Colts' suite holders devise ways to maximize boxes' value

January 7, 2008

FedEx District Sales Manager Doug Knowles hustled through the halls of the Indianapolis office last spring like he was responsible for delivering the parcel service company's next-day freight himself.

Knowles couldn't get a group of Lafayette customers and prospective clients--among others--off his mind.

Just hours earlier, the National Football League had released its 2007 schedule. Knowles knew he could get an audience with those clients because now he had the perfect bait: tickets to FedEx's RCA Dome suite to watch the defending Super Bowl Champion Indianapolis Colts.

"The very moment the NFL schedule is announced, we put together an allocation schedule," Knowles said.

Knowles huddled with FedEx's top local sales and marketing executives to diagram a season-long strategy that would assure the suite would gain a return on its six-figure annual rent.

In a meeting that had more X's and O's than Coach Tony Dungy's game-day war room, Knowles and his lieutenants decided which clients and prospective clients would be invited to which game, which FedEx employees would accompany them, and what ancillary activities would be planned.

Those early-season decisions, RCA Dome suite holders said, are now paying dividends, and with at least one home playoff game on the horizon, there's still opportunity to make those pricey luxury boxes pay off.

And the better the Colts do in this year's playoffs, the more valuable next year's suite tickets will become. Of course, the allure of the new $700 million Lucas Oil Stadium won't hurt.

"All the decisions made these days concerning these suites are determined very systematically and strategically," said Milt Thompson, president of Grand Slam Cos., a locally based sports marketing consultancy. "These suites are no longer seen as merely a leisure luxury, but as an asset that can yield significant returns if used properly."

The Sept. 6 season opener, a Thursday night prime-time game against New Orleans, presented FedEx's Knowles the perfect opportunity to draw Lafayette-area clients and prospects. Naturally, they would be eager to see a Saints team led by Purdue University graduate Drew Brees.

With the team coming off a Super Bowl championship season, Knowles knew he'd have no problem filling FedEx's double suite--which accommodates 60 people--for any of the Colts' eight regular-season games and any playoff games this year.

"When you can offer suite tickets to watch the defending Super Bowl champs, that gives you unprecedented opportunities to meet with a wide range of business contacts," Knowles said. "For the Patriots game, we had people calling us."

The Nov. 4 game against New England turned out to be a prime opportunity for OneAmerica to draw in East Coast associates.

"We brought in a group of distributors, brokers, agents and end users from Massachusetts," said Brian Lauber, OneAmerica chief marketing officer. "Now that the team is winning, we draw up our game plan for the suite very early. By the time the season kicks off, the suite is usually booked for the entire year.

"We have it down to a science. You're not just going to a game; we make it an experience."

Suite holders this year reported increased incidents of drawing business associates and prospective clients from around the state and across the country using RCA Dome suite tickets as a lure.

Suites are also used to entertain top-flight prospective employees, Lauber said.

Colts coffer-stuffer

The dome suites, which cost $40,000 to $230,000 annually, are no small line item. But the demand for them is up--way up.

While the 100 RCA Dome suites have been sold out for several years, there has never been a waiting list. But apparently there was plenty of pent-up demand. The Colts recently sold all 140 suites in Lucas Oil Stadium, which is set to open at the beginning of the 2008 season, and the waiting list is at 60 and growing.

The growing demand, said Greg Hylton, Colts director of marketing and ticket sales, comes despite a slight price increase at the new stadium, where suite rental ranges from just over $40,000 to around $250,000. There was discussion about increasing the number of suites at Lucas Oil Stadium even more given the current demand, but Hylton said Colts officials decided 140 was the right number in the long run.

The Colts' success is good not only for suite holders' business, but for the Colts as well. Suites from the new stadium should bring in $16 million to $22 million annually, about 10 percent--maybe a little more--of the team's budget.

The atmosphere in suites is vastly different than it was when the Colts moved here in 1984.

Back then, Mike Pagel was lining up behind center and Frank Kush was calling the shots on the sidelines. The losses came in droves. Longtime corporate suite owners said they'd often invite family and friends--or friends of friends. If that didn't work, they'd give away tickets to employees.

"There has certainly been a transformation," Hylton said. "Now, it's mostly business clients and associates in those suites."

There are several reasons for that, sports marketers said.

The team's success is chief among those, along with the NFL's overall popularity. But the increased cost of suites and a desire by suite holders to justify the cost through business networking is also a factor.

"The success of the team has had a tremendous effect on the popularity and interest in the suites," said Michael Becher, managing partner of Deloitte & Touche's Indianapolis office. "That made the decision to buy a suite in the new arena an easy one."

Building relationships

Becher used his firm's 22-person suite this season to draw a group of chief financial officers from across the state.

"It's a rare opportunity to pull all these people together," Becher said. "A very desirable venue helps that happen."

With the Colts set to host a playoff game Jan. 12 or 13, most suite holders have long since strategized to maximize suite use during that game.

"The Colts right now are the best show in town, so there's no problem filling the suite, especially for the playoffs," said Jim Zink Sr., president of Zink Distributing Co., a locally based bottler of Anheuser-Busch products.

"We intend to invite some of our very best clients. It's almost impossible to get a four-hour meeting with people any other way, and it's in a very relaxed atmosphere. That really helps further relationships. And most businesses, at their heart, are relationship businesses."

Once the invitations are issued and accepted, that doesn't mean the work is done.

Many suite holders use nameplates to arrange seat assignments that facilitate networking. Suite holders also are careful to ferret out any party crashers, which are increasingly rare given beefed-up stadium security.

Most suite holders have a person on staff in charge of making sure guests get tickets and get to the Dome. They also arrange for appropriate game day refreshments and decorations--some specific to an invited guest.

"When you're a host, there's a fair amount of work," said Bob Birge, who operates locally based Law Firm Marketing Network. "The perception is, you're just up there partying and playing around," Birge said. "That's not the case. Being a suite host can make for a pretty long day."

When Birge worked for Bingham McHale law firm, he often ordered a special wine or food item preferred by certain clients and would arrange for the appearance of special guests--often a former NFL player or coach or a famous entertainer. Promotional items and other giveaways also are common.

Annual entertainment expenses are often equal to the cost of the suite rental, said Birge.

Tailgating on steroids

Denver-based sports marketer Dean Bonham calls the activity in many NFL suites "tailgating on steroids."

The idea of luxury suites changed what sports meant to Americans, sports marketers said.

"It marked the move to a corporate culture," said David Morton, president of locally based Sunrise Sports Group.

The first suites appeared in the Houston Astrodome in 1965, but it wasn't until the 1984 Summer Olympics in Los Angeles that their full potential for corporate networking was recognized.

Suites across all professional sports bring in well over $1 billion in revenue annually, sports business experts said. With more than 3,200 suites league-wide, and an occupancy rate greater than 90 percent, the NFL leads the pack.

The Colts franchise, with its Lombardi Trophy in hand and spiffy new stadium ready to open, is one of only about a dozen NFL teams with a lengthy waiting list for suites, according to league sources.

The rewards for suite holders are not as quantifiable as they are for the team. But suite holders said the intangible nature of the benefit doesn't diminish its value.

"How do you run having fun with your client through a calculator?" said Deloitte & Touche's Becher. "It's intuitive, but clearly it's a benefit. We don't see the suite as an expense, but an investment."

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