There’s a simple reason why the Indianapolis Colts want two new suites inside Lucas Oil Stadium, the cost of which will be borne by the city.
“The demand is there for us to sell them,” said Colts Chief Operating Officer Pete Ward.
Demand for the pricey luxury suites isn’t league-wide. Many of the NFL’s 32 teams are struggling to sell their suites as the economy continues to wobble and myriad factors constrain corporate spending.
“The demand for suites is very market-specific,” said Marc Ganis, a Chicago-based sports business consultant who counts several NFL teams as clients.
The Colts and the city’s Capital Improvement Board last week jointly agreed to build out two of the six remaining vacant suite spaces at the stadium. The city, which owns Lucas Oil Stadium, will pay $2 million, which is expected to be most or all of the cost of building out the two suites and two small suite-level kitchen spaces. The Colts will cover any overage.
The two new suites bring the total at the stadium to 143, and that’s significant inventory to move in a city the size of Indianapolis, Ganis said.
“The interest in the team within a community—and how closely the team and community are aligned—is what drives suite sales,” Ganis said. “In Indianapolis, the Colts are a story, and their games are an event.”
The team, Ganis said, has weaved itself seamlessly into Indianapolis’ culture. That effort got a big boost with Peyton Manning and continues with Manning’s replacement at quarterback, Andrew Luck.
While Ganis said the Colts have been fortunate to have players like Manning and Luck, they’ve also “taken advantage of their circumstances.”
“They manage their team and their people in a way that has embedded that team in the community,” Ganis said. “They’ve managed their team, their public relations and their customer relations in a way that the best teams have.”
The suite deal is part of a larger agreement that settled a dispute over concession operating expenses and called for the team to pay the cost of installing two ribbon boards. There are no current plans to build out the four remaining suite spaces.
Even though the Colts plays in a relatively small market with fewer corporate headquarters than many of its NFL counterparts, Ward said the demand for suites has remained strong.
“We’ve never really seen the demand for suites drop,” Ward said.
That includes during the depths of the post-2007 Great Recession and in the wake of the team’s 2011-12 season, which ended in a 2-14 record and the departure of all-pro quarterback Peyton Manning.
Colts officials have a waiting list for suits and don’t think they will have trouble selling the two new ones. One will seat 21 and the other 20. Both will be complete in November.
Pricing for the two new luxury boxes in the upper suite level at the south end of the field hasn’t been set yet. Current Lucas Oil Stadium suites are leased for between $40,000 and $250,000 annually, Ward said. The two new suites are mid-range in terms of capacity, and the price likely will follow suit.
Suites aren’t the only thing in demand at Colts games. The rate of season-ticket renewal this off-season is 95 percent, as is the renewal rate for pricey club seats, Ward said. Many of the stadium's most expensive seats—the 7,100 midfield club seats—were up for renewal after last season. Only about 200 of those remain for sale, and Ward expects those to be sold long before next season kicks off.
Suites and club seats are an important contributor to revenue, bringing in near $40 million annually for the team, sports business experts said.
There’s also an increased demand for ribbon board advertising, which is part of the reason for the addition of the two new boards—in the northeast and southwest corners of the stadium—this off-season, Ward said.
The ribbon boards have also become a big attraction for fans in the stands.
“This goes back to trying to give fans in the stadium everything they can get at home on TV,” Ward said. “These boards allow us to put up continual fantasy [football] stats and team scores and statistics from around the league as well as sponsor messages.”
Attention from fans within a stadium is what makes them popular with a growing number of sponsors, Ganis said.
“Anytime you can draw fans’ eyes to something, sponsors are going to want to be there," he said.
It’s also a relatively inexpensive way for sponsors to become involved with the team, Ganis added.
“Most of these [ribbon-board] deals are low- to mid-six-figure packages,” Ganis said. “But a sponsor can get his name, logo and message on a ribbon board for as low as five-figures.”