Advertisers Tighten the Reigns on Derby

by megan ~ April 30, 2009

Apparently and unfortunately, even “The Greatest 2 Minutes in Sports” is not recession-proof.  This year’s Kentucky Derby is set to take place on Saturday but with fewer sponsors.  Bill Mudd, CFO of Churchill Downs has said that corporate demand for tickets and sponsorships at this year’s race are way down.”We have seen some softness in sponsorships and some corporate hospitality areas where companies are cutting back,” he said.  Key revenue from general admissions will largely depend on the weather during race weekend, he added.

Signs of corporate caution, besides softer ticket sales, include less willingness to sponsor drinks at the event.  This is major given the reputation the Derby has acquired over the years for being one big party filled with infinite mint juleps, bourbon, and cocktails.

To help attract fans, Churchill Downs said that for the first time since 2001 it will allow coolers with food and non-alcoholic drinks in the racetrack infield on the day of the Kentucky Derby - something that us local Kentuckians know is virtually unheard of.

It also will offer new dining options and operate a hospitality lounge for customers in premium seats.

In addition to the Kentucky Derby and horsing racing, the recession has actually hurt most U.S. sports leagues and organizations as consumers cut spending on tickets and concessions and companies like General Motors Corp and FedEx Corp reduce budgets for pricey seats and sponsorships.

Betting on horse racing has historically been considered recession-proof, Mudd said, but that is changing because of the proliferation of U.S. casinos and the weak economy.

“We’re seeing the impact of the economy … across the industry, just like everyone else,” Mudd said.

Click here to read the complete article from Reuters.