HAL 12/13 Rd 1 - Newcastle United Jets vs Adelaide United 07/10/11 k/off 3pm AEHT

[hauss]

3000 jerseys at $10 profit for club : $30000
$10 is just a guess but they retail for about $100 and there would be alot of people to pay along the way (i 'm assuming a-league take a cut of this?).

15000 ppl/game, assuming 11000 average without heskey so 4000/game is the "heskey factor".
13 home games = 52 000 extra tickets.
assuming $20 to the club per "attendance" (some will be kids, some will buy food/beer/etc).
52k * 13 = $1000000

so yeah don't think the jerseys will make much difference but 4k extra fans per game is probably about break even.

I would think the profit on those jerseys would be more like $50. The Jets will sell most of them themselves through their supporter store and stadium shops. They will be able to do it cheaper than Rebel with mass production of the Heskey #9 numbering and they give members a discount. So I think around $150k profit on this.

Extra members - to reach 11,000 say an extra 1,500 members at an average of $150 = $225,000

Extra game day sales - 15,000 compared to this years average of 12,000 = 3,000 at $20 = $60,000 x 13 games = $780,000.

This gives a total of $1,155,000.

We don't know how much he is being paid but the Herald say $700,000 and others say $1m.

[toad]

yep sounds about right.

either way, the impact of selling 3000 jerseys (which sounds too high to me anyway) is small compared with getting more people to the game.

[plague]

ok so we might make as much as 50% profit then? anyone have more of an idea about this?

Yes.
They would be working on at least 100% mark up on clothing ie Double what it cost them to buy.

[hauss]

Merchandising is always highly profitable if it's not sitting around as stock in a shop.

That's why most bands handle their own merchandising at concerts, and why Krusty calls it the sweetest plum!

[plague]

Also you would need to deduct the extra on costs having 3000 more people per game brings (security/staff). Plus the $20 food/drink figure per person would have to profit not just turnover.
Eg: Jets don't make $6.50 from each $6.50 beer, they make whatever margin they get so the extra 3000 might only generate a few 'real' dollars per game. I think based on gameday revenue alone it wouldn't cover the cost of Heskey.

BUT

Combined with extra sponsorship/potential TV money (mid-long term I know) and you can see how signing these players can be justified by the bean counters.

[hauss]

Also you would need to deduct the extra on costs having 3000 more people per game brings (security/staff). Plus the $20 per person would have to profit not just turnover.
Eg: Jets don't make $6.50 from each $6.50 beer, they make whatever margin they get so the extra 3000 might only generate a few 'real' dollars per game. I think based on gameday revenue alone it wouldn't cover the cost of Heskey.

BUT

Combined with extra sponsorship/potential TV money (mid-long term I know) and you can see how signing these players can be justified by the bean counters.

$20 would be the profit margin on tickets sales only. An extra 3,000 people would only increase costs significantly if it meant opening extra areas of the stadium. But the Jets already have all sections of the stadium open, so they are already taking a hit by having to staff these areas. To me, any extra staffing would be minimal and would be fully covered by that $20 profit margin. Don't Wests still manage the stadium catering? There is only upside for having extra people buying extra beers because the extra staff pouring beers would be an insignificant cost.

[Grimario]

$20 would be the profit margin on tickets sales only. An extra 3,000 people would only increase costs significantly if it meant opening extra areas of the stadium. But the Jets already have all sections of the stadium open, so they are already taking a hit by having to staff these areas. To me, any extra staffing would be minimal and would be fully covered by that $20 profit margin. Don't Wests still manage the stadium catering? There is only upside for having extra people buying extra beers because the extra staff pouring beers would be an insignificant cost.

But the extra beer sold would have to be paid for out of the beer cost.

You are right though, the overhead costs shouldn't increase as much at the same rate as the increase in customer spend so it's almost all cash in the bank (of Heskey).

[GazFish35]

I'd be thinking the invetsment in both del piero and heskey would be leveraged against increased crowds for the next few seasons. I can't see the impact in one season covering the cost of their contracts.

[plague]

$20 would be the profit margin on tickets sales only. An extra 3,000 people would only increase costs significantly if it meant opening extra areas of the stadium. But the Jets already have all sections of the stadium open, so they are already taking a hit by having to staff these areas. To me, any extra staffing would be minimal and would be fully covered by that $20 profit margin. Don't Wests still manage the stadium catering? There is only upside for having extra people buying extra beers because the extra staff pouring beers would be an insignificant cost.

Without going over the same point my initial statement was that it wasn't just a matter of
1. Sign Heskey
2. More fans
3. ?????????
4. Profit.

You even have to look into the cost of staff going over there to sign him (airfares/rooms) and any extra marketing you've done to promote him being here. There are lots of different areas that all add up and they are direct costs to the club.
All these little things add up and trust me, when you're writing the cheques every dollar counts.
FWIW I agree with the signing and honestly think the club is looking at the big picture. Whether it pays off in year one, two or in 10 years time the club deserves big hoorahs for having a dig.

