MainGate scores huge Super Bowl merchandising deal

Indianapolis-based MainGate Inc. this month was one of two companies awarded contracts by the NFL to sell merchandise during 2014 Super Bowl festivities in New York and New Jersey.

MainGate beat out 14 other bidders to win a contract to sell merchandise at 40 NFL-sanctioned hotels during the 10-day festivities leading up to and including Super Bowl Sunday. MainGate also will sell merchandise during media day—which is now open to the public—at the Prudential Center in Newark, N.J.

Buffalo-based Delaware North won the contract to sell merchandise at MetLife Stadium in East Rutherford, N.J., where 2014 Super Bowl will be played.

MainGate is the only firm selected by the NFL to sell merchandise in each of the last three Super Bowls, and the size of the deals has increased each time, said company CEO Dave Moroknek.

Before MainGate nudged its foot in the door at the 2012 Super Bowl in Indianapolis, California-based Facilities Management Inc. had an exclusive Super Bowl merchandise deal with the NFL for the previous 23 seasons. FMI was shut out of the 2014 Super Bowl.

“The new technology, the new merchandising techniques and the new sales and data reporting” demonstrated by MainGate during the last two Super Bowls left a positive impression on NFL officials, said Leo Kane, the league’s vice president of consumer products. Kane added that MainGate’s “customer service philosophy aligned perfectly with the NFL’s.”

MainGate’s performance at this year’s Super Bowl in New Orleans, where it helped the NFL beat sales forecasts despite a power outage at the stadium, helped the local firm secure the deal for the 2014 Super Bowl, said sources close to the league. When the power went down at the Mercedes-Benz Superdome, MainGate employees sprung into action with battery-powered hand-held scanners and credit card processing machines.

Moroknek declined to say how big a payday the 2014 Super Bowl contract will bring.

“It’s a very significant deal for us,” Moroknek said. “It should be the single biggest event we’ve ever done.”

Chicago-based sports business consultant Marc Ganis said he expects more merchandise will be sold at this season’s Super Bowl than at any previous Super Bowl “by a wide, wide margin.” He and other experts say that's because the game is being held in a huge metro area, and many fans will want to visit the New York City area to participate in related events.

MainGate will be paid on a percentage of sales the company makes. Those familiar with the deal think MainGate's percentage of sales likely will reach into the seven figures.

Moroknek estimates MainGate will sell four to five times more merchandise than it did in 2012 in Indianapolis and 1.5 to two times as much merchandise as it did during the Super Bowl in New Orleans.

In Indianapolis, MainGate won a contract to sell merchandise at 12 hotels. In New Orleans the local firm sold merchandise at the Mercedes-Benz Superdome and four hotels.

MainGate’s deal for the 2014 Super Bowl could have been even bigger, said sources close to the NFL. Delaware North, primarily a food vendor, was awarded the contract to sell merchandise on game day at MetLife Stadium, sources said, because of its existing union relationships at the venue. Delaware North sells food and merchandise during all N.Y. Jets and N.Y. Giants games at the stadium.

A stipulation in the stadium contract requires all vendors at the stadium be union employees. Several merchandisers told IBJ that made it difficult to compete with Delaware North, which had existing relationships with strong New York-area unions.

Indianapolis-based Lids Sports Group, which had a deal to sell merchandise at last season’s Super Bowl, did not win part of this season’s contract.

In New Orleans, Lids, which was formed as Hat World in 1995, ran the 30,000-square-foot store at the NFL Experience at the Ernest N. Morial Convention Center. Lids also handled merchandising at kiosks at 10 to 12 New Orleans hotels. This year, the NFL has decided not to have an NFL Experience.

While Lids didn’t have a piece of the official merchandise contract in Indianapolis, it made a splash by opening up a 23,000-square-foot store in the vacant Nordstrom’s space at Circle Centre Mall. Since Lids has a considerable retail presence in the New York area, it could make a similar splash there during the 2014 Super Bowl.

The stadium part of the Super Bowl deal is often the biggest piece of merchandising business, but those familiar with the deal for the 2014 Super Bowl think that due to the size and location of hotels selected by MainGate and NFL officials, merchandise sales at the hotels will be as big as at the stadium.

MainGate will sell merchandise at 25 hotels in New York and 15 in New Jersey. They range in size from 750 rooms to 1,800 rooms.

“We wanted to choose locations that were in tourist areas where we knew a large number of people attending the Super Bowl would stay,” Moroknek said. “We chose locations such as Times Square and Midtown in New York and some around the stadium, at the Newark airport, a couple in Hoboken, and the AFC and NFC team hotels. …  We wanted them to be in high-traffic areas with motivated buyers.

“We’re really expanding the hotel operations because we think the potential at this Super Bowl is enormous,” he added.

In 2012, MainGate, which has 275 full-time employees, had more than $60 million in revenue. Its accounts included Harley-Davidson, NASCAR driver Danica Patrick, the Indiana Pacers, Houston Rockets, the newly named Brooklyn Nets, Indianapolis Colts, Washington Redskins, Minnesota Vikings, Detroit Lions, St. Louis Rams and the National Hot Rod Association, to name a few.

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