Aspen fares well as sponsorship dollars go downhill
ASPEN In a sluggish economy, thank goodness for Budweiser.Thats not the consolation of the recently unemployed, but the company line from the Aspen Skiing Co., which inked one of its biggest event sponsors, beer giant Anheuser-Busch, to a contract extension earlier this year.The Skico also signed extensions with other longtime partners and secured some new sponsors, according to John Rigney, Skicos vice president of sales and events. With those contracts, the Skicos events department remains in a great spot in a tough market.Its clearly tight, but we have a lot of longtime partners that weve been with for several years, Rigney said. Weve certainly tried our best to do a do great job for them and make them feel comfortable with the Aspen brand. Right now, all of our events have great support.The same cant be said for others in the business of securing event sponsorship, both locally and nationally. Earlier this month, the popular 24 Hours of Sunlight in Glenwood Springs nearly folded before a donation from the local branch of American National Bank saved this years endurance race. Also among the local headlines: the death of the Jeep King of the Mountain Series, which, after 16 years, couldnt survive the blow of its title sponsor pulling its funding. This years series was supposed to kick off in Telluride next month.World Cup racing fans also will notice that this years Winternational on Aspen Mountain bears no title sponsor. In recent years, German automaker Audi had titled the event, which is put on by the Skico and the U.S. Ski and Snowboard Association (USSA).Ted Morris, USSAs vice president of sales and marketing, stressed that the lack of a title sponsor isnt a true indication of how well the event is doing. According to Morris, the Winternational still has strong support among sponsors particularly European brands, since the Aspen races will be live on prime time European television.Unlike Audi, a well-known brand in the U.S., the decision not to go with a different European title sponsor this year came down to staying away from a brand which U.S. fans wouldnt recognize. Whats really important is that weve sold all the bib sponsors, said Morris, referring to the racers bibs that bear sponsors names. Theyve sold to European companies, like Generali and Rauch.The former is a global insurance and investment group based in Italy, the latter an Austrian-based fruit juice company.One, the European sponsorships are strong because the euro is kicking the dollars ass right now, Morris said. Two, because the visibility is huge in Europe. We get European companies who want to buy that exposure. What we try to stay away from is that we dont want [the event] to be the Generali Winternational.While USSA, like the Skico, remains in a comfortable position for now Morris acknowledged that the global economic downturn has made it tough for other event organizers.Johnson & Johnson recently announced it wouldnt be renewing its top-tier sponsorship with the International Olympic Committee a revenue loss estimated near $100 million. The nations top professional womens golf circuit, the LPGA Tour, also announced that its 2009 schedule features three fewer tournaments compared to recent years an estimated loss of $5 million. Theres also the plight of NASCAR, which as ESPN reported in an Outside the Lines episode, has a $100 million contract with the most beleaguered of the big three U.S. car manufacturers, General Motors.Chevy also recently walked away from a partnership with the U.S. Ski Team after 14 years.I think theres a lot of similarities between this and 9/11, Morris said. One of those is that, even though companies have money and have budgets, getting the approval to pull the trigger on the deal seems much more laborious.Were in a couple of negotiations right now where weve got verbal agreements, but we still dont have a final deal, he added. Somethings got to get approved again, and budgets get cut again, and the people are like, Well wait and see what happens.Another trend that Morris has personal experience with is when a sponsor refuses to honor its signed contract.In the case of USSA, Morris said it currently has 20 major partners and all but one of them has been loyal.I think other people are seeing more of it, when properties are selling, Morris said. Companies are saying, Weve got a contract, but we cant honor it. And when it comes to that, the onus is on the event organizer to weigh the pros and cons of a lawsuit.Just to give you an example, this deal where this particular sponsor has told us they cant honor the contract is an annual deal of about $200,000, Morris said. Our attorneys have told us, Youre probably going to spend $100,000 on attorneys fees fighting this. It also depends on when youre suing. When its companies who are in bankruptcy or on the fringe of bankruptcy, if they owe you money, you just get in line behind everyone else. And then theres nothing left.Rigney remains optimistic that the global economy will rebound and that even in a recession Aspens brand will hold strong.While Budweiser titles Aspens three largest winter events Spring Jam, the Hi-Fi Concert Series and Big Air Fridays the Skico also maintains strong partnerships with the likes of American Express, Sprint, Coca Cola, Audi and Green Mountain Coffee, among others. Rigney doesnt see those business relationships souring any time soon.In general, yes, I think, inevitably, people are going to look under every rock to save any money they can, he said. Its going to be a tough go until the economy turns. As far as it relates to Skico, were very lucky to be in a great spot with all our partners. This, like any other year, is our chance to over-deliver and make them never want to firstname.lastname@example.org
This article is a feature of Inside Business, published Tuesdays in The Aspen Times.
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