APA Cost Analysis vs Pro Tour

[PocketPooler]

Giving the APA the benefit of the doubt, the average team has 9 players. Two that fail to show up after the second week because they realize the APA sucks. And seven somewhat regular players that stick it through all season. From that, I would think since only 5 out of the 7 play and pay dues, the $43 million goes down to a measly $30 million. With $1.5 million in payouts thats equates to a 5% payout. Pretty shady...

On the other hand, without even factoring the payouts and millions spent on the advertising alone, factor in lets say 10 leagues per state (Average) on the HIGH end so that would make for 5000 leagues and operators.

30 million over 5000 leagues=$60000 per league. If thinking on the low end, that $60K may turn into $80K-$90K. Factor in expense for the teams to go to Vegas, pins and other silly expenses and what not, and it doesnt seem to be as big of a racket as i initially thought. Even if only averaging 5 leagues per state which is probably more realistic, that still only yields $120K per League Operator before payouts and all the airfare, hotels and meals to Vegas. Plus gas and mileage driving to all the venues multiple times per week, etc. Not nearly as bad i initially thought by these numbers...

And i am the furthest thing from an APA advocate, that's for sure!

But.... I would sure like to have a piece of that pie for the little work that gets done.

 

[Flip_dat_Quarta]

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 profit margin IS sickening! Anyone with half a brain can figure out a plan to pay all of their bills and still have 15-20 Million left. Look at all of the awards on their website: http://www.poolplayers.com/franchise/honors/

They only give you those awards if you're making insane amounts of money. Surely you can't argue that...

 

[Flip_dat_Quarta]

Giving the APA the benefit of the doubt, the average team has 9 players. Two that fail to show up after the second week because they realize the APA sucks. And seven somewhat regular players that stick it through all season. From that, I would think since only 5 out of the 7 play and pay dues, the $43 million goes down to a measly $30 million. With $1.5 million in payouts thats equates to a 5% payout. Pretty shady...

On the other hand, without even factoring the payouts and millions spent on the advertising alone, factor in lets say 10 leagues per state (Average) on the HIGH end so that would make for 5000 leagues and operators.

30 million over 5000 leagues=$60000 per league. If thinking on the low end, that $60K may turn into $80K-$90K. Factor in expense for the teams to go to Vegas, pins and other silly expenses and what not, and it doesnt seem to be as big of a racket as i initially thought. Even if only averaging 5 leagues per state which is probably more realistic, that still only yields $120K per League Operator before payouts and all the airfare, hotels and meals to Vegas. Plus gas and mileage driving to all the venues multiple times per week, etc. Not nearly as bad i initially thought by these numbers...

I only included the fees for half of the members. So if 5 out of 9 play, that's more than half. So I actually already conservatively accounted for this.

You also have to consider that many players play on 2 or 3 different teams, this is not taken into account. I also only included 30 weeks in the calcs. This does not include the summer league which is another 10 weeks. There is also a discrepancy on their website. One paragraph says 250,000 members, another paragraph says 270,000 members. I've only included weekly fees for 125,000. Very conservative.

Their website also says there are only 300 leagues so you're estimate of 5000 leagues is way off which is making your numbers look small.

Using your 30 Million divided by 300 leagues = 100k per league.

 

[jojopiff]

The profit margin IS sickening! Anyone with half a brain can figure out a plan to pay all of their bills and still have 15-20 Million left. Look at all of the awards on their website: http://www.poolplayers.com/franchise/honors/

They only give you those awards if you're making insane amounts of money. Surely you can't argue that...

You continue to skip over the part where you're math is being corrected.

The $8 a week isn't going to corporate. I said I didn't know but another person said they get around $2 so immediately your $36 mil from weekly dues goes from $36 mil to $9 mil (or so). and their, evidently ghastly, profit drops from $40+ mil down to we'll call it $15 mil. But wait, there's more...

Are you of the opinion that the APA corporate is a 1 man operation out of his house? I'm not, so there's going to be payroll (and all the stuff that goes with that, matching taxes, workers comp, etc) and a building they have to pay rent/mortgage on. I'm not going to toss a number out but I'd venture to say at least 10 employees with pay and benefits isn't cheap.

Surely, you can't argue that...

 

[nine_ball6970]

Giving the APA the benefit of the doubt, the average team has 9 players. Two that fail to show up after the second week because they realize the APA sucks. And seven somewhat regular players that stick it through all season. From that, I would think since only 5 out of the 7 play and pay dues, the $43 million goes down to a measly $30 million. With $1.5 million in payouts thats equates to a 5% payout. Pretty shady...

On the other hand, without even factoring the payouts and millions spent on the advertising alone, factor in lets say 10 leagues per state (Average) on the HIGH end so that would make for 5000 leagues and operators.

