Saturday, November 7, 2009

NCAA Shoves Aside Lucas Oil Stadium Suite Holders For Final Four

The Indianapolis Business Journal reports on a disagreement between Lucas Oil Stadium suite holders and the NCAA:

Lucas Oil Stadium suite holders are upset that the NCAA is taking their suites for the men’s basketball Final Four in April and reselling them on the secondary—or scalpers—market.

Suite holders see the practice as inconsistent with the hard line the NCAA has taken against ticket scalping.“I am disgusted by the hypocritical behavior of the NCAA in saying one thing … then scalping suites out the back door,” said a Lucas Oil Stadium suite holder who spoke on the condition he remain anonymous.

The college sports association has asked for local ordinances at the sites of Final Fours prohibiting ticket scalping and has implored fans and ticket brokers not to seek profit by charging inflated prices for NCAA event tickets on the secondary market.

Several upset suite holders contacted by IBJ declined to speak out publicly because of the Indianapolis-based NCAA’s vast community connections.

Greg Shaheen, the NCAA’s senior vice president of basketball and business strategies, said suite holders at the time they bought their suites were made aware of language in their contract stating the suites are not guaranteed for Final Fours. The same is true for the 2012 Super Bowl.

Shaheen said the last time the Final Four was played here, in 2006, some suite holders in the old RCA Dome had to forfeit their suites. Though the practice of taking suites isn’t entirely new, he said it’s happening on a wider scale this year.

Shaheen said there is an incorrect perception that money from suite sales is lining the NCAA’s pockets.“One hundred percent of suite revenue is going to host-committee expenses,” he said.

“The NCAA is not getting this money.”Susan Williams, president of the Indiana Sports Corp., which is heading up the host committee for next year’s Final Four, confirmed that the NCAA is pledging up to $4 million toward local operating expenses.

“This is money that before we had to go out and raise on our own,” Williams said. “It was time- and resource-intensive, so we’re happy to have this financial assistance.”But whatever the NCAA gives to the local host committee doesn’t represent all the revenue from suite sales. The NCAA’s corporate hospitality partner, California-based RazorGator, keeps some of the proceeds.

The NCAA hired RazorGator in 2007 to market and sell hospitality packages for men’s Final Fours. Financial terms of its deal with the NCAA were not released.

...

In 2006, RazorGator told IBJ it was offering ticket and hospitality packages for $2,000 to $10,000 per person. Those sales, sports business experts said, generate $8 million to $12 million for RazorGator at each Final Four, and the NCAA would presumably get a cut of that as part of its deal with the California firm.

The policy of confiscating suites for the Final Four could be felt by suite holders for years to come. The NCAA signed a deal with city officials in 2004 to put Lucas Oil Stadium—with its massive size and myriad suites—on a five-year Final Four rotation through 2039.

Indianapolis Colts, the original seller of the suites, sent out letters in October telling many of the 137 stadium suite holders they would not have the option of using their suite for the Final Four.

The NCAA is offering those suite holders the choice of getting on a waiting list to purchase a suite for the event or buying tickets as close to their suite as possible.

“I have to get on a waiting list for the possibility of paying an inflated price for a suite—maybe my own suite?” mused the suite holder. “Something’s not right with that.”

NCAA officials refused to give suite holders any guarantee on the location, size or cost of the suite that might become available to those on the waiting list.

Colts officials declined to comment.

...

It’s not clear how much RazorGator is asking for Lucas Oil Stadium suites. An operator in the company’s sales department told a caller inquiring about 2010 Final Four suites that pricing wouldn’t be available until December. RazorGator executives did not return calls seeking comment about the company’s relationship with the NCAA.

During the last two Final Fours, RazorGator charged hundreds—or even thousands—of dollars over face value for tickets. Some tickets listed online were going for 15 times the face value. For 2010, the face value of tickets for sale to the public—all upper level—are $160 and $180.

As part of its packages, RazorGator is offering tickets starting at $455 for upper-level seats and up to $3,864 for lower-level seats. Some hospitality offerings are rolled into that price, but additional hospitality offerings are available for a hefty surcharge.

...

Another suite holder who declined to be identified due to business and community ties to the NCAA and the Colts said he was especially upset at the way “local suite holders had been treated after all this community has done for the non-profit NCAA,” adding that loyal local companies were being shut out of their suites in favor of “preferred partners” of the NCAA.

