Coliseum pays for itself
Edward Cone
News & Record
3-12-98
The Greensboro Coliseum as a profit center? Don't laugh. The coliseum gets a bad rap as a money loser, but there's more to the story than red ink in the budget.
Add up the tax dollars generated by events like last weekend's Atlantic Coast Conference basketball tournament, then factor in the value of the media exposure the ACC brings to Greensboro, and you're looking at a coliseum that is a net money-maker for this city.
The Coliseum Complex is expected to run an operating deficit of about $600,000 this year. Leave aside the quality-of-life benefits that taxpayers get from the facility, the circuses and concerts and sporting events that make this a more attractive place to live, raise children, and do business. Let's just look at the dollars that offset the operating loss.
Consider the Greensboro coliseum logos that appeared in almost every nationally televised moment of the ACC tourney. Even people who appreciate the coliseum's importance tend to underestimate the value of that logo by relegating it to the realm of the warm and fuzzy - ''You just can't buy that kind of publicity,'' they say. Well, you can buy it, but it isn't cheap.
What's a logo shot during a televised basketball game worth? About 3 percent of the cost a 30-second television commercial, according a study cited by Larry Mann, national sales manager for Fox Sports Net. With the average 30-second spot on ESPN during the ACC tournament commanding about $40,000, that means a half-minute of logo exposure would cost $1,200. Figure seven 40-minute games (we'll ignore the play-in game and the UNC-Maryland overtime) for a total of 280 minutes of game time.
Mann says a conservative estimate of the exposure garnered by those Greensboro logos on the court and along each base line would be about 10 minutes per game, or 70 minutes for the weekend. At $2,400 per minute, that's equivalent to a media buy of $168,000. ''And remember, when you host the East Regionals in two weeks, the value of your logo goes up fivefold, since the average CBS commercial will be about $200,000, says Mann.
Another estimate values this weekend's exposure at several times Mann's appraisal - more than $1 million per game. Eric Wright, a vice-president at Joyce Julius & Associates in Ann Arbor, Mich., publishes an advertising industry letter called The Sponsors Report. Wright spends a lot of time watching tapes of sporting events, counting the logo shots and multiplying them by the ad rate for the broadcast. ''We think the full 30-second rate is more accurate than the 3 percent formula,'' says Wright. ''Based on other college basketball tournaments we've covered, a conservative estimate would be 15 minutes of screen time per game, or $ 1.2 million per game for your tournament.
Now consider the marketing punch of the dateline ''Greensboro, N.C.,'' which appeared for three days running in every major newspaper in America. Anyone interested in sports got a lot of exposure to Greensboro last week, and what they learned from those ''commercials was this: There is a place called Greensboro, North Carolina, where exciting events take place in first-class facilities.
What does that message do? It builds the brand, ''Greensboro.'' We live in a branded economy - think Nike, or the Marlboro Man (once valued by Forbes magazine at $ 10 billion), or the Intel Inside campaign. Tom Peters, the management writer, talks about individuals branding themselves as companies do. As Greensboro competes for ''mindshare'' with other mid-sized Sunbelt cities, branding ourselves is a necessity. It works. ''People up here say Greensboro is the Mecca of college basketball in 1998,'' says Mann, a Greensboro native who works in Chicago.
A more direct payback to local coffers comes from taxes collected on the hotel rooms occupied and meals eaten by ACC fans. The numbers are inexact, but convention industry estimates put average expenditures at $253.98 per visitor per day. If just one-quarter of the 23,000 fans who attended the tournament spent that kind of money over three days, the return from our hotel tax and our cut of the sales tax would mean the coliseum generated tens of thousands of dollars for the city this weekend alone.
Edward Cone (www.edcone.com, efcone@mindspring.com) writes a column for the News & Record most Sundays.
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Last update: 3/15/2005; 3:25:04 PM .
