APA Cost Analysis vs Pro Tour

[Flip_dat_Quarta]

APA League Cost Breakdown:

250,000+ Members (from APA Website)
$25 Annual Dues (from person experience)
$8 Weekly Fee (from personal experience)
$1,500,000 Annual Prize Payouts (from APA Website)

Assumptions:

150,000 members actively playing each week
30 weeks per year of league play

Rough Calcs:

250,000 members x $25 annual fee = $6,250,000
150,000 members x $8 per week x 30 weeks per year = $36,000,000
Total Revenue = $6,250,000 + $36,000,000 = 42,250,000 (42.3 Million Dollars)


Conclusion:

The APA is collecting 42.3 Million Dollars each year and only giving back 1.5 Million Dollars in annual payouts. So basically, the APA has 40.8 Million Dollars left over to pay for their annual overhead costs (operators, tournament setup, advertisement, accounting, lawyers, etc...) and collect the profit. The profit margin is sickening.

Why is it so crazy to think that the APA could expand by running a professional tour with monthly or biweekly $100,000 added tournaments?

Other factors/considerations:

1. This is only one league. There are many other leagues that make a lot of money as well.
2. These calculations are very conservative, I'm sure the actually amounts are much larger. For example, many players play on multiple teams each week.
3. The APA also receives money from sponsors. (Pool Dawg, Aramith, Action, etc...)
4. Creating a professional tour would increase league participation at the local level.
5. The amount of professional pool players would grow exponentially once the many short stops realize that there is a reason to put in the extra work to become a pro and make good money.
6. The APA would also make money on the pro tour, it wouldn't just be taking away from the league profits.
7. Televising the tour isn't even necessary, the money is already there!

THERE IS MONEY IN POOL! It's just not allocated correctly for pro's to survive...

 

[justadub]

"Allocated"?

The money is provided by its participants, namely the league players themselves. Why are the pro's entitled to it?

That having been said, as a league player myself, I'm not against the idea in general. As I've said before, if/when there is a structure in pro pool in the US to responsibly handle any such money provided, THEN it might be time for leagues to be involved with pro pool. So long as the pro's give back to the league system, which some appear ready to do now (i.e. Corey and DA in the recent Facebook discussion on the topic).

Right now, if you were to take .25 for each week from every league player, where would that money go, and who would be in control of it? Any bets it wouldn't be used properly, given the pro's history of self-governing?

 

[Flip_dat_Quarta]

"Allocated"?

The money is provided by its participants, namely the league players themselves. Why are the pro's entitled to it?

So you're okay with the APA collecting 42.3 Million Dollars and only giving back 1.5 Million Dollars??? If you are so against the extra money going to pro pool then you should at least be demanding bigger payouts to the league participants. The way it is now is NOT PROPERLY ALLOCATED!

Right now, if you were to take .25 for each week from every league player, where would that money go, and who would be in control of it?

The APA would be running the pro tour so they would run the tournaments and payout the pro events. There wouldn't be any shady third parties involved.

 

[Celophanewrap]

While your math is probably correct I think you theory is a little off, Not everyone pays $8 a week to play but I would suppose that it would avg. out to at least that.
How much of that $8 do suppose goes to the LO's, there are at least a couple hundred of them, aren't there? There's the overhead ie, space, staff, materials, payouts to Jeanette Lee, Florian Kohler, Dr. Tom and various others. I'm sure there is any number of consultants, legal fees, travel, taxes and things that at least I haven't accounted for. I'm not asking to challenge you, I'm asking because I don't know. After everyone and everything is paid what's left? The APA is expanding and still profitable to be sure, Canada, Japan, China, but I believe the APA population here in the United States has been about the same for last 10 years. When it's all said and done is there really enough to finance a Pro Tour? I don't know if 42 mil is really that much anymore in the corporate finance world.
I think what you're figuring for what you call overhead is probably pretty low
I seem to recall back in the early mid to late 90's when they had RJ Reynolds or Anheiser Busch behind them (Camel, Bud Light) they were a sponsor for the Pro Tour, it must not have worked out so well

 

[justadub]

So you're okay with the APA collecting 43 Million Dollars and only giving back 1.5 Million Dollars??? If you are so against the extra money going to pro pool then you should at least be demanding bigger payouts to the league participants. The way it is now is NOT PROPERLY ALLOCATED!

