The $350,000 question

Posted by: George Freeman

The $350,000 question - 09/05/01 09:06 AM

The PBA is asking host centers to put up $350,000 to hold a PBA event in their center, with the PBA keeping the TV rights. The host center basically gets to keep any revenue coming in from pro-ams and gate entries. This is the new deal in a nutshell. However, who is going to take this deal?

I'm not a bowling center proprietor, and I've never owned a buisness, so maybe there is a dynamic here I am missing, and I am perfectly willing to admit that. However, I just don't see how a proprietor could make back $350,000 on a PBA event, much less turn a profit, and if a center knows in advance they'd never be able to get their money back, why would they want to host a tournament? The logical route to go is to secure sponsors, and post their banners at the center. But even if you secure 100 sponsors, they'd have to put up $3500 a piece, I think even the major cities like Chicago and New York would have trouble finding 100 sponsors at $3500 a pop. Then you'd need a very successful pro am to get any kind of a profit.

That's about the only ideas I can come up with, if anyone has any other ideas on how to make hosting a PBA stop not sound like financial suicide, I'd love to hear them.
Posted by: usr bin geek

Re: The $350,000 question - 09/05/01 01:47 PM

Are the new PBA owners trying to fail? :rolleyes:

Looking at it from strictly the proprietor point of view (in addition to co-owning this site I also own a bowling center) I don't think it makes any sense financially. In fact, fiscally it's a significant loosing venture. Public relation wise it benefits only the bowling community (which is a shrinking customer bases) and it does nothing or very little to bring nonbowlers in to a bowling center. It even fails to attract much attention of nonbowlers (potential open bowling customers.)

If a proprietor has $350,000 to throw around on what really can only be classified as possibly a marketing/public relations venture then one could spend it on something that would bring the general public in the building and attract more public attention. To throw that amount of money at what is unfortunately only followed by a very small niche of people doesn't make much business sense.

It's not difficult to think of much better ways to spend $350,000. It could be used to modernize a center; purchase new video games, bring new life to their stereo and lighting system, remodel a boring bar into a heck of a sports bar, or put in batting cages or any number of ancillary businesses.

If not modernization, with $350,000 any number of things could be done that would better represent the center to the widest amount of people--which is the goal when you spend money on marketing and public relations.

Just thinking off the top of my head a savvy proprietor could run a huge charity bowl-a-thon. Companies could enter teams by presenting a $1000 donation to their favorite charity. All the teams bowl and the one that win's, their charity gets the $350,000.

Think of the media attention THIS would garner. It would be a heck of a lot more positive for the proprietor as he's makes contacts within corporations (which gives an opening to sell them on a corporate parties) and all the media attention, not to mention all the sales the day of the event. PLUS he doesn't have to give up all his leagues for a week in addition to throwing out the $350,000.
Posted by: George Freeman

Re: The $350,000 question - 09/05/01 04:06 PM

Very good points Steve. I don't think the PBA is making very wise decisions in regards to how they go about buisness. It certainly has made me lose confidence in the Nike guys as well, nobody seems to be making very good decisions.

It's not like the bowling industry is rocket science...this is common sense type stuff. You have to make a deal worth the proprietors trouble, or you aren't going to get any takers, thus there will be nowhere for the tour to bowl in 2002, thus, we may just see the tour get sold next year period.

I had really hoped the sale of the PBA was going to turn our organization around, and it would have, had the right decisions been made. Telling proprietors to shell out over a quarter of a million dollars for one tournament is not the right decision.
Posted by: Pizzaguy

Re: The $350,000 question - 09/05/01 08:52 PM

I agree with everything Steve said in his post. Let's look at the numbers here. Steve or George, feel free to correct me if I'm wrong anywhere.

You laid out $350,000 to host the tournament.
Let's say you're live in a real bowling hotbed and are able to attract 10,000 paying customers over the 6 day run at $10 per head. That's $100,000 down.

You run a really successful pro-am, maybe 300 entries at $150 each (and for sake of discussion, say each ball you paid $50 for). That's another $30,000.

Of course, all the ancillary sales (snack bar, lounge, video games, etc.) well be slightly up depending on how popular the center is during the week, so let's say an extra $10,000 from that.

You're still $210,000 short. Hmm. OK, you sell a bunch of sponsorships and advertising, generating $100,000 in revenue. Still $100k short. Not to mention the increased expense in generating this revenue (employees, commissions, advertising, etc.)

This is financial suicide for most center operators. Unless you are in a town with MAJOR corporate sponsors who get free TV advertising time out of this, I don't see how it is possible to break even on this. And I think I used rosy, almost unrealistic numbers in these calculations.

If anything, the PBA should be looking to build partnerships here, not exclude everyone from participating. I have to wonder if the PBA will even exist in a few years if this is the kind of decision making coming out of Seattle.
Posted by: Angel

Re: The $350,000 question - 09/06/01 12:58 AM

I just checked this week's Lotto numbers, and unfortunately I came up 4 short. Needless to say, without the lottery, $350,000 is a huge investment.

As a bowler, I'd want to see a tournament live, but not at $150 or more for a pass to watch the week's festivities. I'd be afraid what it would run for a family of four to watch.

I don't bowl pro ams myself, but I usually make sure my son gets a chance. But I wouldn't pay an outrageous sum for him to do so.

If a proprietor was looking for ways to come up with the money because he truly believed in the PBA, as a fan, I'd have to tell them the prices can't go much higher than they are right now.