30 million over 5000 leagues=$60000 per league. If thinking on the low end, that $60K may turn into $80K-$90K. Factor in expense for the teams to go to Vegas, pins and other silly expenses and what not, and it doesnt seem to be as big of a racket as i initially thought. Even if only averaging 5 leagues per state which is probably more realistic, that still only yields $120K per League Operator before payouts and all the airfare, hotels and meals to Vegas. Plus gas and mileage driving to all the venues multiple times per week, etc. Not nearly as bad i initially thought by these numbers...

And i am the furthest thing from an APA advocate, that's for sure!

But.... I would sure like to have a piece of that pie for the little work that gets done.

For the little work that gets done. Thanks for the laugh.

It is easier to herd cats than it is to get pool players to do anything. Getting players to show up for something on a regular basis is very time consuming. Then you get all of the questions, complaints, and conflicts and it can easily turn into a full time job. Not to mention the league operators have a day job as well. If being a league operator was so profitable, more people would want to do it and it wouldn't be a second job.

 

[Flip_dat_Quarta]

You continue to skip over the part where you're math is being corrected.

The $8 a week isn't going to corporate. I said I didn't know but another person said they get around $2 so immediately your $36 mil from weekly dues goes from $36 mil to $9 mil (or so). and their, evidently ghastly, profit drops from $40+ mil down to we'll call it $15 mil. But wait, there's more...

Are you of the opinion that the APA corporate is a 1 man operation out of his house? I'm not, so there's going to be payroll (and all the stuff that goes with that, matching taxes, workers comp, etc) and a building they have to pay rent/mortgage on. I'm not going to toss a number out but I'd venture to say at least 10 employees with pay and benefits isn't cheap.

Surely, you can't argue that...

As I said before, franchise owners aren't excluded from supporting the pro tour. They need to contribute to this as well.

 

[Flip_dat_Quarta]

For the little work that gets done. Thanks for the laugh.

It is easier to herd cats than it is to get pool players to do anything. Getting players to show up for something on a regular basis is very time consuming. Then you get all of the questions, complaints, and conflicts and it can easily turn into a full time job. Not to mention the league operators have a day job as well. If being a league operator was so profitable, more people would want to do it and it wouldn't be a second job.

Those calcs are extremely flawed. See my post above.

 

[Prince H]

The profit margin IS sickening!

You might be surprised how quickly the expense side of the P&L can stack up. Conclusions about profitability shouldn't be made with a back-of-the-napkin calculation of just the revenue side.:grin-square:

 

[Poolplaya9]

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!

The profit margin of the APA isn't even remotely close to what you suggest mostly because you left out tons of their expenses. But regardless of what their profit margin is:

-Who are you to tell somebody else how much money they should be able to make or at what profit margins if they are doing it legally and honestly? If you had a business I'm sure you wouldn't want anyone else telling you that you were only allowed to make X amount or could only have Y margins. No, you would feel entitled to be able to earn whatever the free market allowed you to earn legally and honestly and you would feel entitled to be able to keep whatever you had earned too--and very rightly so. Same thing with your salary for your job. What if someone wanted to mandate that you can only earn X amount for your type of occupation and no more than that because anything more than that was excessive margin or income for the provided services? What if they decided someone in your occupation should only earn $20,000 a year and not a penny more and if you earn anything over that you should have to give it away? I can assure you that you would not feel that anyone else has a right to decide what you should earn if you are earning it legitimately in a free market. So why do you feel that you have a right to determine what others should earn?

-I can also assure you that you would not be ok with anyone telling you what you should have to do with your money either (whether that money came from a business, a job, investment, or anything else). It wouldn't matter to you if they told you that you that you had to support pro pool with it or anything else they might tell you that you should do with your money. Where they told you that you had to spend the money doesn't matter. You feel you have a right to spend your money that you earned in any way you want to. So why don't you believe that everybody else has this same right to spend their money the way that they want to also just like you feel you should have a right to do? Why do you feel that you have some right to tell others how they should spend their money or that you should have any say in it when you don't feel anyone else has a right to do the same to you?

-You argue that if the APA would invest money in pro pool etc that it would be a good investment and over time they would end up making more money back in the long run due to more people being involved in pool etc. I strongly disagree that it would be a good investment for them, and they apparently disagree with you on that as well. But whether you are right or wrong, it goes back to their having a right to do what they want with their money. Just because it is a good investment doesn't mean they should have to do it. What if I told you that you had to invest $30,000 in X stock because it was a good investment and it would make you money? Well you may not agree with me and may not believe that may not believe X stock is a good investment and you feel you have a right to make your investments on your own beliefs and not on somebody else's beliefs. But even if you thought I was right, that X stock was a good investment, you still wouldn't want someone telling you that you had to do it. Maybe there are other things you would rather do with that $30,000, which goes back to the point above. You feel you have a right to do what you want with your money. I agree, but yet you don't seem to feel anyone else has the same rights as you do.

