Our Editor BILL JAMIESON welcomes you – or more accurately not – to the booming world of corporate entertaining…
The Rugby World Cup has proved to be a lucrative bonanza for the corporate sponsorship industry. But the phenomenon is much wider than corporate boxes.
“All but the super-rich”, wrote Simon Kuper in the FT last week, “are being priced out of sporting fixtures once available to everyone”.
It’s not just the discomfiture of Wentworth golfers, shocked to discover they would have to pay a fee of £100,000 or lose their membership to the ancient English club; tennis tournaments, motor racing and now football are becoming the top-priced hospitality venues of choice for corporate hospitality, networking and business schmoozing.
“Everything glorious” Kuper wrote, “is being taken over by the 1 per cent.”
The soaring popularity – and cost – of corporate entertainment and networking at sports events hoists a defiant two fingers at the complex web of rules and limits on such entertaining.
The British Bankers Association guidance brochure on corporate hospitality and gift-giving runs to 50 numbing pages. It covers regulatory obligations, anti-corruption laws, the Bribery Act, risk assessment, due diligence and internal audit requirements – all this even before Her Majesty’s Revenue and Customs muscles in with its unsparing examinations.
If your bank manager treats you to a lunch and corporate box hospitality ticket at Murrayfield or Celtic Park, chances are that he – and you, unknowingly – have been put through the hoops (that’s lower case here, Ed) on tight rules governing entertainment and hospitality. Your name will almost certainly have been entered into a gift register and cross-checked against other such invitations to cordiality lest corporate generosity may be seen to have crossed an invisible barrier to an inappropriate inducement.
But that, for many companies, is precisely the reason for taking a client or business contact to a high price football fixture with all the trimmings.
The point of such hospitality more often than not is to cement cordial relations, to put a human face on the functions of a firm, to mark a deal successfully concluded and create the ambience for future deals.
Whatever purpose or function, the corporate hospitality business has never been bigger. Tens of millions of pounds are spent at sporting events, even though you may find on a visit to your local “private wealth manager” that the chocolate cookies in the conference room are kept in an armour-plated jar.
Not long ago it was a good seat and a half time drink. Today, says Kuper, “it is more of a caviar-blini brigade… we are now seeing the plutocratisation of sport.”
The cheapest season ticket for Arsenal Football Club is £1,014 and probably now the most expensive in the world.
At Chelsea Football Club season ticket prices range up to £1,250 (though this may now have come off the boil, given recent form).
This boom is not yet greatly in evidence at the average Scottish football club. Brechin City is hardly likely to suffer the fate of Wentworth golfers. At my home town of Kilmarnock, an annual season ticket ranges between an undemanding £280 and £330 while the nearby – and excellent- Rugby Park Hotel – offers good value for money.
However, Glasgow Celtic (season tickets range from £337 to £559) has become the venue of choice for many business gatherings: a season’s hospitality facility in the comfortably appointed Club Celtic Bar costs £1,470 – a fleabite compared with hospitality packages at the St Andrews Old Course or Troon. It is a pleasant and efficiently staffed venue, providing you are easy with the colour green, as in green walls, green carpeting, green chairs, green glasses and green tableware.
The problem – evident as much at wealthy clubs down south as here – is the latent tension between the traditional working class culture and ease of access to The Beautiful Game and the exclusive environment of the corporate hospitality suite.
At some point the ever expanding ‘apartheid’ facilities for revenue-enhancing business entertainment must come into conflict with the open democracy of the terraces.
But such business hospitality entertaining at sporting events is now a global phenomenon. Previously such ‘high end’ networking was confined to international business conferences and the Davos World Economic Forum. But now you can bump into the French presidential candidate Nicolas Sarkozy in one of the VIP salons at Paris Saint-Germain’s stadium. France, says Kuper, now has a strategy of bidding for every big international sports event, “partly because it wants a slice of the business that gets done at the stadium.” But such stadiums and the corporate hospitality facilities that go with them are eye-wateringly expensive. Ever upward goes the cost – and ever upward the charges for TV rights, the tickets and all the supporter accessories.
In China the elite gather at golf courses, where government officials with ostentatious “golf tans”. The golf resorts, writes Dan Washburn in his book The Forbidden Game: Golf and the Chinese Dream, are built with the aim of promoting the sale of luxury homes.
That is surely “inducement” par excellence.
Compare this to the requirements set out in the BBA guide for such entertainment here. “Tools to demonstrate effective implementation may include… reporting of unusual or unauthorised gifts or hospitality; numbers of staff trained on gift and hospitality policies… dates of hospitality offer made, recording entry and acceptance; details of the colleague giving or receiving the gift, entertainment or hospitality (name, employee number, business unit, role); details of the third party individual / organisation giving or receiving the gift, entertainment or hospitality (name, company name, role, relationship to colleague); risk assessment questions e.g. timing around contract negotiations, exposure to public officials etc.; details of the gift, entertainment or hospitality – what it is, estimated value, other colleagues involved, authorisation details; rationale for accepting / declining the gift, entertainment or hospitality and evidence of any approval given”.
Yet despite all this, corporate hospitality is booming as never before – and with no ceiling in sight.