I too am worrying that the new PBA guys have tried too hard too fast to build a money-making venture. The PBA tour was not a turn-key investment. The problems that grew over years can't be fixed by hiking prices. A Yugo with a new paint job is still a Yugo. OK, that's harsh. Maybe I should have said a Ford with a new paint job isn't exactly a Ferrari.

Uh oh, I feel a column coming on.....
Posted by: George Freeman

Re: The $350,000 question - 09/06/01 05:29 PM

They've definately gone about this the wrong way. I wonder what the excuses will be when it fails.

What we really need is an Eddie Elias type person who is willing to pound the pavement, park themselves in front of places to givethe PBA a chance, like Elias did. He knew more about marketing than anyone else that has ever dealt with the PBA...Nike guys included.
Posted by: chimp

Re: The $350,000 question - 09/07/01 02:26 PM

Better check the facts, the PBA fee is $35,000, not $350,000.
Posted by: usr bin geek

Re: The $350,000 question - 09/07/01 09:53 PM

Quote:
quote:


The PBA has not responded to our requests for more information however several people who were physically in the recent Newark meeting with the PBA's Steve Miller have confirmed the $350,000 figure.
Posted by: George Freeman

Re: The $350,000 question - 09/08/01 09:34 AM

Quote:
quote:


LOL The facts are fine, you're just missing a zero. laugh

Not only that, but the asking price for a senior stop is going to be $164,000. I can't see people wanting to pay $164,000 either.
Posted by: chimp

Re: The $350,000 question - 09/10/01 11:08 AM

You are confusing the cost of the host center fee ($35,000), with the cost of the naming rights sponsorship fee ($350,000). The naming rights sponsorship fee is something that a Burger King would pay.

For a senior stop the host center fee is $25,000, the naming rights sponsorship fee is $164,000.

Just call Steve Miller and ask him. Or ask any proprietor on the upcoming tour if they paid $350,000.
Posted by: George Freeman

Re: The $350,000 question - 09/10/01 03:27 PM

The $25,000 you are referring to is the profit margin the PBA has to have to consider running a senior event "worthwhile".

The figures are correct, but you are right, the only way for a host to get that kind of money is to have a Burger King type sponsor put it up.
Posted by: Anonymous

Re: The $350,000 question - 09/10/01 10:22 PM

George & Steve - Really respect what you're doing for bowling however I believe Chimp may be right in this case. I asked Ian Hamilton the same question on my show Saturday and he said the centers are paying no more than they did last year. That leads me to believe that the "BIG" figure is for naming rights - Keep up the good work guys. E-mail me if you want to chat about it. :rolleyes:
Posted by: George Freeman

Re: The $350,000 question - 09/11/01 01:08 AM

Maybe this will help you guys. At the meeting in Newark with Steve Miller and the senior players, the following criteria was given for hosting a senior PBA event:

Any promoter/host/proprietor/outsource who wishes to host a senior event must pay the PBA $164,000. To offset the $164,000 said promoter/host/proprietor keeps all entry fees, pro am revenue, sponsorship revenues, gate reciepts. They must be able to show a $25,000 profit to the PBA.

The same formula is being used for the regular tour, only instead of $164,000, the figure is $350,000.

The problem alot of people are going to have is I'm not sure how many people are going to be willing to put up that kind of money for a professional bowling tournament. The only way to go about doing it would be to secure a major corporate sponsor like Chimp said. The money has to come from somewhere, and if a host can't find an outside entity to put up that kind of money, guess who has to pay it if they want to host a PBA tournament? That's right kids, the host.

The point was made that this might acutally be a blessing for the seniors. Some of the sites that have hosted regualar tournaments in the past may bristle at the $350,000, and see $164,000 as a more economic alternative. As it is now the senior tour is on the brink of being closed out completely, which would not be a good thing for bowling period. Now as to whether this will get more buisness for the senior tour, I don't know. I guess we'll have to wait for 2002 to know for sure. I know it would be a shame if the senior tour went defunct. As players, we're all (God willing laugh ) going to be 50 someday, and the senior tour is still a great commodity for bowling, I don't care what they say. You got some of the all time greats that have ever played the game either over 50 or coming up on it. They are still a great draw for fans, and have much more to give the bowling community.

But getting back to the original point, these aren't figures we just pulled out of thin air, this is how it is going to be in 2002...unless of course the PBA changes its mind, which may very well happen too. Who knows what goes on up there. wink

I hope this clears up any confusion. If any of you are going to be at the World Team Challenge in Melbourne,FL this weekend, feel free to hunt me down, I'll be bowling A squad. Just have them page me to the front desk and I'll gladly answer your questions.
Posted by: chimp

Re: The $350,000 question - 09/12/01 04:53 PM

To repeat, zero proprietors paid $350,000 this year for any of the PBA events, they paid $35,000. Call any of them and ask.

George, your facts are just something copied from a post off the PBA Forum, hardly "official" information.
Posted by: George Freeman

Re: The $350,000 question - 09/12/01 05:50 PM

As far as 2001 goes, I really don't know what hosts paid. If you say it was $35,000, then I'll take your word for it.

However, if you'd be so kind to actually read what I said, we are talking about 2002, not 2001. I have no idea what they did this year, so I won't comment on it.

And as far as getting my information from the PBA forum......ummmm...no. I was made aware that there was information on the PBA forum, and I used the numbers they list because I didn't know the exact breakdown. But I didnt get my information from the PBA forum. laugh

So, as far as 2001 goes, you could very well be right, I have no reason to believe you aren't.
Posted by: chimp

Re: The $350,000 question - 09/12/01 06:30 PM

Okay, the PBA has 10 tournaments on their website in 2002. Call any of those proprietors and ask what they paid...

Same answer, $35,000.