The APA is a business, I get value each week for what I pay. I'm not concerning msyelf with how much money they make. If you can't get $9 worth of entertainment value for a night at the pool hall, I don't think you are doing it right.


The APA would be running the pro tour so they would run the tournaments and payout the pro events. There wouldn't be any shady third parties involved.

Personally, I don't think the APA would be interested in the headache. You don't see Mark Griffin doing it, do you? And he is interested in helping pro pool. There is a world of difference in contributing to something, perhaps in a way like I described, as opposed to underwriting and being responsible for the whole undertaking.

What would be the incentive for the APA? As you've already pointed out, they are doing quite well. Why exactly would they want to try something which no one else has been able to do, make pro pool work economically in the US?

I hope pro pool gets organized. I hope all aspects of pool in the US can work together. I don't see it being leagues responsibility to make that happen tho...

 

[Flip_dat_Quarta]

Personally, I don't think the APA would be interested in the headache. You don't see Mark Griffin doing it, do you? And he is interested in helping pro pool. There is a world of difference in contributing to something, perhaps in a way like I described, as opposed to underwriting and being responsible for the whole undertaking.

What would be the incentive for the APA? As you've already pointed out, they are doing quite well. Why exactly would they want to try something which no one else has been able to do, make pro pool work economically in the US?

I hope pro pool gets organized. I hope all aspects of pool in the US can work together. I don't see it being leagues responsibility to make that happen tho...

You get your entertainment out of your weekly $9 as much as the next guy. So why are you all of the sudden so against some of that money going to a pro tour as opposed to paying for some millionaire's cocktail?

The APA makes a lot of money as it is which is exactly why they are okay with not changing anything and letting pro pool die. You are right about that. However, the incentive is that the APA would have many more participants once pro pool is actually something that people find desirable. I believe there are a lot of players that give up on any sort of pro dream once they realize how screwed up pro pool is. They would be promoting pool as a whole, which would help them since their business is based on the pool market.

 

[justadub]

You get your entertainment out of your weekly $9 as much as the next guy. So why are you all of the sudden so against some of that money going to a pro tour as opposed to paying for some millionaire's cocktail?

The APA makes a lot of money as it is which is exactly why they are okay with not changing anything and letting pro pool die. You are right about that. However, the incentive is that the APA would have many more participants once pro pool is actually something that people find desirable. I believe there are a lot of players that give up on any sort of pro dream once they realize how screwed up the pro pool is. They would be promoting pool as a whole, which would help them since their business is based on the pool market.

All valid points.

Still, business is business. It's not a philanthropic obligation. Again, if all this would work so well, why hasn't Mark Griffin done it, given his affinity for working with pro's already? If it were viable, don't you think he would love to OWN pro pool?

As for the millionaires drinking cocktails theme, that could be applied to most anything that we do for entertainment. Ever go to a ball game? Enjoy those ticket prices, and those $8 beers? Why aren't those guys spreading that wealth around? OH WAIT, thats because they are making money, and paying their players....why are they making money? TV.

Pro pool isn't making money for anybody. It can't attract a sponsor. It is completely unorganized, and has a major history of stepping on it's own anatomy.

Get pool to get its stuff together, and be reputable, and then you can get sponsorship. Which would very likely include leagues.

 

[Celophanewrap]

You get your entertainment out of your weekly $9 as much as the next guy. So why are you all of the sudden so against some of that money going to a pro tour as opposed to paying for some millionaire's cocktail?

