What is meant by hospitality?
Hospitality for major sporting events is big business and is a specific way to entertain guests surrounding a major sporting event. The guests will be provided with such things as a champagne reception, full four course meal and various forms of entertainment prior to and after the event. In certain cases the hospitality will include a ticket to the event but in other cases it will not.
On-site versus off-site hospitality
Hospitality for a major sporting event can be either on-site or off-site. On-site hospitality happens on the actual site where the event takes place, for example within the specific hospitality areas of a football stadium or within areas of the pavilion for a cricket match. Off-site hospitality will take place in a site which is away from where the event will be taking place.
What is meant by exclusive hospitality?
Organisers of sporting events will often wish to provide the rights to the official hospitality for the event to one particular company. The company will pay huge sums of money to secure with the right to provide the official hospitality for the event.
As only one company will be able to provide this hospitality they will be regarded as the exclusive provider of official hospitality packages.
The exclusive hospitality provider will be the only company which is able to provide hospitality packages which include on-site hospitality and which also include tickets to the event.
What is the case in relation to off-site hospitality?
Organisers of the event will feel that it should only be the exclusive hospitality provider which is able to provide hospitality off-site as well as on-site. There has, however, been a recent decision which states that this is not in fact the case.
During the 2007 Rugby World Cup a British company was offering hospitality packages for the event which included receptions before and after the match but did not include tickets to the actual matches themselves.
The International Rugby Board (IRB) felt that the company was exploiting the notoriety of the World Cup without spending any money and in addition that they were running a parallel trade and reselling tickets to the stadiums.
The Organising Committee of the event and the IRB already had exclusive deals in place with a French catering group and another British corporate hospitality specialist to set up and sell packages for the World Cup clearly feeling that the value of these was being diminished by the off-site packages being sold.
What was the decision in this case?
In this case the court held that the British company had done nothing wrong in offering the hospitality packages for receptions before and after the matches. The reasoning was that this was a case concerned with the right to carry on a business and that no rights of the Organising Committee and the IRB had been infringed by the carrying on of that business.
What are the repercussions for the Sporting Industry?
The decision in this case effectively means that the IRB were unable to gain exclusive control over corporate hospitality at the event which they controlled. Consequently if exclusive hospitality cannot be guaranteed the value of contracts to provide official hospitality for events will diminish.
What would have been the case if tickets had been offered as part of the unofficial package?
Event organisers have the right to restrict the channels through which tickets for the event can be provided. This right is guaranteed as the event orgainsers will wish to restrict black market sales and for the safety of the event to be achieved through segregation of supporters it is imperative that tickets are purchased through the official channels.
The event organisers have to monitor who has been provided with tickets and restricting the sellers of tickets to official sellers is the best way to achieve this.
Tickets sold through unofficial channels will thus become void and access is unlikely to be gained to the stadium – this is provided for by the General Ticket Terms and Conditions contained on the back of the ticket.
In the above case the IRB argued that the British company was not only providing receptions but the unofficial packages also included tickets for the matches. If this had been the case then the unofficial packages would have been illegal as they violated the ticket terms and conditions. The court found that no tickets were being offered.
Following from this decision an event organiser can limit who provides hospitality when it includes the sale of a ticket and is on-site but cannot limit it when it is off-site hospitality and does not include the sale of a ticket.