End of the road for pros?
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Chris, as you know mate, I talk to a lot of people in the industry, and I mean a lot.
Now, either I am to believe them or I am to believe you.
They tell me one of the major reasons they are pulling back on sponsorship deals is because they are now having to be more accountable because of a downturn in surplus monies.
This tends to suggest that contracting sales is in fact one of the reasons for this reassessment.
Chris, what sometimes seems like a plausible factor, whilst in the theoretic stage, is sometimes not the practical solution.
This is one such case mate, I'm afraid your theory just doesn't stack up with what I am being told by the people at the sharp end and if you wish me to name the people I will do so in a pm, no problem.
You should believe me. I'm not saying that people in the industry are not blaming a contraction in sales, what I'm saying is that's not the real problem, and if people want to understand what the real problem is, they have to look below the superficial answer.
Plus, what do you expect them to say? "We're not sponsoring you because we've suffered a contraction in business", or "We're not sponsoring you because sponsoring a Pro team is a waste of money and has been all along." One of those makes it look like the teams are a victim of circumstance, and the other is mildly insulting and makes the company owners look somewhat silly for spending the money that long.
Like you, I also talk to people in the industry. I would also hazard a guess that I talk to the sponsorship-centric people in the industry more often than you do. For example, at a recent national event, I had the person in charge of sponsorship for one of the major manufacturers/distributors approach me and want to get involved in one of the things I was doing - provided that we could find a way to show a return on that investment. He specifically told me that whereas he used to be able to hand out sponsorship based on whatever he thought was the best thing to do, he now had to account for the expected return on every sponsor expense, down to giving out tshirts.
This change would have occurred regardless of whether the business was good or not. These corporate guys look at the budget, see that you're spending hundreds of thousands of dollars on a team, and they say 'How is this expense justified?' and you better have an answer. If you can't justify it, it gets pulled from the budget - REGARDLESS of overall sales.
Let me go back to what you said. I think you might realize that it's really not far off from what I'm saying.
Emphasis added by me.
I want to look at both of those statements separately, and what they mean below the surface.
On the first statement, you can see here that people are having to be more accountable. Because the decrease in pro team sponsorship apparently coincides with a reduction in business (although I think you'll find that some businesses have not yet seen a decline at all), people make the connection that the two must be connected. But the reduction in pro team sponsorship *ALSO* coincides with a lot of the sponsors being bought out/managed by corporate people instead of paintball people. But no one seems to think that is the cause - why? I think it most certainly is. At best, you can say people didn't have to be accountable before because there was so much extra money floating around they could run their business in a very crappy manner and not go bankrupt, but that's a pretty poor basis for expecting sponsorship.
On the second statement - if teams are not being sponsored now because of a lack of SURPLUS money, that means that the only reason they were being sponsored before is because there WAS surplus money. Which proves my point - teams were not getting sponsored before because it was a GOOD INVESTMENT, they were ONLY getting sponsored because the companies had money to THROW AWAY ON PRO TEAMS, *AND* had people running the companies who were WILLING to throw that money away (or viewed it as a hobby expense).
So, if your team is sponsored because you happen to be in an industry where the current people in charge are raking in money and willing to dump money into your team EVEN THOUGH your team doesn't make a return on investment, and you expect that situation to continue indefinitely, and your continued existence depends on the situation staying the same, the only person at fault when the situation changes is you. A wise team would have taken action so that when the situation inevitably changed, your team would continue to be sponsored because, like Dynasty, you had taken steps to make your team valuable because for every dollar spent on them, their sponsors get back even more.
I think you're talking to the wrong people. Ask the corporate guys who have been buying up the paintball companies and cutting the sponsorship budgets why they're doing it. It's not sales. It's because the teams are not worth the money spent on them.
Condensed version:
- Business people do not spend business money on something unless it is going to make them more money.
- Most pro teams do not make the sponsor more money than the sponsor spends on them.
- Most paintball companies that used to be run by people who got into business to pay for playing paintball are now run by people who got into the paintball business to make more money.
- Most pro teams are going to lose their sponsorship, regardless of whether sales go up or down, because they don't make more money for the sponsor.
If sales go up, you sponsor valuable teams because they will get you more business. And if sales go down, you *STILL* sponsor valuable teams, because they will get you more business! So, if you're not getting sponsored, it is NOT because of the sales, it's because you don't bring value to the sponsorship!
Make sense
Actuelly Chicago is making sense, I belive that is a accurate point of view.
If the company is making a profit by sponsoring team A they will keep doing that regardless if there overall sales are up or down.
And if they are losing money on it they will stop doing that regardless of the overall sales. And now when more paintball companys are being bought by more "buisness oriented" companys this formula will be used.
Magued
Actuelly Chicago is making sense, I belive that is a accurate point of view.
If the company is making a profit by sponsoring team A they will keep doing that regardless if there overall sales are up or down.
And if they are losing money on it they will stop doing that regardless of the overall sales. And now when more paintball companys are being bought by more "buisness oriented" companys this formula will be used.
Magued
Both of you are missing my point, and Chris, you need to seriously think about what you are doing (and saying) because you are falling foul of aping cockdwarf (no disrespect intended here (toward you)).