The APA makes a lot of money as it is which is exactly why they are okay with not changing anything and letting pro pool die. You are right about that. However, the incentive is that the APA would have many more participants once pro pool is actually something that people find desirable. I believe there are a lot of players that give up on any sort of pro dream once they realize how screwed up pro pool is. They would be promoting pool as a whole, which would help them since their business is based on the pool market.

I'm sure you have realized by now that the only way The APA would take something on is if they could make money doing it. I know everyone calls this organization greedy but c'mon, they just want to be paid, like everyone else.
I would be willing to bet that they have a market analysis and earning potential done just about every year to look at the cost/benefit of putting on even one Pro Event, I'm sure it's well covered territory, there just isn't money to be made doing it

 

[Bossman225]

Well leagues now a days , at least the the apa that I play in doesn't want pro players near the leagues. I think it's hard for anyone that plays in the apa to be able to translate their play to the pro level because of how much sand bag play that is goin on. I don't like it and don't agree with it. I just got in to league play. Never been a fan of it and really still not. The only reason I joined an actual team is because I played in the apa masters and I was told in order to keep playing in the masters I had to join an actual league team. I don't really think that's fair because it's too separate things in my opinion

Sent from my SAMSUNG-SM-G900A using AzBilliards Forums mobile app

 

[jojopiff]

APA has people who own certain areas. So those people are making money and sending some (not sure actual $ or %) of your $8. It's not all APA making this money. While it's easy to make the owners (LO's) and corporate all one and the same, it simply isn't so. I don't know how much they make (I will never care) but it's vastly lower than the figure you've put together here.

I believe the pro players have a right to money from league players as they do from profits from McDonalds.

Just because APA has built a spectacular business model (note I didn't say it was good for the players, or even pool itself) they should be giving some away to pros? This is America and I'm never for someone telling me (a small business owner) how much I should make. I should make as much as I can/want (fair consumer practices assumed).

 

[Drop The Rock]

Your numbers aren't conservative. They are actually overstated. LOs, promotion materials (chalk, cups, flyers, banners etc.) employees of the main office etc. all cost a significant amount of money. This doesn't include the cost to host multiple large events over the year.

Regardless of all of this, the APA is a major sponsor of a pro tour, the WPBA. The WPBA has a 3 year deal with ESPN3 which is why the APA is involved. The fact is that unless a governing body is created to represent a men's or open pro tour in a professional way, there is no way it will gain traction.

It has to be an organization and not a players union like the one Johnny Archer tried to put together.

No right minded businessman is going to just throw money at something unless there is a serious benefit. That benefits for APA would have to be pros giving lessons, signing autographs, interacting with fans etc. they would need a pro organization to get this started for them. If APA started their own pro organization then they are just taking a gamble and increasing their overhead.

Sure, it would be nice but it doesn't make sense for them or any other league to be involved directly.

 

[Flip_dat_Quarta]

Your numbers aren't conservative. They are actually overstated. LOs, promotion materials (chalk, cups, flyers, banners etc.) employees of the main office etc. all cost a significant amount of money. This doesn't include the cost to host multiple large events over the year.

How are my numbers overstated?? My numbers calculated the revenue. The items you listed aren't revenue based; they are costs/overhead, and I've mentioned all of your costs in my post (promotion, operating, tournaments). Please explain how the revenue is overstated...

 

[Drop The Rock]

How are my numbers overstated?? My numbers calculated the revenue. The items you listed aren't revenue based; they are costs/overhead, and I've mentioned all of your costs in my post (promotion, operating, tournaments). Please explain how the revenue is overstated...

Conclusion:

The APA is collecting 42.3 Million Dollars each year and only giving back 1.5 Million Dollars in annual payouts. So basically, the APA has 40.8 Million Dollars left over to pay for their annual overhead costs (operators, tournament setup, advertisement, accounting, lawyers, etc...) and collect the profit. The profit margin is sickening.

Your analysis of what their profit margin is, is overstated. You also have missed on of the major things the APA does, which is pay for the trips and lodging of the top teams from each region.

