Suite surrender.(SPORTS biz)

The seats are great, the drinks flow freely, and somewhere down below there's a good game going on. For mixing business and pleasure, sports-arena luxury suites have been a go-to play for years--and a source of riches for team owners who routinely fetch $150,000 or more per season for leasing their upscale digs to corporations and business owners.

But somewhere between the Sarbanes-Oxley Act of 2002 and the economic downturn of 2008, luxury boxes went into a slump. At some ballparks, like Seattle's SafeCo Field and Milwaukee's Miller Park, teams have actually torn down luxury boxes to make room for cheaper seating.

Closer scrutiny of marketing costs is one culprit. With per-event ticket prices that can exceed $500, companies have figured out it's often cheaper to wine-and-dine clients in other ways. Plus, the boom in luxury-box construction has taken some of the luster out of the category: Today, nearly everybody knows somebody who knows somebody who has a luxury box. Finally, changes in federal law have made some big corporations edgy about accepting freebies from vendors--including entertainment at sports events.

But the biggest challenge to the enduring value of the sports-arena luxury boxes is keeping up with the sheer tonnage of events they entail. At Pepsi Center, for instance, a luxury suite that accommodates 12 seats puts its tenant in the position of managing ticket distribution for 492 seating opportunities during regular-season Nuggets games alone. Add in 35 Avalanche home games, and that's another 420 tickets to unload. Factoring in concerts, Colorado Mammoth and Colorado Crush games adds to the demand on companies that attempt to maximize the value of their suites by keeping them full of clients and employees.

"You do the math: It can be brain damaging," says Mark Beese, chief marketing officer for Denver's Holland & Hart LLP law firm.

To find a comfortable middle ground, Holland & Hart, CH2M Hill and other Colorado companies are turning to a new approach to entertaining clients at sports events. Rather than leasing entire luxury suites themselves, they're sharing access with other companies through a "fractional" leasing arrangement managed by an outside firm. The model gives participants dibs on a smaller number of tickets at a reduced number of games within a managed luxury-suite environment, where they can hobnob with invitees from fellow suite-sharers. That way, participants get the benefit of schmoozing in a casual setting without spending six figures annually.

"Attorneys like to take clients to games. It's a relationship business," Beese says. "But we don't want to waste money."

Promoting the concept is a Greenwood Village firm, Sports Shares Colorado, founded by private equity investor Tyler Tysdal and co-owned by former Bronco wide receiver Ed McCaffrey. Sports Shares works with venue owners like Kroenke Sports Enterprises and the Colorado Rockies to arrange long-term leases on luxury suites it then parcels out to members. Sports Shares participants get anywhere from 24 to 52 events per year at annual per-seat prices of $5,000 or more.

The key to success, believes Vice President of Sales Todd Lindenbaum, isn't just distributing seats at events but assisting tenants in organizing and managing a soup-to-nuts collective of tasks relating to client entertainment. Sports Shares does everything from reminding clients about upcoming games to arranging for last-minute ticket swaps to pampering guests with a full-time concierge at the venue.

"Anyone can buy a suite," Lindenbaum says. "But the bundles are a lot more difficult than they sound."

Lindenbaum worked the fractional-tenant model in Atlanta, where he started a company that subleased luxury suites. Tysdal, who was formerly the president of a Denver sports-consulting firm, read about the concept in a business magazine and enlisted Lindenbaum to help launch Sports Shares. The company's big-picture goal is to replicate the approach across dozens of markets--Atlanta has just been added--creating a one-stop resource for companies that want to get in on luxury-suite entertainment without committing to a six-figure expense or worrying about unused tickets getting tossed out.

"At the end of the day it's all about not wasting a single ticket," Lindenbaum says.

Stewart Schley writes about sports, media and technology from Englewood. Read this and Schley's past columns on the Web at cobizmag.com and e-mail him at ss_edit@comcast.net

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