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Recent Cash Flows to the Mercedes-Benz Superdome

Recent Cash Flows to the Mercedes-Benz Superdome. Brandon Zeerip SM 346 1/24/12. Food Revenues. Busiest 4 Day Schedule in 37 years January 1 st to January 9 th 2 New Orleans Saints games, Allstate Sugar Bowl, Allstate BCS National Championship

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Recent Cash Flows to the Mercedes-Benz Superdome

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  1. Recent Cash Flows to the Mercedes-Benz Superdome Brandon Zeerip SM 346 1/24/12

  2. Food Revenues • Busiest 4 Day Schedule in 37 years • January 1st to January 9th • 2 New Orleans Saints games, Allstate Sugar Bowl, Allstate BCS National Championship • Centerplate (Superdome food-service provider) • National Championship Game: $2.6 Million (avg. of $33 person spent) • 150% greater than the normal amount of money spent in a Saints game • $6 to $7 greater per person than the 2008 National Championship game (last time the National Championship was held in New Orleans) • Gross food revenue of over $7.75 million during those two weeks • The BCS per cap includes concession and catering sales outside the dome at the Champions Square, an outdoor space, and a private party at Capital One Clue

  3. Mercedes-Benz Superdome Naming Rights • Mercedes-Benz was named the Superdome’s naming rights holder on October 4, 2011 • The deal is a 10 year contract for$50-$60 million • Media exposure for national title game was valued at $4 million for broadcast, almost a half million for newsprint, and a little over $100,000 for social media • TV exposure for Mercedes-Benz came from announcer mentions, and interior and exterior stadium signs. • The term “Superdome” did not count toward valued media coverage. • Ernst Leib (Mercedes-Benz USA President and CEO) announced that they are going to produce cars under the $30,000 to attract more customers (product development & market penetration)

  4. SWOT Analysis for Mercedes-Benz Naming Rights to the Superdome • Strengths: Brand exposure during game-play (for fans at the game and at home), could capture more revenue from the wealthy end of the fan spectrum. • Weaknesses: delayed recognition for naming rights to the stadium (some might still call it the Superdome), foreign brand, luxury car- lower income families might not be able to afford their cars. • Opportunities: impact fans’ car purchases, deeper market penetration for Americans and New Orleans residents, develop a new line of cars that cater to more diverse income levels. • Threats: negative reaction from fans (foreign attribute)

  5. 1. What are possible advantages of in-stadium signage vs. commercial advertisements? (specifically for Mercedes-Benz) 2. How much of a role do you think the teams playing in the BCS national championship contributed to the food-revenue streams? (Alabama and LSU..about $2.6 million) 3. Do you think it was a smart move for Mercedes-Benz to purchase the naming rights of the Superdome? (10 years for between $50-60 million)

  6. As seen on the previous slide’s photo, there are many locations where Mercedes-Benz has their name/logo located. Fans always see some sort of MB advertisement when they are watching the game. In terms of fans watching the game on TV, they also see much of Mercedes-Benz logo on the field and in the stadium. These are advantages over commercials because some people may change the channel during commercials to another program/game. In addition, if people record the game (3rd shift labor force), they can skip the commercials but will still see Mercedes-Benz logos during the game. • I believe that LSU and Alabama had a very positive relationship with the high food revenues. Both schools were regional and within driving distance. It was estimated by MB Superdome officials that 35,000 to 50,000 people showed up in town without tickets (remember the $33 per cap included Champions Square and outdoor space). Many of those fans brought RV’s and tailgated hours prior to kickoff. • It was a very smart move for Mercedes-Benz. Media exposure for the BCS title game alone was valued at over $4.5 million. The average cost of the naming rights are $5-6 million per year. Mercedes-Benz almost covered the costs with one event in an entire year. Upcoming events include this year’s Men’s Final Four NCAA basketball tournament and next year’s Super Bowl. Also with Mercedes-Benz announcing that they will producing cars in the sub $30,000 range, they might be able to attract a new demographic that has never been able to contribute to the company’s bottom line.

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