Aug. 16 (Bloomberg) -- Marty Staff says he expects his company’s luxury suite at the new home field of New York’s National Football League teams, with its wet bar and high-definition flat-screens, to be a moneymaker.
It’s all about selling suits, a sign that sports connections are back in fashion for U.S. businesses after a cool relationship during the recession.
Staff, the chief executive of JA Apparel Corp., which makes clothing under the Joseph Abboud label, said he became the New York Giants’ apparel partner in the midst of the worst recession since the Great Depression because he thought it was the best way to move clothing. The Giants play the co-tenant New York Jets tonight in the first football game at the $1.6 billion New Meadowlands Stadium in East Rutherford, New Jersey.
“This is a seven-figure deal for us, and if we spent it on magazine ads instead of this, we believe we wouldn’t get the same bang for our buck,” Staff said. “We’re going to make money on this deal with the Giants.”
Such corporate spending -- the suites go for $150,000 to $500,000 apiece -- represents a change from the height of the recession, when Citigroup Inc.’s 20-year, $400 million sponsorship of the New York Mets’ new baseball stadium had critics calling it “Taxpayer Field” after the company received $45 billion in government funds. In 2008, soccer clubs in Europe’s six biggest leagues sustained their first decline in revenue from jersey sponsorships since 1999 because of the economic slowdown.
John Wallace, general manager of TicketOS, a Los Angeles-based corporate ticketing company, said in an e-mail that while corporate season ticket holdings are down 7 percent, corporate ticket-per-event sales are up 275 percent this year, and use of owned corporate tickets is up 11 percent.
“Some corporations have adopted the philosophy they would rather entertain less frequently, but entertain with a higher degree of quality,” he said. “The concept of spend management and maximizing their return on assets is top of mind.”
Staff, 59, isn’t the only business chief finding opportunities to market with sports in the new stadium.
Scott May’s company, National Communications Group, leased a suite for some Jets games in the old stadium and will follow the team to its new home next door.
About two decades ago, May cold-called the Jets as a potential client, weeks into his first job at a Midwestern printer. Today, May is president of the Park Avenue-based production company that is the Jets’ printing and graphics partner.
For May, entertaining clients in a suite showcases his products, such as the green Jets wall-wrap that stretched around the field in the old stadium. It will also allow him to reward his best employees and boost morale, he said.
“I thought about it and realized it was an opportunity to further increase my business,” he said. “I could use it as an asset to entertain, and to get new business. We’re about an $8 million to $10 million-a-year business, not tiny but not huge. As the stadium was developed and built, I realized what we were looking at: the showpiece of showpieces in sports.”
Because the Jets are the designated home team tonight, May will be able to use his suite and Staff won’t.
Neither team will say how many suites they have sold. Mike Stevens, the Giants’ chief marketing officer, said he is “very pleased where we are with sales.”
Matt Higgins, the Jets’ executive vice president for business operations, said sales have picked up in the past few months.
“For awhile I think it was a little bit frozen and people were a little bit skittish about hospitality,” Higgins said in a telephone interview.
The Giants and Jets are still seeking a naming-rights partner for the stadium. The Dallas Cowboys also are selling naming rights for their $1.2 billion stadium in Arlington, Texas.
Robert Tuchman, executive vice president of Premiere Global Sports, a company that specializes in working with corporations to provide sports-event packages, said that if a company is going to invest in a suite, they should act soon.
“If you are going to buy suites in this market, now is the time to do it, for sure,” he said in a telephone interview. “Now is when you’re going to be able to negotiate the best deal because these teams have inventory. If you can lock yourself in, I totally would advise a long-term deal.”
According to Tuchman, hosting clients in a suite at big-time sporting events can lead to business agreements. He said he’s had clients close multimillion-dollar deals at New York Yankees games.
Staff said his clothing company became involved with sports marketing in 2004, because competitors were dressing Hollywood celebrities for the Academy Awards. Sports stars provide a more direct link to the men who buy Abboud suits, he said. The company’s factory in Massachusetts can make trousers a football linemen with a 60-inch waist can wear.
He had initial concerns about his investment -- “We thought it would send the wrong signal in a down-trending economy,” he said -- even though Abboud began dressing NFL and National Basketball Association coaches in the summer of 2007. Those were assuaged by a deal in which his company got a suite, its logo and graphics throughout the stadium and access to the Giants’ mailing list.
“Finally, and perhaps most importantly, we get access to the other corporations that have luxury boxes, so we can mine for new customers and then sell them our clothes,” Staff said.
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