of changes are being made to contracts? The es- perts, but 14 of them. calator clauses in the contracts have gone away or are very small; The days when business is taken for granted are long gone. The suite owners, in some cases, are given renewal credits or are al- days when premium staffs were one person are nearly gone. Staff- lowed to re-sell their suite; and sometimes, they can negotiate the ing has gone up; customer service has improved; and corporations “big events” coming up years in advance. That is something that are the beneficiaries of teams who need to work harder to main- would never have happened back in the take-it-or-leave-it glory tain their business revenues. days from 1990 to around 2007. The Corporate Ticket Marketplace Becomes a Retention Becomes the Watchword of the Day $10 Billion Industry Times have changed. The market has changed. The way teams do There are many factors to consider when judging the actual size business needs to change. And in many respects, it has changed. of the premium seat market. Depending upon your definition of First off, customer service has evolved tremendously. No longer premium seating, it is determined that there are approximately do teams sign contracts and then virtually ignore the customer 30,000 suites and 800,000 club seats in the five major sports, plus until the contract comes up. Now, the teams specifically reach colleges, minor leagues, racing venues, and portable hospitality. out and “touch” the customer multiple times. The suite directors This equates to a $10 billion industry. charged with this task, at least the good ones, get to really know Of this $10 billion, about $5 billion is in the professional ranks, their customers, including birthdays. They are professional con- $5 billion among the remaining levels. While stadiums, especially cierge assistants. in the college ranks, have built out new premium spaces in recent Meanwhile, a new title has emerged over the past couple of years, many teams have downsized their premium offerings. The52 | S E A T | www.alsd.com | #SEATWinter2013
  7. 7. two trends tend to offset each other. Many teams, cognizant of what major events are in their build- The $10 Billion Industry: The professional ranks have 141 teams; the college ranks in- ings years in advance, make sure their leases with the corporations In North America, there areclude about 500 universities. Minor leagues also contribute heav- take the major event into account in several ways: 1) they use the approximately 30,000 suites and 800,000 club seats in theily to the $5 billion. For example: there are more total suites in mi- event as a bonus for signing a long-term lease, and 2) they include five major sports, plus colleges,nor league baseball than there are in MLB because the number of the event and justify a much higher cost for the lease than the minor leagues, racing venues,teams is so much higher. But minor league suites tend to cost only market would normally bear. and portable hospitality.about 33% (or even less than that) of suites at a MLB stadium. This equates to a $10 billion Premium seating consists of both club seats (including court- The Next Few Years industry.side) and suites, loge boxes, field boxes, and various “clubs” which Negotiating leverage will continue to be on the side of the corpo-exist in the venue. Club seating, the most expensive seat in the rate consumer for the next few years it now appears. But teams arehouse on a square footage basis, is about 60% of the total market- getting smarter. They are beginning to custom build venues spe-place. Too many teams, realizing this, have built out too many club cific for their marketplace, with just the right number of premiumseats in the past. This problem also is being rectified. seats that the market will bear. They are offering more and more Sponsored spaces and naming rights in premium spaces is not value to corporations, especially in the way of unique amenities.included here. Neither are Personal Seat Licenses and season And they are beginning, through sophisticated database tech-ticket bases which have existed for generations. Also not included niques, to distinguish between the business-to-business customerhere is the concert industry which varies greatly depending upon and the more casual business-to-consumer customer.the touring acts and the price points for those acts. As a result, occupancy rates seem to be going back up for the teams. And if there is anything the teams do understand, it is theThe Big Events concept of leverage. So corporations need to understand betterThe concert marketplace is very much like the event market- what is available to them and what is not. It’s a give and takeplace for sporting events. What the Super Bowl is to premium, world out there, and corporations need to know if they are thethe Rolling Stones are to concert venues. The cost of premium giver or the taker these days. #seats, not included in this $10 billion fee, is enormous. A SuperBowl suite usually commands upwards of $300,000 for a decentbetween-the-20s location. How is your team adjusting to the changing Corporate Ticket Marketplace? For major events such as the Super Bowl or Final Four, corpo- Write to Bill at bill@alsd.com, and connect with him onrations often are given the option to purchase suites at very high LinkedIn at www.linkedin.com/pub/bill-dorsey/6/125/76a.rates. Those who don’t take the option, give up their suites for theevents. #SEATWinter2013 | www.alsd.com | S E A T | 53
