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Growing the herd
Published January 3, 2011
Paul Andrews spent his childhood summers working on his grandfather's 6,000-acre ranch in Golden, Colo., but he didn't choose to build a career for himself on the farm. Instead, he went on to become executive vice president of Kroenke Sports Enterprises, which counts the Denver Nuggets, Colorado Avalanche and Denver's Pepsi Center among its holdings.
Yet Andrews now has found a way to put his marketing savvy to work on the passion he's kept on the sidelines since his youth. He decided last fall to leave his post at Kroenke and to take over as president and CEO of the National Western Stock Show in Denver. Like those summers with his grandfather, this is an event Andrews has attended since being a youngster.
"In recent years, I didn't look at it with an eye as president and CEO," said Andrews, who joined National Western on Nov. 1. "I was just walking through with my kids. It's a chance to use some of my past skill set."
A mainstay in the West, livestock shows such as the National Western have grown into monthlong affairs that can attract more than 2 million visitors. Numerous sponsors have come on board to reach ticket buyers, who attend to see the traditional livestock exhibitions but also rodeos, concerts, vendor booths and other attractions.
It's a raucous good time that also carries a do-good distinction. Typically operating as 501(c)3 educational nonprofits, the shows generate millions of dollars for scholarships and to support agricultural education.
Andrews will run his first National Western when the 105th edition gets under way Saturday. Some of his tried-and-true marketing techniques from team sports will be played out for fans of the western tradition. Among them:
• Ranking rodeo events from most attractive (A) to harder to sell (C), and marketing the latter category more aggressively.
• Instituting "family nights," with a price of $68 to $80 for four tickets, four soft drinks, four bags of chips and four hot dogs.
• "Boots Night Out," where $29-$49 gets you two tickets and two beers.
• Themed admission events, such as USO Night and National Guard Night.
Andrews expects the 2011 event to draw more than 100 sponsors, including such stalwarts as Cinch Jeans, Toyota, Dodge, John Deere, 9News, US Bank and Pepsi. He cites energy and investments as two more categories he'd like to land in future years.
The National Western is big business, but even with 633,000 attendees in 2010, it pales in comparison with the Houston Livestock Show and Rodeo, which drew 2.14 million visitors in 2010, and the San Antonio Stock Show and Rodeo, with 1.35 million.
Leroy Shafer, chief operating officer of the Houston show, rattles off the numbers behind operating revenue of $90.8 million, generated by:
• $44 million in ticket sales.
• $17 million from a category that includes junior livestock sales, scholarship donations of $2.5 million, a wine show/auction that generates more than $1 million, and $11.1 million from membership dues and fees.
• $11 million from sponsorships.
• $2.2 million from commercial exhibit rental spaces.
• $1.5 million from the event's share of food and beverage sales inside Reliant Stadium, whose main tenant is the NFL's Houston Texans.
A "heritage" partnership is the highest level at Houston, and Ford, Coca-Cola, MillerCoors, BP and Reliant Energy make up the 2011 list. Banks, insurance, phone and service companies are among the other sponsors. Show executives declined to reveal sponsorship costs.
"It's a very sophisticated world today in the sponsorship business," Shafer said. "… We didn't have exclusive sponsorships until the early 1980s. Back then, it was pretty easy to sit down with somebody, 'you'll get our signage, our logo marks, you'll be an official partner.'
"Today it is a Madison Avenue-driven business, a very sophisticated business of buying and selling sponsorships. You'll have to sit down with your partner, see what they want, what impression value they're going to get out of it. If you're talking exclusivity, then it becomes a negotiation and a bidding process."
Houston's demographic study shows that 71.4 percent of ticket buyers come from the market's eight-county area, plus Galveston and Texas City. And though it doesn't track attendees by race or ethnicity, Shafer knows that Houston must create strategies to appeal to younger groups as well as to a very diverse city where Anglos have become a minority. Major 2011 concert acts — a sampling includes Kenny Chesney, Mary J. Blige, Alan Jackson, the Jonas Brothers, Tim McGraw, Selena Gomez and Justin Bieber — are one strategy to draw youth and minorities.
Head about 200 miles west of Houston and you'll find the huge San Antonio Stock Show and Rodeo, which re-signs most of its sponsors each year and which drew more than 1.3 million attendees in 2010.
"We're very fortunate," said Glen Alan Phillips, assistant executive director. "Over 90 percent of our sponsors return every year, and we're very thankful for that."
One big change for the 2010 show was a switch in the vehicle dealer sponsorship from GMC to Ford. GMC, a longtime sponsor, had a reduced role at the 2010 show, and is gone this year.
Still, sponsorships account for about 10 percent of show revenue. San Antonio's 2010 sales were about $27 million, with 40 percent coming from ticket purchases — and 57 percent of the attendees were women.
Trying to broaden its appeal, San Antonio is adding a wildlife and natural resources exhibit this year. "It should be both educational and entertaining," Phillips said. "We're trying to hit all demographics. We continue to try to become more diverse in our general attendance."
They won't hesitate to tell you everything's bigger in Texas, and the San Antonio show, like Houston's, reflects that: 5,000 volunteers, numerous rodeos and concerts, a large junior livestock show, and $8.5 million given to youth education in the form of auctions, show premiums, scholarships and more each year — totaling more than $105 million since the scholarship program began in 1984.
"Many of our volunteers are former scholarship winners; that's awfully rewarding that they believe in what we're doing," Phillips said.
The Houston show allotted more than $9 million to pay for 562 scholarships from the 2010 show. Overall, it's funding 2,004 scholarships in Texas college and universities.
"We are a charity, but we're also a big business," Shafer said.
Bruce Goldberg writes for the Denver Business Journal, an affiliated publication.