December 7th, 2005

New Orleans Seeks Corporate Sponsors for Mardi Gras

By Corey Dade
Wall Street Journal

New Orleans officials think they have found a way to show that the devastated city still can throw a wild party: selling the rights to be "official sponsor" of the next Mardi Gras for $2 million.

For the first time since New Orleans began holding Mardi Gras parades 150 years ago, the city government is planning to aggressively solicit corporate sponsorship to cover the costs of police overtime, street cleaning and other city services that make Mardi Gras possible, as well as help pay for a national advertising campaign. Within the next few days, New Orleans officials are expected to seek formal proposals from possible sponsors, and the winner could be chosen as soon as a week later.

Members of the Mardi Gras krewes, or social clubs, pay for their own floats, costumes, bands and trinkets through dues and fund-raisers, and New Orelans has an ordinance that forbids corporate sponsorship of parade floats.

Instead, the official Mardi Gras sponsor will get the exclusive right to Webcast from dozens of parades and parade-reviewing stands for eight days in late February, according to a "sponsorship proposal" from New Orleans Mayor Ray Nagin’s Office of Economic Development. The perks also include spots for riders on parade floats, "inclusion in all press announcements" and "right of first refusal" to sponsor Mardi Gras again in 2007. Under the city’s plan, smaller-scale sponsorships also will be for sale for $12,500 to $250,000 each, offering graduated benefits such as the number of placements in print, television and radio ads.

Mardi Gras float from the Krewe of Iris rolls down New Orleans’ St. Charles Avenue in 2003.

New Orleans officials have ruled out offering a title sponsorship, in which a company’s name would appear before the words "Mardi Gras." And corporate names won’t appear on floats. "We plan to handle that in a discreet way that doesn’t compromise the cultural significance of Mardi Gras," says Ernest Collins, the economic-development office’s executive director of arts and entertainment, who drafted the sponsorship proposal.

Some krewes had threatened to boycott Mardi Gras when the city proposed scaling the usual 12-day celebration back to six as a way to cut costs. They relented when the city added another weekend and floated the idea of corporate sponsorship to cover the extra costs.

But opening Mardi Gras, long billed as the "greatest free show on earth," to sponsors is likely to increase criticism from traditionalists who cherish its status as one of the few major U.S. sports or cultural events that are essentially devoid of advertising.

"Once you commercialize, then the fun leaves," says A. Pete Sanchez, Carnival activities chairman for the Krewe of Zulu, the oldest and largest African-American Mardi Gras club. "The corporate sponsors will have all their rules and regulations, and before you know it, you have a three-ring circus, with all the hoops we’ll have to jump through."

Mr. Sanchez’s krewe has long relied on corporate sponsors for its Lundi Gras Festival, held along the Mississippi River the day before Mardi Gras ends, but he says the group wouldn’t put logos on its parade floats. A parade and related festivities can cost a krewe from $100,000 to more than $1 million for the so-called super krewes.

New Orleans officials say sponsorship revenue is essential to salvaging Mardi Gras. The financially destitute city, which has been forced to lay off workers, expects to spend roughly $4 million on city services during Mardi Gras. City officials say a successful Carnival season would demonstrate the resilience of New Orleans and prove that the city is prepared to handle large events again.

"This event drives our economy," Mr. Collins says. "We need to send a message to rest of the world that we’re open for business." Mardi Gras drew an estimated 1.4 million visitors and generated $220.5 million for the New Orleans economy in 2003, the latest year for which figures are available. The windfall spreads to hotels, caterers, florists, banquet halls and costume designers. Some companies take in most of their annual revenue during the event.

New Orleans hasn’t begun negotiations with any potential sponsors yet. Despite the flashing of exposed body parts and the excessive drinking that help give Mardi Gras its rollicking reputation, city officials are unlikely to court sponsors that might be objectionable, such as liquor companies. Instead, they will target companies, such as technology and entertainment firms, with lots of customers from 20 to 35 years old, because that age range includes many Mardi Gras tourists. City officials say their legal department has determined that the proposal doesn’t violate the ordinance barring corporate sponsorship of floats.

The chance for even a limited association with the most famous party in the U.S. is expected to attract keen interest. And judging by current sponsorship costs, which can reach tens of millions of dollars or more, Mardi Gras could be a fruitful investment.

"The impression that a company is really doing something positive could really push the value of that package far beyond the tangible benefits," says Jim Andrews, senior vice president of IEG Inc., a Chicago company that tracks corporate sponsorship. One risk: Mardi Gras sponsors might be seen as having spent their money better by "going to the Red Cross or helping somebody rebuild their home, instead of paying for a party," he says.

Meanwhile, New Orleans officials trying to lure sponsors will have to overcome damaging comments last weekend by Mr. Nagin, who told displaced residents living in Atlanta that he wanted to cancel Mardi Gras but was overruled by Louisiana Lt. Gov. Mitch Landrieu, who oversees tourism and cultural events, and tourism leaders.

"The mayor is crippling us," says Brandon Mary, a New Orleans lawyer now in San Francisco, who is using his contacts to find interested companies. "I’m not stopping what I’m doing, but it certainly gives me an Achilles’ heel," Mr. Mary says.

Nagin’s office did not make him available for comment.

The Mardi Gras season starts Feb. 18 and will include parades of more than 25 krewes, according to city officials. Hurricane Katrina is likely to be featured prominently; the Krewe du Vieux, known for its irreverence, has announced that its 2006 theme will be "C’est Levee."

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