Nobody should be able to tell you how much you can earn, or what you should have to spend that earned money on, but that right isn't just for you. It is for everybody. You have no right to feel that you should have some say so in what somebody else earns, or how they spend their money.

 

[jojopiff]

LOL. Okay so this isn't an attempt at a logical discussion. It's "everyone pays into the pot no matter how much or little you make." There's for sure 4-6 LO's in Colorado. So if we were to assume there are at least that many x50 states, that's 250 people. So, if these thieves are making the other $27 million that's $108,000 per year as their job. So, what's the figure that you arbitrarily set as "making too much profit & need to give to the pros?"

For the record, I do not believe all the LO's make this much.

 

[nine_ball6970]

Those calcs are extremely flawed. See my post above.

I have seen your posts and you are way off base with all of your numbers.

I typed out a rather lengthy post going line by line showing how far off your calculations are but then figured why even bother. It has been said many times before but you will believe what you want to believe.

The figure of $2 from each match played going to National Office makes more sense.

The only number you can use with any confidence is the $25 annual dues.

The league operators pay out a healthy chunk of the fees collected. My old LO qualified 4 teams for Nationals. That's probably 10k paid out right there. Then there are cash payouts for the Tri Cups, etc. The 100k gross you are claiming for a LO might net 30-40k.

 

[Drop The Rock]

As I said before, franchise owners aren't excluded from supporting the pro tour. They need to contribute to this as well.

"need" to? They don't need to do anything, nor could they probably afford to. People are allowed to make a living and allowed to live comfortably.

Corporate gets the yearly dues and $2.50 of the weekly. They also get the bill for the 5 major events + the prize money. The franchise gets the rest of the weekly dues and is responsible for everything else. The APA as a corporation makes their money selling franchises, the LOs make money from the players.

Sorry, but if they were making it hand over fist, they wouldn't need a second job or have to run multiple leagues out of multiple rooms and work themselves to death like the LO does here.

 

[PocketPooler]

I only included the fees for half of the members. So if 5 out of 9 play, that's more than half. So I actually already conservatively accounted for this.

You also have to consider that many players play on 2 or 3 different teams, this is not taken into account. I also only included 30 weeks in the calcs. This does not include the summer league which is another 10 weeks. There is also a discrepancy on their website. One paragraph says 250,000 members, another paragraph says 270,000 members. I've only included weekly fees for 125,000. Very conservative.

Their website also says there are only 300 leagues so you're estimate of 5000 leagues is way off which is making your numbers look small.

Using your 30 Million divided by 300 leagues = 100k per league.

Wanna go in halves on a league?

 

[JoeyM]

There is interesting info out there if you look for it:

Franchises typically start out of the home and are commonly mom-and-pop type franchises. As they grow, bigger ones require offices and employees, but they are all small businesses. The largest franchisee, Terry Justice out of Baltimore, has 1,750 teams and a staff of 12 full-time workers, 22 people overall. His franchise is considered extraordinary not just because he has roughly 700 more teams than anybody else but because his company offers its workers health insurance.

A league operator can make a good living doing this, but it takes work. “It’s not a get-rich-quick operation,” said Justice. Yet, he added, “it can be lucrative if it’s run professionally.” Revenues depend on the number of teams a franchise can sign up. Teams pay between $25 and $50 per week to play, depending on the franchise. Thus, revenues depend on the number of teams a franchise can recruit—and thus potential revenue depends on the size of the market.

Funds are set aside for franchise fees, awards, tournaments and travel costs for the franchise’s teams to go to Las Vegas for the annual national tournament. If a franchise with 100 teams has $15 per team each week left over after all of its fees and expenses, a 40-week season could yield $60,000 in profit.

Blanski started his franchise in 2002, the same year he got married. Any profits his franchise earned during its first two years were pumped back into the company, he said, requiring his wife, Kerry, to keep her job in the mortgage business. With 114 teams the franchise now stands on its own. “If it wasn’t for (Kerry), I wouldn’t be here talking with you,” Blanski said.

So this business owner makes about $60k a year and you want him give up a portion of his income for Pro Pool? Hell, I make more than $60k a year at my job without the headaches this guy has. I wouldn't give a penny to pro pool players.

Justice may make a crap load more than Blanski, but his expenses with employees and health care are also much much higher.

I don't care if each franchisee owner makes eleventy billion dollars a year in profit. They are private business owners and don't need to give a penny of their money to anybody else for any reason.

