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Final Four corporate hospitality spending on the rise

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In a year in which the corporate hospitality industry is still struggling to rebound, NCAA officials and their partners expect a big bounce from the business-to-business atmosphere surrounding the men’s Final Four coming to Indianapolis April 3-5.

Overall, spending on corporate hospitality at major sporting events is expected to increase only by about 3 percent in 2010, according to sports economists. But action at the upcoming Final Four should be much stronger.

California-based RazorGator, which signed a deal in 2007 to handle corporate hospitality packages for the Final Four in conjunction with the NCAA, is reporting a 60-percent increase in demand for corporate tickets at this year’s event compared to last year's tournament in Detroit.

RazorGator’s average corporate-order value, including tickets, hotel accommodations and travel packages, is up 121 percent over 2009, company officials said. The average number of tickets requested per order is up 25 percent.

“Right now, the Final Four is trending a bit better for us than the Super Bowl or the Masters, and those are traditionally two of our strongest events,” said Sam Soni, RazorGator vice president for procurement. “People are definitely ordering in higher quantities.”

There are several reasons why the Final Four is doing so well, Soni said.

“We’ve always done well, above average, in Indianapolis,” Soni said. “It’s centrally located and it’s a basketball hotbed. The atmosphere is one of the best in sports, and the city is easy to get to. People who have gone to Indianapolis for the Final Four simply love to go back.”

Soni said the bottom dropped out of corporate hospitality business in 2008 with a double-digit decrease in sales. Last year was static to slightly down. Soni is confident that this year’s Final Four sales will at least equal 2007, when the business-to-business climate was still strong.

The Masters is getting a slight boost from the announcement that Tiger Woods will return to the tournament, but Soni still expects the Final Four to be a hotter spot for corporate entertaining.

“The Final Four has become an ideal event for corporate entertaining,” Soni said. “The NCAA has done a great job of setting this event up, with multiple days and multiple events. The Final Four has become a proven corporate entertaining tool.”

Larry DeGaris, director of academic sports marketing programs at the University of Indianapolis, thinks there’s another reason why corporate hospitality is running so strong at this year’s Final Four.

“The NCAA has been more aggressive and more successful than most sports properties recently at bringing on new sponsors,” DeGaris said. “Whenever you bring on new sponsors, those are some of the most eager and active in the corporate hospitality realm.”

New NCAA sponsors like UPS, Kraft, and Capitol One, DeGaris said, will be eager to network with other new and existing NCAA sponsors such as Coke, AT&T, LG, Lowe’s, Hershey’s and The Hartford.

“Corporate hospitality is one of the best ways to put corporate executives together,” DeGaris said. “The value of these types of networking opportunities—to have the synergies of having all these businesses in one place at one time—is invaluable.”

Even though UPS just signed its deal to be the exclusive logistics provider for the NCAA earlier this month, company officials have planned a major presence in Indianapolis for the Final Four, with dozens of company executives and employees planning to attend.

“Corporate hospitality is a major component to our overall sponsorship strategy,” said UPS spokesman Mark Dickens. “College sports provides such a tremendous atmosphere that people are just so passionate about. We feel this Final Four and other NCAA events are a great way to deepen our relationship with existing customers and cultivate new customers in a very fun, relaxed environment.”

UPS will devote about half of its corporate hospitality package to entertaining its own employees.

“It’s a great way to recognize and reward the employees who are really helping our business,” Dickens said.

The healthy corporate environment is also good news for city leaders here, said a Richard Sheehan, University of Notre Dame economist and author of “Keeping Score: The Economics of Big-Time Sports.”

“The more corporate executives that have exposure to Indianapolis, the better for the city,” Sheehan said. “That gives Indianapolis city leaders the opportunity to meet and greet corporate decision makers face-to-face and allows company executives the opportunity to see up close what this city might have to offer them. It clearly gives the city a chance to sell itself in a unique way.”

UPS is a perfect example, DeGaris said.

“UPS is now the official logistics provider of the NCAA; they’ll be here in Indianapolis, and we have vacant space at the airport,” DeGaris said. “It could be the perfect time to talk to UPS about moving some of their business up here from their Louisville hub.”

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