I ask a simple question and he used to respond with 10,000 words of what can only be described as 'padding' that enveloped a misguided point and this behaviour was repeated ad absurdium because he was so arrogant in thinking he was right.
My points of reference aren't just myself, they are THE people who make the decisions within our industry.
Chris my point is, some of what you say is OK but in NO way are you gonna tell me the contraction is not having some effect because if I have to entertain that idea, even for a millisecond, I have to disregard the vast majority of what I have been told by people, a lot better placed than you, me or Magued.
Now you can respond to what I have just said in cokdwarfian style again if you so choose but the fact remains, the people who count in this industry are, to a man (who I have spoken to), quoting a downturn in sponsorship bought about to some degree by the financial contraction.
You denied any such effect and I'm afraid that is just not true.
You both have forgotten one major thing, I'm afraid the prevoius arrangement most pro teams enjoyed was not an emergent property of any rational analysis done on Return Of Investment, it was done, for the most part, because they thought they had to.
It was a misguided premise, and one that, to some extent, still prevails.
I ask a simple question and he used to respond with 10,000 words of what can only be described as 'padding' that enveloped a misguided point and this behaviour was repeated ad absurdium because he was so arrogant in thinking he was right.
My points of reference aren't just myself, they are THE people who make the decisions within our industry.
Chris my point is, some of what you say is OK but in NO way are you gonna tell me the contraction is not having some effect because if I have to entertain that idea, even for a millisecond, I have to disregard the vast majority of what I have been told by people, a lot better placed than you, me or Magued.
Now you can respond to what I have just said in cokdwarfian style again if you so choose but the fact remains, the people who count in this industry are, to a man (who I have spoken to), quoting a downturn in sponsorship bought about to some degree by the financial contraction.
You denied any such effect and I'm afraid that is just not true.
You both have forgotten one major thing, I'm afraid the prevoius arrangement most pro teams enjoyed was not an emergent property of any rational analysis done on Return Of Investment, it was done, for the most part, because they thought they had to.
It was a misguided premise, and one that, to some extent, still prevails.
For what it's worth, I think you're both right, but you're talking about slightly different things.
The reason why these guys are looking at ROI on sponsorships is the downturn (for all companies not being/been taken over by accountants). This has somewhat focussed the minds on what expenditures they have at a time of reduced income.
However, Chris is right that this in itself is not the reason for the actual decision to cut/keep a team, that's down to measurable ROI.
If you have lots of money you don't care so much about the ROI, as they haven't in years passed, and so the downturn has started this rationalisation. But, if Pros were "worth" it, they wouldn't have anything to worry about and the cost cuts would be made elsewhere in infrastructure, warehousing, staffing, etc.
So - you're both right
The reason why these guys are looking at ROI on sponsorships is the downturn (for all companies not being/been taken over by accountants). This has somewhat focussed the minds on what expenditures they have at a time of reduced income.
However, Chris is right that this in itself is not the reason for the actual decision to cut/keep a team, that's down to measurable ROI.
If you have lots of money you don't care so much about the ROI, as they haven't in years passed, and so the downturn has started this rationalisation. But, if Pros were "worth" it, they wouldn't have anything to worry about and the cost cuts would be made elsewhere in infrastructure, warehousing, staffing, etc.
So - you're both right
For what it's worth, I think you're both right, but you're talking about slightly different things.
The reason why these guys are looking at ROI on sponsorships is the downturn (for all companies not being/been taken over by accountants). This has somewhat focussed the minds on what expenditures they have at a time of reduced income.
However, Chris is right that this in itself is not the reason for the actual decision to cut/keep a team, that's down to measurable ROI.
If you have lots of money you don't care so much about the ROI, as they haven't in years passed, and so the downturn has started this rationalisation. But, if Pros were "worth" it, they wouldn't have anything to worry about and the cost cuts would be made elsewhere in infrastructure, warehousing, staffing, etc.
So - you're both right
If this is the case then Chris needs to clarify the following statement he made :-
'I think there are four things at work. I think none of them are contracting sales'.
If he does, then no problem; if he doesn't then I'm afraid he's got problems
I don't think contracting sales has anything to do with it because:
If the sales contracted, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
If the sales stayed the same, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
If the sales increased, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
That's why the sales contraction isn't the cause of the sponsorship reduction - it was going to happen regardless of sales levels.
If the sales contracted, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
If the sales stayed the same, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
If the sales increased, the new business-minded owners of paintball companies would cut team sponsorship because the ROI isn't justified.
That's why the sales contraction isn't the cause of the sponsorship reduction - it was going to happen regardless of sales levels.
yes
Pete and Chris is both right. The contracing sales would have an effect as buisnesses tend to look closer to costs when sales are down and something need to be cut down. And they have in this case. I think that Chicagos argument is that it shouldnt beacuse only profitable sponsorship should be signed, and that havent been the case.
Magued
Pete and Chris is both right. The contracing sales would have an effect as buisnesses tend to look closer to costs when sales are down and something need to be cut down. And they have in this case. I think that Chicagos argument is that it shouldnt beacuse only profitable sponsorship should be signed, and that havent been the case.
Magued
Once again Chris, you seem to be missing my point and I am not going to repeat it for fear of this descending...let's just leave it where we agree to differ.