 

[Flip_dat_Quarta]

The profit margin of the APA isn't even remotely close to what you suggest mostly because you left out tons of their expenses. But regardless of what their profit margin is:

-Who are you to tell somebody else how much money they should be able to make or at what profit margins if they are doing it legally and honestly? If you had a business I'm sure you wouldn't want anyone else telling you that you were only allowed to make X amount or could only have Y margins. No, you would feel entitled to be able to earn whatever the free market allowed you to earn legally and honestly and you would feel entitled to be able to keep whatever you had earned too--and very rightly so. Same thing with your salary for your job. What if someone wanted to mandate that you can only earn X amount for your type of occupation and no more than that because anything more than that was excessive margin or income for the provided services? What if they decided someone in your occupation should only earn $20,000 a year and not a penny more and if you earn anything over that you should have to give it away? I can assure you that you would not feel that anyone else has a right to decide what you should earn if you are earning it legitimately in a free market. So why do you feel that you have a right to determine what others should earn?

-I can also assure you that you would not be ok with anyone telling you what you should have to do with your money either (whether that money came from a business, a job, investment, or anything else). It wouldn't matter to you if they told you that you that you had to support pro pool with it or anything else they might tell you that you should do with your money. Where they told you that you had to spend the money doesn't matter. You feel you have a right to spend your money that you earned in any way you want to. So why don't you believe that everybody else has this same right to spend their money the way that they want to also just like you feel you should have a right to do? Why do you feel that you have some right to tell others how they should spend their money or that you should have any say in it when you don't feel anyone else has a right to do the same to you?

-You argue that if the APA would invest money in pro pool etc that it would be a good investment and over time they would end up making more money back in the long run due to more people being involved in pool etc. I strongly disagree that it would be a good investment for them, and they apparently disagree with you on that as well. But whether you are right or wrong, it goes back to their having a right to do what they want with their money. Just because it is a good investment doesn't mean they should have to do it. What if I told you that you had to invest $30,000 in X stock because it was a good investment and it would make you money? Well you may not agree with me and may not believe that may not believe X stock is a good investment and you feel you have a right to make your investments on your own beliefs and not on somebody else's beliefs. But even if you thought I was right, that X stock was a good investment, you still wouldn't want someone telling you that you had to do it. Maybe there are other things you would rather do with that $30,000, which goes back to the point above. You feel you have a right to do what you want with your money. I agree, but yet you don't seem to feel anyone else has the same rights as you do.

Nobody should be able to tell you how much you can earn, or what you should have to spend that earned money on, but that right isn't just for you. It is for everybody. You have no right to feel that you should have some say so in what somebody else earns, or how they spend their money.

I agree completely.

 

[Skippy27]

I think you are greatly under estimating their expenses.

Depending on fee structure the LO's pay about $2.50 per player back to the APA. So in an area like mine, LO's get about $4.50 and the APA gets about $2.50.(really my area they get it all as they own it)

How much do you think it cost them to rent the WestGate per year?
All those tables and lights along with having them setup and broke down multiple times a year? Even if they own the tables outright (which I suspect they do), they have storage fees associated with them and a few hundred tables and lights take up quite a bit of space.

I believe someone mentioned the shared travel expenses, but I believe that comes from the local level league fees and board entry fees.

A guy just came through not to long ago and told me what he paid for a franchise he just bought and was headed to the main office to finalize on. Those things are not as cheap as you think they are, especially in an established area that you pay per player for the franchise.

 

[KMRUNOUT]

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...

Your numbers are WAY off. The APA does not collect dues directly. The individual league operators do. They then pay a *small* percentage of those dues to the APA corporate. No offense, but completely uninformed stuff like this is what I find sickening. You should avoid going into business at all costs. Real life doesn't leave out a HUGE part of the equation.

This is something you should have researched a little bit before deciding to spread gross misinformation.

KMRUNOUT

 

[Flip_dat_Quarta]

"need" to? They don't need to do anything, nor could they probably afford to. People are allowed to make a living and allowed to live comfortably.

Corporate gets the yearly dues and $2.50 of the weekly. They also get the bill for the 5 major events + the prize money. The franchise gets the rest of the weekly dues and is responsible for everything else. The APA as a corporation makes their money selling franchises, the LOs make money from the players.

Sorry, but if they were making it hand over fist, they wouldn't need a second job or have to run multiple leagues out of multiple rooms and work themselves to death like the LO does here.

Sorry, I mispoke. No one needs to do anything. What I was trying to say is that they would be involved as well if APA decided to take on the pro tour. The corporation would require it from the franchise owners.

 

[KMRUNOUT]

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...

They are not overstated. They are flat out wrong. You have no idea how the APA business model works. Like I said, you need to do some research.

KMRUNOUT

 

[BryanB]

I've been playing in our local APA for 3-4 years. We have a fairly large league here. I'm pretty sure I'm one of maybe 10 people within the league that ventures out to play bigger tournaments or for that matter, can even spell professional pool player. 95% (or higher) of APA players would have no desire to have any of their money going towards something they have no interest in