[hauss]

I'd be thinking the invetsment in both del piero and heskey would be leveraged against increased crowds for the next few seasons. I can't see the impact in one season covering the cost of their contracts.

I would think that they would want to go close to breaking even in the same season. Otherwise it becomes a gamble, like Leeds taking out loans to pay for Rio Ferndinand et al. secured on the future Champions League revenue that they would bring in. It all came crashing down like a house of cards for Leeds. Next year will have its own salary costs to attract fans and it will catch up with the club eventually, like in one season of really bad performances.

But I think you are right in that such a gesture secures memberships because the loyal fans see that the club is willing to secure a big name to round out their squad. But that may just turn game day purchases into memberships. The cream is the bandwagoners and they generally fluctuate based on performance.

Also, we haven't even considered corporate box sales. The club generally doesn't publicise how these sales go but you would expect a jump based on names like Heskey and Del Piero playing in your stadium.

[De-Champ]

By examing the various revenue streams available and using publicly available information. It's not that hard.

Well you better do your sums again. Depending on who you believe, the club lost anywhere between $3 - $5 million last year. So the extra 5,000 people that you are talking about, together with merchandise sales will nto be breakeven, nowhere near it, particularlry when you add the $1m or thereabouts for Heskey.

[hauss]

Well you better do your sums again. Depending on who you believe, the club lost anywhere between $3 - $5 million last year. So the extra 5,000 people that you are talking about, together with merchandise sales will nto be breakeven, nowhere near it, particularlry when you add the $1m or thereabouts for Heskey.

Whatever mate. I'm talking about breaking even on the salary cost of a maquee player, not the break even on the club as a whole.

[De-Champ]

Whatever mate. I'm talking about breaking even on the salary cost of a maquee player, not the break even on the club as a whole.

Even so you will still need more than 5,000, as you are assuming all the "extra" 5,000 are paying customers. I do not know if a 10 year old kid pays to get in, or a 7 year old for example, so to get 5,000 paying customers you may need an extra 6,000 - 8,000 thru' the gate, who knows.

[Grunta]

Even so you will still need more than 5,000, as you are assuming all the "extra" 5,000 are paying customers. I do not know if a 10 year old kid pays to get in, or a 7 year old for example, so to get 5,000 paying customers you may need an extra 6,000 - 8,000 thru' the gate, who knows.

Lower profit margins on these would be made up on the income from the food their parents have to buy. What is it? $20 for a pie, chips and a can of coke

[hauss]

Even so you will still need more than 5,000, as you are assuming all the "extra" 5,000 are paying customers. I do not know if a 10 year old kid pays to get in, or a 7 year old for example, so to get 5,000 paying customers you may need an extra 6,000 - 8,000 thru' the gate, who knows.

On the Pro-ticket site everyone above the age of 5 has to pay.

But it's interesting that their pricing for the tickets - the western stand is $35 and everywhere else is $22 for an adult for each and every game.

This is just scandalously low for the Sydney FC games. So maybe the Jets are banking on huge interest in Heskey because you are right, average crowds of 15,000 won't break even for him at these prices. Average profit margin would probably only be about $12. So an extra 3000 people would only bring in $470k, not $780k.

Maybe last year's strategy of low memberships and high match day ticket pricing, and that fact that crowds were only marginally higher than membership numbers affected their pricing strategy. Maybe they want 20,000 crowds.

Still, I would have thought that they would have charged more for the Sydney FC games. That's like rewarding the bandwagoners for staying away.

[plague]

I don't think the A-League is in any position to start charging a premium for marquee games.
Imagine the can of worms if you charged extra for a Syd game then Del Piero pulled out the day before or something.
There's already talk of him missing the first match in NZ despite the public showing unprecedented interest.

If Syd are sitting him in order to maximize their own value of him 'debuting' against us at home then thats pretty petty.
If he's not ready then no problem, hopefully the boffins at FFA are reminding the clubs of their responsibility to the game as a whole.

[Pico]

You also have to remember that HSG's strategy from the start was to have large crowds, with cheap memberships subsidised by the corporate sales. A signing like Heskey could very well help to push these corporate sales even higher.

As for the club breaking even, it really depends on the start up cost of the club, then you also have the chance for some of those costs to be absorbed and spread over both clubs now that they are fully merged admin staff and lets face it those figures only came out when the whole hand back the license was happening can they really be trusted as 100% truth, or just greater leverage.

[GazFish35]

How much is heskey charging for an autograph or photo op?
Maybe that's where they plan to rake in the coin.













Toungue firmly in cheek.

[Chadandkira12]

When they saud they handed back the licence the supporter gear went for half price I bought another jersey for $50 & I doubt they would of lost money on that they wouldnt sell them for below cost hes lost enough cash on the horses

[OmeletteDuFromage]

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