The corporate ticket marketplace has changed dramatically over the past 20+ years. Where individual fans once sat in the cheap seats, corporations now own premium seats like suites and club seats. These premium seats generate 40-50% of total ticket revenue for teams. Corporate fans view their tickets as business assets rather than for personal enjoyment of games. They track usage and ROI. However, occupancy rates and lease lengths have decreased as teams have raised prices. Teams now focus more on the fan experience through amenities and technology to attract corporate fans willing to pay high prices.
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Corporate Ticket Marketplace
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 NFL's New York Jets and
Giants and the Commissioners Club, one of the most exclusive
premium seating areas in all of sports hospitality.
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&B
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3. Always In Style: Being
Personal 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 Giants
Ownership Agreements, are stadium financing tools, Commissioners Club, members
New York Jets
primarily existing in NFL venues. Approximately half of enjoy a destination of luxury
Carolina Panthers with dark rich wood and plush
NFL 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 Rams
teams currently building new venues which will also
Baltimore Ravens
offer them: San Francisco 49ers, Minnesota Vikings, and
Tennessee Titans
whatever team ends up in Farmers Field in Los Angeles.
Philadelphia Eagles
PSLs are not only for the corporate fan. They are
Chicago Bears
sold to nearly everyone in the venue. But the corporate
Houston Texans
fan is the person who is charged the most, especially
Pittsburgh Steelers
in markets such as Dallas and New York, where PSLs
Cleveland Browns
can reach six figures for the absolute best seats in
Cincinnati Bengals
the house. Because a PSL is needed to obtain a good
Seattle Seahawks
seat in many NFL venues, they can be purchased as a
commodity. 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)
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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 University
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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 Super
corporate 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 prime
have to provide more. Corporate fans especially realize this reality some of these markets are going unsold. Corporations – despite locations. The Commissioners
because 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 MetLife
to impress the people they invite. It has to be special. Being special markets.
Stadium hosts Super Bowl
is 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 had
a truly unique experience. Nowhere is this more evident than for their premium seat issues; although to be fair, Madison Square
the 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 will
the 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-term
Occupancy 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 written
revenue, have continued to raise prices for premium seats. This has in some cases. The buyers, i.e., the big corporations, often have
not been an easy thing to do during the Great Recession of the a great deal more power in negotiations than they once did. The
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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. The
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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 are
clude 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 the
ily 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 are
house 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 premium
seats 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 customer
here 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 the
The Big Events concept of leverage. So corporations need to understand better
The concert marketplace is very much like the event market- what is available to them and what is not. It’s a give and take
place for sporting events. What the Super Bowl is to premium, world out there, and corporations need to know if they are the
the 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 Super
Bowl suite usually commands upwards of $300,000 for a decent
between-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 on
rations 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 the
events.
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8. THE CORPORATE TICKET MARKETPLACE:
An Insider’s Perspective
of Premium Seating Usage
by 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 charity
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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 ticket
5. Goodwill cannot be measured; it is a great gesture
when the tickets would otherwise go unused
How has being linked to premium seating and corpo-
rate sponsorship in sports changed in light of today’s
economic challenges?
The biggest change is being forced to be more practical
and accountable. Since the senior executives are more ac-
countable, others in the company have to show value in
what they are doing. Overall, premium seating inventory
has been decreased due to pressures related to spend-
ing and low usage rates. One concern from the insiders
is that prices have increased. Also reported is the greater
difficulty to fill a suite than three years ago. It is more
challenging to find clients willing to attend; either they
are not willing, or internal rules and company policies
have changed, making it difficult for them to attend.
What do you think the person/company with one
suite can learn from Fortune 100 companies that own
multiple suites?
It is critical that the person/company that has the suite
establish objectives before buying and have a tracking
mechanism to ensure tickets are being utilized for the in-
tended purpose(s). Tickets should not be given to people
who are not influencers in the decision-making process of
buying the person’s/company’s products/services. Tickets
should be annually rotated, allowing one to hit differ-
ent targets. 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.
– 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.
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10. THE CORPORATE TICKET MARKETPLACE:
How Large Is the Corporate ticket
Marketplace?
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 Suites
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11. A newly constructed venue normally dedicates nearly 20% of its seating bowl
to the premium markets. In terms of dollar volume, a new venue’s revenue
can attribute close to 50% of its attendance revenue to premium seating. This
percentage can be even more if you include premium seat financial tools that
generate 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 billion
The five major sports have become dependent on premium seating revenue
as construction has trended upwards in recent years as evidenced by the data
below.
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
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12. THE CORPORATE TICKET MARKETPLACE:
Changes in Premium Seating
Ownership
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.
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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.
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14. THE CORPORATE TICKET MARKETPLACE:
WHAT DO COMPANIES DO WITH $20
BILLION IN SPORTS TICKETS?
According to the trash can,
sports tickets aren’t worth much. WHO DO COMPANIES GIVE TICKETS TO?
Companies throw away more tickets
than most fans will see in a lifetime.
Marketing 1% Other 6% Our team executives believe that
In fact, 43% of all tickets owned by Business 42% of the tickets used by business
Sponsorship
businesses go unused. The average 12%
Development
58%
are used for revenue growth. In fact:
3 out of every 4 tickets a company
businessperson uses only 7.8 tickets Personal Use owns go to potential or current
total each year. But if tickets are 4% customers.
used correctly, they are worth every Companies plan early for the most
penny. When a businessperson Employee valuable tickets: Of the 76% of
Reward 12%
tickets going to business
invites a guest to a game, that guest development, almost all are
represents $161,544 in revenue for New Clients
distributed within the company a
month or longer before the event
the company. An average luxury 5%
Charitable
suite at just one game costs a Donation 2% More than 90% of tickets used for
company $3,080 and hosts $2.58 Employee Rewards are given out at
Business Development Charitable Donation New Clients the last minute
million in potential revenue. Employee Reward
Marketing
Personal Use
Other
Sponsorship
The following graphical
information comes courtesy of
Spotlight Ticket Management’s
corporate customer study which
pulled data from over 4,000
companies and 5 million tickets.
This sample is the broadest scope of
AND THE MOST
corporate ticket data available from
2012 and includes a range of small
POPULAR LEAGUE IS…
35% Ticket numbers only go so far.
companies with hundreds of tickets
to enterprise giants with tens of 30%
We don’t just track the ticket
millions 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, you
Spotlight has maintained the may have one person asking for
15% 30% 30% one ticket while the big game
integrity of data by adjusting for has fifty staffers fighting over the
outliers and understanding the 10%
17% same ticket.
economic differences between each 12%
5% The NFL is far and away the most popular
major 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 businesses
60 | S E A T | www.alsd.com | #SEATWinter2013
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. Announcing a New Corporate Ticketing Conference
CTIC: Corporate Ticket Impact Conference
CTIC
2013
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.com
62 | S E A T | www.alsd.com | #SEATWinter2013