Perceived Motivations for Corporate Suite Ownership in the 'Big Four' Leagues by ProQuest


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									                        Sport Marketing Quarterly, 2010, 19, 88-96, © 2010 West Virginia University

Customer Motivation
                      Perceived Motivations for Corporate
                      Suite Ownership in the ‘Big Four’
                      Peter Titlebaum and Heather Lawrence

                      Peter Titlebaum, EdD, is an associate professor of sport management at the University of Dayton. His research interests
                      include luxury suites sales and sponsorship activation.
                      Heather Lawrence, PhD, is an assistant professor of sport management at Ohio University. Her research interests include
                      intercollegiate athletics, luxury suite sales, and gender equity.

                          Selling luxury suite inventory is a priority for professional sport organizations, yet little is known about the
                          motivations of those who purchase suites. There are 12,400 luxury suites in the NFL, MLB, NBA, and NHL
                          (Association of Luxury Suite Directors, 2009) accounting for over $600 million in gross revenues (Lee &
                          Chun, 2002). In the current recession, selling suites is a challenge as many corporate suite clients are leery of
                          the public perception of owning a suite and are being held more accountable for spending than ever before.
                          This study sought to gain a better understanding of how luxury suite sales professionals perceive their corpo-
                          rate client motivations for purchasing and renewal as well as to explore similarities and differences between
                          the “big four” leagues. Results indicated that there are few differences between leagues and that relationships
                          between the team and the suite client are critical to selling suites and retaining corporate clients.

                      Perceived Motivations for Corporate Suite                           indicated that their sponsorship budget is driven as a
                      Ownership in the ‘Big Four’ Leagues                                 percentage of revenues and because of this, a 5%
                                                                                          decrease in sport sponsorship spending was budgeted
                      From a business perspective, premium seating revenue
                                                                                          for 2009 (as compared to 2008) (Seaver Marketing
                      is a critical revenue stream (on par with media rights,
                                                                                          Group, 2008). Additionally, some companies are hesi-
                      sponsorship, and general ticket sales) that sport organ-
                                                                                          tant to be perceived as spending thousands of dollars
                      izations rely on to cover their operating costs. The
                                                                                          on client entertainment while also laying off employees
                      annual sport marketplace in the United States is esti-
                                                                                          or accepting federal bailout money. Thus, spending on
                      mated to range between $425 and $450 billion
                                                                                          sport hospitality is down 25% (Schoettle, 2009). The
                      (Plunkett, 2009) with the professional sport luxury
                                                                                          exact impact on the sport industry from the recession
                      suite industry segment accounting for over $600 mil-
                                                                                          is yet to be fully understood. Unlike past times of eco-
                      lion in gross revenues (Lee & Chun, 2002).
                                                                                          nomic crisis where sport was insulated from impact,
                      Badenhausen (2008) reported that 20% of NFL and
                                                                                          there are likely to be lingering effects of this recession
                      35% of NHL team revenues come from sponsorship
                                                                                          for years (e.g., McCarthy, 2008; Seaver Marketing
                      and premium seating. Lawrence, Contorno, Kutz,
                                                                                          Group, 2008; Van Riper, 2008a; Walker, 2009). Sutton
                      Hendrickson, and Dorsey (2007) found that teams
                                                                                          (2009) summed up the status of the suite industry well
                      realized an average of $9.8 million on luxury suites
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