Negotiating with Facility Vendors: Do it the Right Way

When rights holders and facility management collaborate effectively, negotiations are smooth, events are well run and both parties benefit financially. With the growing amount of tournaments in the youth sports marketplace and the finite amount of inventory our venues have to achieve financial goals, facility operators are being more and more selective of who they rent space to. Here is what you need to know in order to make your event the most attractive to operators. Transparency and the willingness to share information are important. Here is some key information that will help set the table for a smooth negotiation process. How well established is your event? Venues want to know that the event has been run successfully in past and has a dedicated following of teams who participate. If rights holders can show a strong track record of success, the venue will be more interested in booking your event. Where has the event been held in the past? Venues do communicate and will reach out to previous event venues to get the scoop on your event. How did your event run in the past? Was it a good experience for those involved? Did the rights holder live up to promises and expectations? Would you host this event again if giving the opportunity? Having strong recommendations from previous facilities will certainly help in negotiations. How much inventory have you needed and how many teams/participants have you had? How much participation are you expecting for the event you are booking? Rental rates are only a piece of the equation for facilities. More participants per playing surface means more heads in beds, more economic impact and more revenue from ancillary services like parking, gate, food/beverage and retail sales for the venue. What is the format of the tournament? Our favorite rights holders are collaborative in their tournaments formatting and scheduling. Having too much time between games can encourage participants and spectators to leave the venue for lunch, dinner or breaks; too little time means they won’t have time to enjoy the ancillary service in between games. Right holders who schedule in order to encourage participants and spectators to stay in the facility are preferred, as this well help generate more ancillary revenue in food and beverage, retail and entertainment. A rights holder who is willing to schedule games to help maximize ancillary revenues is a great partner for venues. What insurance and risk management protocols will you have in place for the event? The facility will require you to provide a certificate proving your coverage for the event. What event security and provisions will you make for crowd control, spectator and participant safety? Your contractual duties with the facility may include inspection of the playing surfaces, viewing areas, glass, boards, spectator stands and locker areas. What references do you have that the venue can contact? Venues will do their research, but come prepared with a list of references in including previous venue managers, CVB or sports commissions contacts, club directors, coaches, etc. Its important to note that although a strong history is beneficial in order to getting the venue you want, it’s not necessarily a deal-breaker. Our venues often partner on new events, but won’t expect to hold a large amount of inventory on prime dates on an event that is in its infancy. The most of important piece of this part of the negotiation process is to setting the right expectations with the venue operator. Don’t overpromise. Many venues are rights holders themselves and understand the time it takes to develop a tournament or event. After you have passed the discovery stage of the process and move into actual rate negotiations, it is important for rights holders to consider the ownership structure of the property. Municipal facilities built for sports tourism may find value in different things than a privately owned, for profit, facility. Public facilities may find more value in room nights and economic impact then in rental prices. Established events paying less rental could be more valuable that a less established event paying top dollar. That being said, there is a big push toward financial sustainability in the public sector so don’t be surprised if venues are no longer ‘giving away inventory’ in exchange for room night and economic impact. A balanced approach is much more enticing for municipalities. Stock photo Aneese Private facilities, whether for profit or not, may find less value in economic impact and room nights, and more value in the direct revenue associated with the event. In this case, it’s a good idea for rights holders to continue to work in conjunction with the local CVB or sports commission as they may have a budget to help offset rental costs for a privately-owned venue if it will generate economic impact for the area. What’s interesting about how sports facilities operate is that it takes a concert of revenue streams to keep them sustainab