[an error occurred while processing this directive]
Stars president Jeff Cogen understands the common dilemma confronting his team's best corporate customers. They want to keep their company's season tickets yet face an economic tsunami that's brought increased public and government scrutiny, potential layoffs and uncertainty about the future. Cogen relies on the promotional instincts that led him to give away a car at each game while trying to revitalize Detroit Red Wings attendance in the 1980s. He might offer the company a deal on seats if it will move its location slightly. Or he'll add money for food and drink. Or even toss in tickets for an employee outing. Now more than ever, it's about offering value. Cogen and the Stars aren't alone. In ways big and small, the recession has underscored the importance of corporate America to Dallas' professional sports. The Cowboys, Rangers, Mavericks and Stars have scrambled to retain and reward their best customers – businesses that purchase suites and high-dollar tickets and, in good times, renew at season's end. One sign of the times is actually the lack of a sign. No corporate logo will grace the new $1.1 billion Cowboys stadium when it opens this summer despite predictions that a naming rights deal would exceed $20 million a year. While Dallas has weathered the economic downturn better than other cities, its four major pro teams have been forced to be inventive. While the average fan remains important, so do businesses, said Andrew Silverman, the Rangers' executive vice president for sales. "We can't survive without the corporate client," Silverman said. "Any sports team – the Mavericks, the Cowboys, the Rangers, the Stars, all of us – we need that corporate dollar. Obviously, it's hugely important." Even with their megastadium nearing its grand opening, the Cowboys haven't been immune from the big economic picture. A much-anticipated naming rights deal for their new home failed to materialize. Instead, the team opted for the straightforward Cowboys Stadium name. "We are so sensitive, as everybody is, to the economic times that we're in," owner Jerry Jones said. "And that [stadium sponsorship] will happen at a time when it's probably more appropriate and less sensitive than it is right now." The Cowboys' concerns went beyond just one high-profile deal. The team saw corporate retrenchment as the economy went south, executive vice president Stephen Jones said. One thing that helped the Cowboys, he said, was that their efforts were in full swing before the worst of the banking crisis hit. While the Cowboys have been tight-lipped about some aspects of the stadium, the last numbers provided by the team in February indicated that more than 270 of 300 suites priced between $100,000 and $500,000 had been sold. In addition, 85 percent of the 61,000 available seats had been purchased. That figure includes 46,000 non-club seats with an average price of roughly $90. Stephen Jones said he's confident the Cowboys will sell out the stadium, citing a strong response for early concert events like George Strait, U2 and the Jonas Brothers. Unlike other franchises, the Cowboys have avoided price reductions. "It's more than just a one-year decision or a two-year decision," Stephen Jones said. "You're passing on something or buying something for the next 20 years, not for the next year or two." The Rangers might have been the first Dallas-area pro team to feel the gusty economic headwind. During the off-season, the team's season-ticket renewals dropped by 10 percent, much of that from the corporate market. In response, the Rangers offered reduced ticket prices, aimed at both the corporate clients and the average fan. Silverman said the team targeted a "value equation" of ticket price, food and beverage and parking. While the Rangers had some shockingly small weekday crowds early – drawing 12,627 on April 28 against Oakland – $10 tickets, fireworks and other promotions produced bigger weekend turnouts. Then the Rangers' performance became the story. The team rode a hot streak to first place in the American League West. "What happened last weekend and what happened last month for us is the best thing that could ever happen to us for the corporate dollar because there's a buzz," Silverman said. "Yes, there's a buzz out there for the Rangers." Now clients are likely to call companies for Rangers tickets. Firms that canceled might be prompted to get back in the game, Silverman said. The Rangers are averaging 1,400 more fans through their first 20 games over last season, a 6.1 percent increase. Mark Cuban has proved he knows how to buy low. He says his Mavericks customers, corporate and otherwise, have the same opportunity. "This is the year of the fan coming up where they get to send a message what's important, what the price points they'll respect and support are," Cuban said. "And teams have to respond whether it's high school, college or professional." The Mavericks have consistently dropped upper-level ticket prices the last four seasons and offered promotions like $2 tickets. The team has already announced