  8. 8. THE CORPORATE TICKET MARKETPLACE:An Insider’s Perspectiveof Premium Seating Usageby Fortune 100 Companies The following information contains highlights and insights wasted without activation. The goal is to exceed a stan- gathered from interviews with 15 Fortune 100 company dard experience and provide a premium experience that insiders. attendees will remember for years to come. Premium seating is an important tool to distinguish a business Why do companies invest in premium seating, i.e., deal from other options a client may have, so company what are your primary objectives? employees need to use premium seating as a tool to do Primary objectives include: their jobs more effectively. 1. Driving business growth and adding new business 2. Retaining and providing hospitality to current clients What have been the best activation examples involv- to nurture an established relationship ing premium seating within your company? 3. Establishing relationships with teams and properties Activation can be as simple as staging events or meetings 4. Accessing premium space for business entertain- for clients and prospects because the suite environment ment impacts them more than being in a conference room. 5. Developing client loyalty Further, it becomes a great touch point to use a player or coach because these appearances make those in the suite Do companies use premium seating inventory as an feel special. Providing key clients with tickets to entertain employee incentive? their own clients also goes a long way. Another form of For the most part, companies are discouraged and activation is to offer prizes in the suite during the game as hesitant due to IRS regulations requiring reporting of an added value to those in attendance. gifts over $25. Several compliance departments prevent this practice, and they have policies that dictate that this As a leader in luxury suite ownership in multiple facili- resource is used for business first. Several companies offer ties, what tool/method do you use to manage your employees tickets at the last minute, but these practices ticket inventory? are not used as an incentive. The majority of insiders are using tracking software to monitor attendance, employee usage, and unused, used,The majority of insiders are using tracking software and charitable tickets. The most referenced software pro- grams are Spotlight, Ovations, and TicketOS. The biggest to monitor attendance, employee usage, and reason for using ticketing software is for ease of auditing. unused, used, and charitable tickets. The biggest There are still some companies that use spreadsheets and a listing of available games to distribute on a first-come, reason for using ticketing software is for ease of first-served basis. Others indicate they set up a matrix auditing. and identify the tickets for each game, splitting them between divisions of the company. Does your company use return on investment (ROI) Some companies are donating tickets to charity. If when evaluating the value of your premium seating? your company has done this, how do you track the In some instances, companies track data to show the value of the tickets? impact to business, but this evaluation still only provides There are differing procedures amongst the participants; one data point. An area of agreement among the partici- some track them and some do not. Some examples of pants is that there is not an exact science to determine responses include: ROI on premium seating; however, each company should 1. The tickets are not tracked unless they are going to find what works best for their senior management. go unused 2. The cost is tracked at either the retail price or the How important is activation (reinvestment) relative to cost of standing room only premium seating? 3. The 5031C number is entered in the database and Most of the insiders feel money and time are being the tickets are released to the charity54 | S E A T | www.alsd.com | #SEATWinter2013
  9. 9. The most important thing to keep in mind is that an investment in premium seating is about creating a unique experience and not always about the game or matchup. Leveraging the connection to the team is the critical element.4. The value is based on the overall value of the part- nership, not the individual value of a ticket5. Goodwill cannot be measured; it is a great gesture when the tickets would otherwise go unusedHow has being linked to premium seating and corpo-rate sponsorship in sports changed in light of today’seconomic challenges?The biggest change is being forced to be more practicaland accountable. Since the senior executives are more ac-countable, others in the company have to show value inwhat they are doing. Overall, premium seating inventoryhas been decreased due to pressures related to spend-ing and low usage rates. One concern from the insidersis that prices have increased. Also reported is the greaterdifficulty to fill a suite than three years ago. It is morechallenging to find clients willing to attend; either theyare not willing, or internal rules and company policieshave changed, making it difficult for them to attend.What do you think the person/company with onesuite can learn from Fortune 100 companies that ownmultiple suites?It is critical that the person/company that has the suiteestablish objectives before buying and have a trackingmechanism to ensure tickets are being utilized for the in-tended purpose(s). Tickets should not be given to peoplewho are not influencers in the decision-making process ofbuying the person’s/company’s products/services. Ticketsshould be annually rotated, allowing one to hit differ-ent targets. The most important thing to keep in mind isthat an investment in premium seating is about creatinga unique experience and not always about the game ormatchup. Leveraging the connection to the team is thecritical element.