I should have been more clear that I was referring to this picture that you have painted of their profit margin.

 

[King T]

You have a good point, but...,

I think you make some very good points. If the APA was concerned about Pro Pool then they do have the Money to get involved, but why would they?

1. The Pro Player have not given back very much to amateur play.
2. The Pro Players in this country have not really conducted themselves in a
manner that would allow many of them to be marketed.
I agree that the payouts while large compared to other leagues should be more, but that's business, if the members don't complain the format wont change.

Again you have some good points and I'd love to see it happen, I just don't see a reason for the APA to share the wealth.

 

[Shenanigans]

You need to separate APA corporate and the franchise owners. I believe the APA corporate only receives $2.00 of the match fee. So a rough guess of their revenue using your numbers would be $6,250,000 annual membership fee and $9,000,000 in match revenues. So you are only looking at $15,250,000 total revenue. Then when you minus the costs for the national events, corporate employees salaries, office rental, legal, marketing, taxes and the other thousands of expenses incurred when running a business that profit margin shrinks drastically.

I

 

[King T]

Well thats not right

Conclusion:

The APA is collecting 42.3 Million Dollars each year and only giving back 1.5 Million Dollars in annual payouts. So basically, the APA has 40.8 Million Dollars left over to pay for their annual overhead costs (operators, tournament setup, advertisement, accounting, lawyers, etc...) and collect the profit. The profit margin is sickening.

Your analysis of what their profit margin is, is overstated. You also have missed on of the major things the APA does, which is pay for the trips and lodging of the top teams from each region.

I should have been more clear that I was referring to this picture that you have painted of their profit margin.

The APA is super profitable and theres nothing wrong with wanting them to payout a bigger part of the prize, rather they do it or not has no baring on stating that they could and should based on the money coming from the memebers.

 

[Drop The Rock]

The APA is super profitable and theres nothing wrong with wanting them to payout a bigger part of the prize, rather they do it or not has no baring on stating that they could and should based on the money coming from the memebers.

I'm not debating what the pay out is or what it should be. However, how the money is allocated should remain the way it is unless the pros/a pro organization does something to earn a sponsorship. Sorry but the APA as a corporation may be fairly profitable but one of the bigger LOs here in Houston works two jobs, don't worry.

 

[Flip_dat_Quarta]

You need to separate APA corporate and the franchise owners. I believe the APA corporate only receives $2.00 of the match fee. So a rough guess of their revenue using your numbers would be $6,250,000 annual membership fee and $9,000,000 in match revenues. So you are only looking at $15,250,000 total revenue. Then when you minus the costs for the national events, corporate employees salaries, office rental, legal, marketing, taxes and the other thousands of expenses incurred when running a business that profit margin shrinks drastically.

I

There is no need to distinguish between the two. The Franchise owners aren't excluded from this. They would contribute as well.

 

[Flip_dat_Quarta]

I think you make some very good points. If the APA was concerned about Pro Pool then they do have the Money to get involved, but why would they?

1. The Pro Player have not given back very much to amateur play.
2. The Pro Players in this country have not really conducted themselves in a
manner that would allow many of them to be marketed.
I agree that the payouts while large compared to other leagues should be more, but that's business, if the members don't complain the format wont change.

Again you have some good points and I'd love to see it happen, I just don't see a reason for the APA to share the wealth.

The only reason I see the APA would become involved would be to try to build up the sport of pool as a whole. If you get pro level pool to excel then the leagues will flourish even more than they do now.

Unfortunately, you're right. APA is already making enough money so they are content leaving things right where they are. No need to expand. Maybe if the leagues start failing they will take action. They have a good business plan and it works, I can't blame them.

It's a shame that they are so completely interested in making themselves rich that they could care less about the sport falling apart from the top down.

 

[decent dennis]

A tour was supposed to be the goal when Terry Bell and Larry Hubbart started the Busch League way back when. Then they saw the golden goose.