Suite holders whose suites aren’t available to them for the Final Four are further angered because they have not been given a reason why some companies are getting the option to use their suites and others are not.

The NCAA’s Shaheen wouldn’t disclose the number of suites involved or how it was determined which suite holders were affected.

He said many of the suites taken by the NCAA are used for its corporate and broadcast sponsors and member schools.

He also noted that Lucas Oil Co., which is the facility’s title sponsor, Colts owner Jim Irsay and the city’s Capital Improvement Board will have access to their suites.

....


It's great that the Colts' Irsay and the CIB do not lose their suites during the NCAA finals. We wouldn't want to kick the elites out of their cozy suites at The Luke.

I agree that the NCAA is more than a little hypocritical regarding demanding ordinances against scalping tickets while scalping the Lucas Oil Stadium suites on the open market.

Left out of the article though is the fact those suites are not owned by the Colts. They were built and are owned by taxpayers through the CIB. It is bad enough that the CIB gave away all the revenue from those suites to the Colts. Now we find out that on the few occasions when those Colts' leaseholders don't occupy the suites and they're going to be leased out on the open market for the NCAA final four, we taxpayers still get absolutely nothing from those suites that we own.

Finally, I find it very interesting this little tidbit: "The NCAA’s Shaheen wouldn't disclose the number of suites involved or how it was determined which suite holders were affected." Someone needs to remind Mr. Shaheen that those suites are public property and the NCAA's ability to scalp those suites is outlined in a public contract.. The notion that he or his organization can avoid disclosure regarding how they end up leasing those publicly-owned suites is pure nonsense.

8 comments:

Downtown Indy said...

In a bit of most delightful irony, the folks who were part of the gung-ho 'we need a new stadium' movement are getting their own little taste of vinegar.

But mustn't any money from the selling of these suites go, by contract, directly to Irsay, not to any 'host-committee expenses?'

Paul K. Ogden said...

DI, I'm almost certain there is a loophole in the Colts contract for events such as the Final Four. What I wonder about is on the other end...whether the NCAA contract gives away that income. I'm sure it does. There isn't anything the CIB won't give away.

Downtown Indy said...

My guess is, this rule holds for the superbowl, too?

Hoosier in the Heartland said...

Like Downtown Indy, I'm enjoying a bit of schadenfreude. It's only right that the suite holders (by definition supporters of the CIB and its schemes) should be hoisted on their own petards.

Jon said...

Per the Colt's lease; section 15.3 Displacement of Suite Licenses;SECTION 15.3. Displacement of Suite Licensees.
(a) General. CIB shall have the right to designate Blackout Events during the Term;
provided, however, that (i) CIB shall use reasonable efforts to minimize the number of Blackout
Events and the number of Suites affected by each Blackout Event and (ii) in no event shall there
be more than two Blackout Events in any calendar year; provided, however, that, in the event
that the NCAA Basketball Tournament, the Super Bowl, the Republican National Convention or
the Democratic National Convention constitute a Blackout Event, then such Blackout Event shall
not be count as a Blackout Event for purposes of the limitation set forth in clause (ii) of this
sentence. No season of another professional sports team may be a Blackout Event. Except as
permitted by Section 15.1(b)(i) and Section 15.1(b)(ii), CIB shall not permit a Suite to be
redecorated for any Blackout Event. CIB shall provide written notice to Club of each Blackout
Event no later than sixty (60) days prior to the date of the Blackout Event, which notice shall
include (i) the name and date of the event (and, if not obvious from the name, a description of the
event), (ii) the reason such event is a Blackout Event and (iii) the Suite or Suites that will be
unavailable or are reasonably anticipated to be unavailable during the event).

Downtown Indy said...

OK, so they can 'blackout' any event at their discretion, just not more than twice a year. NCAA, SB and DNC don't count towards the 'two' count.

Wait till the suiteholders get wind of this come super bowl time!

Paul K. Ogden said...

Yeah, DI, they're going to be plenty ticked off about losing their suite for the Super Bowl.

nuke22 said...

The suite owners had a choice to purchase suites to the stadium. Nobody forced them to do this. There was a contract that detailed the specifics of suite ownership and therefore the owners should have known that this could occur.

If they didn't like the contract, they shouldn't have purchased a suite at the stadium.