– Dr. Peter Titlebaum, University of Dayton, Dr. Heather Lawrence, Ohio University, Dr. Christopher Moberg, Ohio University, and Ms. Christina Ramos, Ohio University Branding Bullseye: At Target Field, home of the Minnesota Twins, Cambria uses its suite as a “design studio” to activate its brand for guests 100-125 times a year. #SEATWinter2013 | www.alsd.com | S E A T | 55
  10. 10. THE CORPORATE TICKET MARKETPLACE:How Large Is the Corporate ticketMarketplace? The Corporate Ticket Marketplace in stadiums and arenas in the top 75 markets in the United States is a $10 billion industry that consists of approximately 30,000 suites and 800,000 club seats. Below is a summary of market breakdown analyses from the ALSD Research Division. The Changing Landscape: Analysis: Changing Premium Seat Paradigm Size of Luxury Suite Market • 1990: 3% of all seats were Premium Top 75 Markets • 2012: About 20% of all seats in new- • Total Number of Suites: 30,000 ly constructed venues are Premium • NOT including Play Games, Concert Marketplace Breakdown of Suites Premium Seating • Total Number of Suites in the Five Major Sports: 12,000 Suites Number of Premium Seats • Will increase 10-20% in next 6 years (Club Seats): to approximately 14,000 Suites At least 800,000 in top 75 markets • Total Number of Remaining Suites: College Market - Approximately 12,000 Suites Racing, Golf, Minor Leagues - At least 6,000 Suites56 | S E A T | www.alsd.com | #SEATWinter2013
  11. 11. A newly constructed venue normally dedicates nearly 20% of its seating bowlto the premium markets. In terms of dollar volume, a new venue’s revenuecan attribute close to 50% of its attendance revenue to premium seating. Thispercentage can be even more if you include premium seat financial tools thatgenerate income such as Personal Seat Licenses (PSLs). By 2008 Market Size Total Ticketing Revenue for • Approximately $10 billion total Premium Seating approaches • Professional Sports: $5 billion between 33.33% to 66.67% for most new venues • Remaining Markets: $5 billionThe five major sports have become dependent on premium seating revenueas construction has trended upwards in recent years as evidenced by the databelow. Size of Marketplace Overall Premium Seat Growth Number of Suites/Premium Seats Going Higher Total Suites Growth Rate Total Club Seats Growth Rate Total Premium Seats Growth Rate 1997 8585 - 199484 - 331844 - 2002 11257 31.12% 387287 99.14% 568999 71.47% 2007 12175 8.15% 480595 24.09% 675395 18.70% 2012 14152 16.24% 620865 29.19% 847297 25.45% Overall Luxury Suite Growth #SEATWinter2013 | www.alsd.com | S E A T | 57
  12. 12. THE CORPORATE TICKET MARKETPLACE:Changes in Premium SeatingOwnership Conditions in the premium seating industry might be Another little-considered factor is food and bever- characterized in a single statement: Times are changing. age (F&B) service. Most do not know or understand the Common thought has always dictated that, if you secure a role that F&B plays in the premium seating industry. The client, they are yours for a long-term deal. This is true today expectation is for the highest quality product with impec- for a few select markets only. For the vast majority, it is the cable execution; however, most are unaware of all the exception, not the rule. preparation that goes into preparing for the event. A great The old rules for prospecting clients, selling suites, deal happens behind the scenes from the management to measuring value, and servicing clients are outdated. The the service to the training of the employees. The end result landscape of premium seat ownership has changed. The is obvious, people eating and drinking, but the daunting current economy, along with the aging of some venues, preparation that goes into each game is not. requires that sales professionals look to the research and Over the last few years, revenues from premium seating become more educated about current trends in order to have faced significant pressure due to economic turbu- retain customers. lence and rampant corporate downsizing. Service repre- The economic recession of the last five years has had an sentatives have the opportunity to turn the challenges of impact on the premium seating industry. Companies must the last decade into an additional stream of revenue for now justify their expenditures to their boards, customers, the sporting organization/venue. The strategies examined and even the public more than they ever have in the past. to leverage new industry conditions will help all premium It is up to sales professionals to understand and translate sales and service representatives achieve greater results the value of ownership to assist owners in justifying contin- and increase sales. Premium seating sales executives who ued spending in this