For those of who do not know, I spent five years working in minor league baseball. I worked for two teams in California and one in New York. Throughout my time with these organizations, the one thing that was constant was sales. I had to sell sponsorships, advertising and most importantly I had to sell tickets. It was great to make those season ticket sales and see my numbers grow. I took a lot of pride in my ability to get people to come to the park and to enjoy the game that I loved. There was no star power. There were no high costs. What I tried to sell people was to come see a game and have a great night at the park.
Let’s look at Miami. In the past month, Miami Thrice has been born. As expected, the Miami Heat season ticket prices increased 250% overnight, from an average of $3268.61 to an average of $8249.99. That is an average of $201 from an average of $79.22. So, they increased prices just about $5,000. Let’s say for argument sake that they sold 5,000 season tickets after “The Decision”, they grossed an additional $25 million. Looking around, the average NBA jersey costs $50. Being in the business, I know that if something sells for $50, it must cost a maximum of $20 to be produced (or $30 profit per jersey). How many LeBron and Bosh jerseys will be sold this year? 100,000? 250,000? Let’s say 200,000 and at $30 profit per jersey, that is $6 million profit with a percentage going to the Heat.
The Heat will have 19,600 people at every home game this year. At 41 games, that is over 800,000 people at the stadium this season. With costs these days, I can safely say the average fan will spend at least $50 on food and beverages (not including other memorabilia). So, you can safely say that there will be about $40 million spent on concessions at Heat games this year. If the Heat profit 40% of that money, they will make $16 million in concessions. What do all these numbers mean? It means the Heat will make a ton of change this year.
Since there were no more seats available for season tickets, the Heat ceremoniously fired their entire ticket sales staff, over 30 people. My guess is that most of these people average about $35,000 before commissions. The cost for these 30 people is about $1.1 million. Do you mean that the Heat could not find ways to keep these staff members? Maybe they did not think about it. Maybe they did not care. I do. I did that job. I have made sales and know how hard it is. Yes, after LeBron and Bosh joined, it was easy. But, what about all those days, weeks and months before? Those were the hard days.
So, this week’s Big Orange Guy’s Top 5 is “The Top 5 Ways the Miami Heat Could Have Kept Their Ticket Sales Staff.”
#1 – Raise Next Year’s Ticket Price by $1.50. By raising next year’s prices by $1.50, there would be an additional $1.2 million. In today’s job climate, I would bet that if you asked people if they would mind paying an additional $1.50 per ticket to save the jobs of the sales staff, there answer would be a resounding yes.
#2 – Increase Food Costs by $1.50 per person per game. Do you really think that food prices are not already going up? You have to be in the stadium. You have to eat their food. So, raise the cost of a hot dog by $.50 and a soda the same. Right there, you have the over $1 million needed to have people keep their jobs.
Okay, enough of the fans spending money….
#3 – Save Costs Elsewhere – Without having to sell tickets, what will the savings in advertising be? What will the savings be in printing, in the grass roots effort to attract tickets and the other printing needed to sell tickets. Where is that entire savings going? It is going back into the pockets of the owners to help pay the increased salaries. The owners could save the jobs of 30 people. Instead they are saving the money for themselves.
#4 – Sponsorship Increases – Again, do you think sponsorship costs with the Heat did not explode after the decisions were made? According to the Miami Herald, the Heat are expected to make an additional 30% to 40% in sponsorship sales. I have no idea what they make in sponsorship costs. If you assume that they gross $100 million, which would mean an additional $30 million in revenue for the Heat after the signings. So, none of the fired people could see any of that?
#5 – Playoffs! The Heat expect to make the playoffs. If they make the playoffs, according to the Heat they would make an additional $10 million in revenue. Need I say more? $10 million. Theat is more than enough to pay their salaries.
I have no idea if the fired people are getting packages. I do not know if they were offered other positions. I just know it sucks. A friend of mine was the general manager of a team and was fired three weeks before the season. I know people released for not living up to their contracts with minor league teams. This is a major franchise that should have done better to keep their staff. That is my take, my Top 5 ways the heat could have kept their staff.
Discuss this. You may agree and you may disagree. Either way, have a great week!
Tags: Miami Heat