for the 2009-10 season that it will be lowering the prices for 50 percent of its tickets while leaving the remaining half unchanged. Cuban also points to about 4,500 tickets priced at $19 or lower. The Mavericks have seen a decline in corporate business, although they declined to disclose season-ticket renewal figures in keeping with team policy. Advertising has been hit harder than ticket sales, Cuban said, especially with publicly traded companies. The good news, from his perspective, is that the metropolitan area has plenty of private entrepreneurial firms. "They realize it provides cheap incentives for their employees," Cuban said. "It's easier to give somebody good Mavs tickets and say, 'Take your family,' than to give you a raise." Cuban, the businessman, said his non-sports companies have been making more deals with the Mavericks, not fewer. "It's a better bargain; it's a better deal," Cuban said. "You get more bang for your buck. Now is the time to lock in." Stars season-ticket renewals are down about 4 percent from the same point last year facing a mid-June deadline, Cogen said. Most of the decline can be traced to corporate clients' slower activity, he said. But he doesn't put it all on the economy. The Stars' failure to make the playoffs a year after reaching the Western Conference finals also played a role. "It's difficult to say the economic issues throughout last season had X, Y and Z impact," Cogen said. Before last season, the franchise lowered the prices on about 5,000 upper-bowl seats at the American Airlines Center. For 2009-10, they decreased the price on select lower-bowl end zone seats. In addition, Cogen has offered a $250-per-seat food and beverage credit for renewals. "We're seeing some migration by corporate America to the prices we've created," Cogen said. "We've also seen some downsizing with six [tickets] going to four and four to two from corporate America." David Carter, executive director of the Sports Business Institute at Southern California, sees the corporate pullback as a harsh, temporary reaction. In his mind, corporate sports marketing has worked well for the last 25 years. "But for these current circumstances, whether they are real, perceived or thrust upon them by other folks, they would still be here," Carter said. Stephen Jones has no doubt that business and businesses will return. "This is America, and things go down but they do come back," he said. "Things will not be this way forever, hopefully not for more than the next couple of years." Staff writer Todd Archer contributed to this report. Pro sports executives on the effect of the recession: "The high-priced tickets are just right now tough to sell when you're depending on corporations, particularly in a city like New York that has been decimated by Wall Street." –Mark Cuban, Mavericks owner "I will tell you that American Airlines Center was built for a robust corporate marketplace.I was reading the newspaper over the [past] weekend and we're still a pretty robust corporate marketplace." –Jeff Cogen, Stars president "Obviously, if you called certain economically challenged industries right now, they probably can't buy season sets, but there's a lot who can. And there's a lot who will. If the team continues to play well, our season-ticket base could double." –Andrew Silverman, Rangers executive VP for sales "I think that there are going to be adjustments. We've seen that in our teams. And they'll do fine. But they'll do less. They'll either maintain prices or cut them. And as we come through the economy, I think there will be some repricing mechanism built in. The good ones will continue to be good." –David Stern, NBA commissioner "We're in an economy that is down to its lowest levels since the Depression. We're not any different than anyone else in the world. We're continuing to make a big adjustment." –Bud Selig, baseball commissioner SOURCES: DMN, The Wall Street Journal, MLB.com • Attendance is down for 19 of 30 teams in Major League Baseball. At about 28,700 per game, overall attendance is down slightly more than 5 percent. • The NBA announced plans to lay off 80 employees at its league office, about 9 percent of the workforce. • The Boston Red Sox kept season-ticket prices at the same level, after 14 straight years of increases. • The New York Giants and Jets are still seeking a naming-rights deal for the new stadium they will share. • The opening weeks of the new Yankee Stadium were marked by empty seats in the prime Legends Suites, which feature prices up to $2,600. Discounted tickets are reportedly plentiful online. • The NFL cut 15 percent of its employees, and commissioner Roger Goodell voluntarily took a 20 to 25 percent cut from the $11 million he received in salary and bonuses. • The NHL's Phoenix Coyotes filed for bankruptcy this month. SOURCES: The Washington Post, Financial Week, The Associated Press, ESPN, The Wall Street Journal, New York Daily News Dallas-Fort Worth pro sports teams riding out recession storm
Franchises look for splashy incentives to keep corporate clients onboard
10:47 AM CDT on Sunday, May 24, 2009