area. Premium seating sales profes- understand their current and future clients and are willing sionals must know how their clients plan to grow their to meet their wants/objectives will stand apart from others business. Most importantly, they must be able to clearly and solidify profitable and long-term mutually beneficial articulate how the suite plays a critical part in achieving relationships with their most valuable clients. their objectives. Take-a-ways on winning in today’s corporate ticket marketplace: Companies must justify their expenditures to their 1. Teams need to understand it takes more to keep a customer today. boards, customers, and even the public. Sales 2. Stop assuming those who purchased premium professionals must translate the value of ownership seating know how to activate their purchase. 3. A plan is needed by those who purchase premium to assist end users in justifying continued spending. seating to payoff long term. 4. The suite administrators should know the goal of the purchase of premium seating which helps in The industry is getting creative in its approach to making sure ticket inventory does not go unused. changing trends. Venues are offering variable terms to get 5. Food and beverage has the power to make an owners to commit to renewing premium seating. Some event special. Insight is needed in creating value teams are already reducing suite ownership to sharing by varying the menu. arrangements that could result in as much as 50% or less 6. The three most important perks to purchasers of ownership. Some companies may divest its suites entirely premium seating is free parking, high-end gifts as they choose to use their limited resources elsewhere. and experiences like traveling with the team, and Other solutions are possible. Teams have to under- getting down to the playing field. stand the importance of suite administrators to the suite 7. Billing is an issue for premium seating customers industry. These individuals are the link between the suite who believe they should not be given different purchasers, users, and team and are in the trenches of suite bills for tickets and food and beverage. management on a day-to-day basis. The owner can also be 8. Many top executives do not believe ROI is the best more effective by explaining the underlying reasons why way to evaluate a premium seating purchase; they premium seating was purchased and how to best manage seem more comfortable with a ROO model. this inventory. The end result is a win-win situation for all involved and a greater understanding of what is going on – Dr. Peter Titlebaum, University of Dayton behind the purchase.58 | S E A T | www.alsd.com | #SEATWinter2013
  13. 13. Premium Seat Fact Sheet• There are approximately 30,000 suites and 800,000 clubs seats that comprise the premium seat marketplace in North America.• In terms of dollar volume, the market has been conservatively estimated to generate $10 billion per year which only accounts for sports, not the concert or entertainment side of the equation.• For a new building in a major market, premium seating now generates nearly 50% of the total ticketing revenue. Much of this income is not considered part of revenue sharing with the league or its franchises.• In the past 20 years, nearly every sports team in the country has constructed a new building, almost entirely as a result of premium seating and the contractually obligated income (COI) it creates.• Premium seating consists of both luxury suites and club seating. Club seating, individual seats in great locations in the venue, are 60% of the marketplace.• If sold on a per-square-foot basis, club seating is the most expensive seat in the house. The most expensive club seating is courtside seats. Often, the front row of courtside seats is more than double the cost of the second row of courtside seats.• The most expensive suites are for the Super Bowl. However, the greatest revenue brought in for suites in the US Open tennis tournament. Suites for this event are sold twice a day for a two-week period.• Food and beverage is a large component of the suite marketplace. Nearly 20% of the total cost of a suite can be allocated to F&B alone.• Occupancy for the premium seat marketplace has dropped a bit since the fall of 2008. But a second generation of premium seating is now being developed with new innovative approaches.• The face value of the average ticket owned by a business is $154.• The average ticket owned by a business is used to entertain $107,624 in potential or current revenue.• The average ticket bought on the secondary market by a business is $366 per ticket. #SEATWinter2013 | www.alsd.com | S E A T | 59
