NEW YORK (Reuters) - New York’s business media discovered a tangible consequence of the financial crisis last Friday: no more free drinks at their annual black-tie gala.
Unlike years past, the cocktail hour that preceded the Financial Follies dinner came with a price tag. Mixed drinks and wine cost $11. Water cost $6.
The reason? The New York Financial Writers’ Association, which holds the Follies at the Marriott Marquis Hotel in Times Square, could not get anyone to sponsor the $25,000 tab.
“I really think it was a sign of the times,” said Jane Reilly, executive manager for the association, which holds the Follies to raise money for 10 $3,000 scholarships and to pay for the group’s existence.
The loss of funding of the Follies symbolizes the crisis facing not only Wall Street but many media organizations suffering from falling advertising and, in the case of many magazines and newspapers, circulation.
Some of the financial institutions and the companies that work for them, such as public relations agencies, have disappeared. Those that survived are struggling.
A number of magazines have closed or cut back, and many newspapers have reduced business coverage and fired employees. At this year’s Follies, fewer people came, fewer sponsors paid and there were fewer “after-parties” in the suites upstairs.
“We have more important things to think about than the Financial Follies event,” said Rick Swalwell, spokesman for insurer Principal Financial Group, which sat out this year, citing market uncertainty and turmoil.
Principal, which has applied for $2 billion in the U.S. government’s bailout program, felt that flying employees in from Des Moines, Iowa, and putting them up in a hotel, was too much money amid wider market turmoil, Swalwell said.
About 1,200 people attended the event this year, which features members of the business press singing and dancing to songs that parody current events in the financial world., Last year, 1,300 guests attended.
The tables cost $3,000 each and are paid for by PR firms and the companies that reporters cover.
This year, the writers’ association sold 116 tables, down from 122 last year. It was the first noteworthy decline since 2001, a few months after the September 11 attacks, when 88 tables sold -- down from 115 in 2000.
“While we certainly think the Follies is a worthwhile organization, we simply could not afford to attend the event this year,” said Brian Henry, a spokesman for drugmaker Bristol-Myers Squibb, which attended last year.
The association sold most tables for 2008 earlier this year, before the crisis started devouring firms like Lehman Brothers and 2007 sponsor American International Group. Other companies, like Merrill Lynch, have been bought.
“If I had to sell these tickets in these markets, I‘m not sure we would have been as successful,” the association’s Reilly said.
A few bottles of wine at a Follies table can cost hundreds of dollars. The cocktail hour sponsorship runs about $25,000, Reilly said. TD Ameritrade, which picked up the tab last year, declined to do it again.
Then there are the after-parties. Ludovic Roche, vice president at investment fund manager Blumberg Capital Partners of Coral Gables, Florida, paid $25,000 for one.
That paid for a security guard, servers, finger foods like lemon meringue pie; and wine, Ketel One vodka, whiskey and soft drinks. For Blumberg, it looked like a positive move. The suite was full, and there was a long line for drinks.