MELBOURNE (Reuters) - Signs that the Australian sporting public might be feeling the pinch of the global credit crunch began to emerge at this week’s Kooyong Classic.
While Roger Federer thrashed compatriot Stanislas Wawrinka 6-1 6-3 to win his second Kooyong title, just over 90 percent of the 8,000 capacity center court seats were filled on Saturday.
According to official figures, ticket sales for the match were 600 down compared with the last two years, when the final had been sold out.
With the Australian stock market dropping five percent on the week and forecasts of economic turmoil rampant, tournament director Colin Stubs indicated retaining corporate box holders could be a problem.
While the tournament’s sponsorship agreements are locked in for at least the next two to three years, corporate box holders only commit for one year.
“We have had some box holders with us since (the tournament started in) 1988 and the renewal rate is generally around about 85-90 percent,” Stubs told Reuters in an interview at the eight-man invitational event.
”Once we get a box holder we hang on to them (but)...the question on where it will go next year, is the acid test.
“We go back to market in February to see if they will be prepared to sign on for another year.”
Stubs accepted the economic downturn could create further problems for next year’s tournament as even die hard fans reduce discretionary spending on luxury items such as sporting tickets.
“The ramifications of people’s superannuation going down the gurgler, companies having to tighten their belts and unemployment will probably roll out this year,” he said.
“I think there is more to come.”
The tournament has survived tough times itself.
The 2005 event, won by Federer, was run without a naming rights sponsor, and when insurance company AAMI signed on for three years in 2006, Stubs half-jokingly said he would now be able to put food on his table.
Despite the lack of major sponsor there was no question of walking away, he said.
”We made a commitment to proceed, come what may. It was a tight year. We battened down the hatches and kept the expenses down to record lows.
”At the same time we didn’t compromise the look or feel of the event.
”I don’t think any average person would have picked we didn’t have a (naming rights) sponsor and we presented an event that depicted we were on a roll.
“It was a hard year but at the end of the day it achieved the goal of maintaining the asset value and credibility of the event.”
It was that decision not to reduce that brand value and to protect the integrity of the tournament, that has kept Price Waterhouse Coopers partner Pete Mastos and RK Consultancy Services managing director Robert Kalivoda returning each year.
Their aims of purchasing the boxes at the leafy Kooyong Lawn Tennis Club, which used to host the Australian Open, were the same -- building relationships with their clients.
”I don’t like to use the word networking but there is nowhere better I can speak to my clients,“ said Mastos. ”The most value we get out of it is getting to know the people.
“It’s all about relationship building, drilling down that one level and getting to know the person outside the office.”
Larger scale events were not only more expensive, but also more restrictive and less intimate, Kalivoda added.
Both said they had noticed other corporates had reduced the number of boxes they took in 2009 and were acutely aware that future belt tightening may be on the cards.
“We are certainly not immune to anything,” said Mastos.
”There has been a top-down view on the return from our marketing expenditures.... however, we would not do it if we didn’t have the feedback from our clients.
“They tell us they want this.”
Editing by Pritha Sarkar