  14. 14. THE CORPORATE TICKET MARKETPLACE:WHAT DO COMPANIES DO WITH $20BILLION IN SPORTS TICKETS?According to the trash can,sports tickets aren’t worth much. WHO DO COMPANIES GIVE TICKETS TO?Companies throw away more ticketsthan most fans will see in a lifetime. Marketing 1% Other 6% Our team executives believe thatIn fact, 43% of all tickets owned by Business 42% of the tickets used by business Sponsorshipbusinesses go unused. The average 12% Development 58% are used for revenue growth. In fact: 3 out of every 4 tickets a companybusinessperson uses only 7.8 tickets Personal Use owns go to potential or currenttotal each year. But if tickets are 4% customers.used correctly, they are worth every Companies plan early for the mostpenny. When a businessperson Employee valuable tickets: Of the 76% of Reward 12% tickets going to businessinvites a guest to a game, that guest development, almost all arerepresents $161,544 in revenue for New Clients distributed within the company a month or longer before the eventthe company. An average luxury 5% Charitablesuite at just one game costs a Donation 2% More than 90% of tickets used forcompany $3,080 and hosts $2.58 Employee Rewards are given out at Business Development Charitable Donation New Clients the last minutemillion in potential revenue. Employee Reward Marketing Personal Use Other Sponsorship The following graphicalinformation comes courtesy ofSpotlight Ticket Management’scorporate customer study whichpulled data from over 4,000companies and 5 million tickets.This sample is the broadest scope of AND THE MOSTcorporate ticket data available from2012 and includes a range of small POPULAR LEAGUE IS… 35% Ticket numbers only go so far.companies with hundreds of ticketsto enterprise giants with tens of 30% We don’t just track the ticketmillions dedicated to entertainment assets themselves, we also 25% measure the demand.spend annually. All ticket data is anonymous. 20% For a not-so-popular game, youSpotlight has maintained the may have one person asking for 15% 30% 30% one ticket while the big gameintegrity of data by adjusting for has fifty staffers fighting over theoutliers and understanding the 10% 17% same ticket.economic differences between each 12% 5% The NFL is far and away the most popularmajor region. 6% 4% league for corporate entertainment today 0% with over 5 people asking for each ticket. The next closest: the NBA with 1.4 people College MLB NBA NFL NHL Other* asking per ticket Sports *Other includes Golf, Concerts, Broadway Shows, and other live events purchased regularly by businesses60 | S E A T | www.alsd.com | #SEATWinter2013
  15. 15. IF YOU HAVEN’T GOTTEN THAT INVITE YET… Most believe tickets are a last 25% minute item. That is not the case for businesses. In fact, 20% most companies know who is going to the game more than a month in advance. 15% 23% 24% 10% 20% 13% 11% 5% 9% 0% 0 to 7 Days 8 to 14 15 to 30 31 to 60 61 to 90 90+ Days Days Days Days Days There’s a good chance the person you see up in the suite works in finance. Telecom Insurance 3% 3% Technology 3% Real Estate Over half of all sports Professional Services 4% Consumer Products tickets are owned by 15% 4% only 5 industries: Banking 5% Energy & Utilities 14% Health Care 1. PROFESSIONAL 5% SERVICES 2. ENERGY AND UTILITIES Financial Services Construction 11% 5% 3. FINANCIAL SERVICES 4. MEDIA Media 5. LEISURE 8% Leisure Food & Beverage 8% 6% Automotive 6%*Ticket ownership by industry represents the number of tickets owned by each industry as classified by Dun & Bradstreet.Each firm is represented in their Dun & Bradstreet industry in the study with over 1000 firms used to compile data. #SEATWinter2013 | www.alsd.com | S E A T | 61
  16. 16. Announcing a New Corporate Ticketing ConferenceCTIC: Corporate Ticket Impact Conference CTIC2013 Corporate Ticket Impact Conference April 16, 2013 MetLife Stadium For buyers and sellers of premium seating intended to maximize the value of corporate ticket assets The Corporate Ticket Marketplace is undergo- “We decided to do this show after we could clearly see ing a paradigm shift. What used to work no longer works that the corporations and teams were not on the same as well when it comes to selling premium seats. page in terms of marketing objectives,” says Bill Dorsey, As a result of the marketplace shift, the ALSD is Chairman of the ALSD. “Teams were too often selling real presenting a one-day Corporate Ticket Impact Confer- estate; corporations were buying the experience and ence (CTIC, pronounced C-tick) intended to solve the return on their business objectives.” pain points that many corporations feel currently when “What is needed is a better understanding of busi- it comes to the millions of dollars of ticket assets they ness goals and objectives,” continues Dorsey. “Our annual purchase. Suite Holder Focus Group at the ALSD Conference each This is a show with a point-of-view from the premium year is almost always our most highly attended session. seat ticket end user. We wanted to expand upon what we have learned from Subjects covered at this April 16th conference at these sessions. CTIC allows us to do that. Teams can MetLife Stadium, home of Super Bowl 2014, will include: understand better the corporate objectives, and corpora- tions can better understand how the teams operate.” • Ticket Utilization CTIC is expected to draw between 300 and 500 at- • ROI and ROO tendees. More corporations than teams are expected to attend. There is a $500 cost for the day at MetLife Stadi- • Ticket Management, De-Bundling um; it does include breakfast, lunch, and a reception and • Electronic Ticket Transfer tour of the $1.6 billion MetLife Stadium. Also included are • Sourcing Inventory for Major Events nearly 50 speakers and 20 sessions. • How to Truly Entertain Your Best Customers For more information, go to www.CTIC2013.com. • Tickets and Technology Or call: • The Fan Experience Bill Dorsey • Buyer Meets Seller Chairman ALSD 513-674-0555 x102 Bill@alsd.com62 | S E A T | www.alsd.com | #SEATWinter2013

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