Companies ready to spend big again at Super Bowl
Friday, February 4, 2011
This Super Bowl is shaping up to be a blowout — for corporate America.
Spending on hotel rooms, dining and entertainment during Super Bowl week is expected to top $200 million, beating the record from 2007 — before the recession made it taboo to throw lavish parties and treat clients to skyboxes. Much of the tab will be put on corporate cards.
Companies have started throwing money around again now that their finances are improving, fears of a double-dip have subsided, and memories of bailouts and mass layoffs are fading. Last quarter, large businesses spent 10 percent more on entertainment — think rounds of golf, New York Yankees games and the opera — than a year earlier, according to American Express. They also spent more for airfare, food, drinks and hotels.
The return of the expense account is welcome news for the Dallas-Fort Worth area. Taxpayers in nearby Arlington, Texas, helped subsidize the construction of the $1.2 billion Cowboys Stadium, which was completed in 2009.
“After a big drop-off the past couple of years, companies appear less hesitant to invite their customers to Dallas,” says PricewaterhouseCoopers sports and tourism analyst Robert Canton. “You see that in the luxury suites, which completely sold out.”
One 15-person partial suite went for $73,000, according to StubHub spokeswoman Joellen Ferrer. Individual tickets to Sunday’s game between Green Bay and Pittsburgh are fetching an average of $3,600 on the secondary market, compared with $2,500 for the last three Super Bowls.
A surprising 13 percent of ticket buyers have been located in California and New York; that signals a healthy amount of corporate purchasing, Ferrer said.
It doesn’t hurt that the Dallas-Fort Worth area is home to two dozen Fortune 500 companies, which are using the game as an opportunity to give key clients a taste of Texas hospitality. Twelve local companies and individuals donated $1 million apiece to the Super Bowl host committee for this year’s event, including Burlington Northern Santa Fe Railway, PepsiCo.’s Frito-Lay division, T. Boone Pickens and engineering firm Fluor. In return, they’ll get stadium suites and 50 tickets to dole out to friends and clients, among other perks.
This level of support seemed highly unlikely when Dallas started raising money to host the championship game in 2007.
For a while, “there was a public perception that supporting the Super Bowl might have been a frivolous or not responsible action as people were losing jobs,” said host committee president Bill Lively.
This reluctance to be associated with Playboy parties and pricey steak dinners curtailed corporate spending at the NFL’s main event the past two years. After topping $190 million in both 2007 and 2008, total visitor spending during Super Bowl week in each of the past two years totaled $150 million, according to PricewaterhouseCoopers.
Longtime sponsors like GM and FedEx pulled their big-game advertisements in 2009, despite a price cut by NBC. That same year, Warrick Dunn, one of the most famous players in Tampa Bay Buccaneers history, canceled his Super Bowl week charity golf event when he couldn’t rustle up enough corporate sponsorship.
“Companies were dialing back the lavish entertainment because they were under scrutiny, especially if you took bailout money,” said Bill Webster, vice president of brand strategy for Sun Life, which owns the naming rights to the Miami Dolphins’ stadium — site of last year’s Super Bowl.
Bolstered by the energy sector, the business climate in Texas, like the national economy, has perked up in the past year. By the end of last month, 105 North Texas companies had signed on as financial sponsors of the Super Bowl. Other brands, including Audi and Express, are throwing parties in Dallas and Fort Worth this week. Anheuser-Busch has taken over the Aloft hotel in Dallas, renaming it the Bud Light Hotel, where they’ll host four events, including concerts by Ke$ha, Nelly and Dierks Bentley.
Companies “want to be players in this game,” Lively said.
Despite unseasonably cold weather and a Midwest blizzard that kept some fans from flying in earlier this week, local businesses are benefiting from the return to profligacy. Dallas limo service Heaven on Wheels brought in extra cars and the fleet still sold out three weeks before the event. Demand from corporate executives, celebrities and professional athletes has been “a lot more than we thought,” said chief operating officer Joshua Roman. “For a while, people didn’t want to be picked up in a flashy limo or Hummer.”
“Corporations are spending like there’s no tomorrow,” said Asim Sheikh, who manages special events for Zouk nightclub in Dallas. He declined to identify the companies. “They’re booking tables for $12,000 to $15,000 so they can sit next to Deion Sanders.”
At Pappas Bros. Steakhouse in Dallas, where a 45-ounce steak commemorating the 45th Super Bowl is priced at $130, just under half of business is coming from corporate clients, says spokeswoman Amy Robinson. The restaurant has had several takers of its $1,700 shot of cognac, she said.
The upscale Hotel ZaZa in Dallas, where rooms ranged from $695 to $10,500 a night, has been fielding room requests all week, although it’s been booked for months, said Benji Homsey, president of the hotel’s management company. To accommodate one corporate executive desperate for a room, the hotel owner gave up his luxury condominium attached to the hotel. After the game, the owner plans to sleep in a safari tent erected on the roof — even with the chilly weather.