A University of Maryland fan with a strong leg could win $101,000 by kicking a 50-yard field goal during halftime of the Terrapins game against Florida International on Sept. 23. But it will be a Las Vegas company, not the Maryland athletic department, that will be on the hook if the ball splits the uprights.
School officials made arrangements with Odds-On Promotions, a “prize indemnification” company that guarantees payment if someone cashes in, thus insuring the organizer against unexpected costs.
“We can do these promotions for a fraction of the cost,” said Maryland Associate Athletic Director Brian Ullmann, who helped organize the promotion with Odds-On and DC 101 radio. “It’s great for us, because we want people to actually win.”
Whether it’s a field-goal kick, hole-in-one competition or an attempt at a half-court shot, companies such as Odds-On are playing an increasing role in big sports promotions involving thousands, even millions of dollars in prizes.
“It’s a chance for people to get attention, and for a flat fee they can offer a prize they wouldn’t normally be able to offer because of the risk of the loss,” said David Burkert, president of Grand Prize Promotions of Richardson, Texas, which has insured more than 300,000 events.
Grand Prize Promotions is a sister company to the National Hole-in-One Association, one of the largest insurers of hole-in-one golf competitions. Together, the companies have awarded $1 million prizes to five persons, including PGA Tour veterans Tom Kite and Lee Trevino, who each scored holes-in-one during an exhibition.
Hole-in-one contests are common, but Mr. Burkert said his company is receiving an increase in requests for more unusual promotions.
“People call us with some creative ideas from time to time,” he said. “It’s a developing market. People’s creativity is the starting point. We try to work with whatever ideas they have.”
Last year, the Calgary Flames hired Grand Prize Promotions to insure an effort to boost attendance in the first period of their hockey games. The team told fans that it would give $10,000 to a lucky fan if a goal was scored in the first minute of the game. Sure enough, the Flames scored a goal within 40 seconds, putting Mr. Burkert’s company on the hook.
“We did an awful lot of research, and it didn’t seem like that ever happened, but sure enough it did,” Mr. Burkert said.
When the Phillies’ Ryan Howard bashed his final home run in this year’s All-Star Game Home Run Derby, executives from SCA Promotions, a Dallas-based company, paid the prize, valued at $250,000.
“We’re sort of the silent partners,” said Todd Overton, an accounts manager with SCA. “No one realizes anyone’s behind it, and it’s amazing how clients think of us last when we should be one of the first calls.”
SCA has reported its share of tough losses over the years. In 2004, it paid $1 million to a fan who successfully threw a baseball into a target at baseball’s All-Star Game in Houston. And the company could be required to pay $1 million to NASCAR driver Jeff Burton if he wins this year’s Nextel Cup, as a bonus offered by his sponsor, Cingular Wireless.
Gonigam’s World Furniture Mall in suburban Chicago this week saved itself nearly $300,000 by making a call to Odds-On. Store owner Andy Gonigam had promised full refunds up to $10,000 if the hometown Bears shut out the rival Green Bay Packers. The Bears won 26-0, resulting in free furniture for 206 customers.
“That was a pretty unique one,” said Zak Woodhead, senior promotions coordinator for Odds-On. “I was surprised [at the shutout] but in this business lightning can strike, and when your number’s up, your number’s up.”
With events such as the free furniture promotion, companies must usually determine the price of indemnification on a case-by-case basis. But the cost of some promotions can be steady if the odds of winning are also consistent. Promotions involving lotteries are matters of math. And SCA has learned, simply from experience, that about one out of every 22 half-court shots is successful.
A hole-in-one contest with 100 golfers and a $10,000 prize will usually cost about $275 to indemnify, Mr. Burkert said. The premium can then be adjusted based on the number of participants, length of the hole or size of the prize.
Not all promotions involve professional sports leagues; last week, Grand Prize Promotions helped insure a bean-bag toss competition at a fair in Pennsylvania. And one of SCA’s most memorable promotions involved a cow-chip toss at a Texas music festival last year. SCA also partnered with Taco Bell in 2001 when it promised free tacos to everyone in the United States if pieces of the Mir Space Station fell to the earth and landed on a giant raft in the Pacific Ocean. Mir missed.
Prize companies know they’ll make more money if no one ever wins. But what fun would that be?
“People do win money every day,” Mr. Burkert said. “Losses happen. We’re confident that at the end of the day, we’re [also] making money.”
Said SCA’s Overton: “You know you’re going to have winners. No one claim is going to hurt us.”
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