SELLING WITH SMARTS TO BOOST YOUR BOTTOM LINE

During the months ahead as I plow myself deeper into the minor league baseball franchise that my partners just recently purchased, most of my next batch of postings are going to be centered around my findings and experiences.

Know that I apologize deeply for my silence of late. Combining the baseball beat with the ongoing hockey season right now has my attention locked up. In some ways, if you are just developing your career or entering a start-up position with a sports franchise, hopefully the words and feedback that I am to share in the near future will be most helpful.

Since walking into the baseball office, most of my time has been spent delving into the active sponsorship contracts left behind from our previous regime and developing a business plan to recruit new partners. One of the mistakes some team's make is to sell a NUMBER versus defining what is NET or GROSS to the client. We write up our hockey packages as a "Net" billing.

Here's an example of a contract that I recently uncovered. The package states that the prospective client is to receive an outfield fence sign, a giveway item provided by the club (that says TBD versus item stated), a pair of season tickets, a company group outing as well as 200 tickets that are to be donated to a charity cause on behalf of the client.

First HUGE mistake. The contract was not identified as "Gross" or "Net". Sadly, the signee of the contract was an Advertising Agency. My heart sunk. I knew in a split second that this would be a GROSS buy in their eyes. Since the club rep didn't specify that his asking price was NET and built the agency commission (usually 15%) up above the team's price, this was going to be a 15% reduction off the signature line. When I made the call to the agency to review this contract, sure enough, my fear came to fruition. It is to be a "Gross Billing" by the club to the client. The previous sales rep just cost his club a chunk of profit. A reckless mistake.

What makes this package even more dangeous on top of the billing issue is the inclusion of a TBD game night promotional item! What if the client now says they want a Baseball Bat or an expensive Ball Cap? A Fleece Blanket? In this agreement there was no language that says it's the "club's call for what item will be ordered?" The package should have stated what the promotional item will be but more so the club rep needs to know exactly what the cost is plus tax, freight and art charges so that you are covering all expenses to the club plus profit mark-up.

When breaking down a sponsorship package, look at each category as it's own "department". You should establish revenue projections for signage, print, radio broadcast, promotion, etc. and then make sure you are made aware of your costs. Example: you just sold a seasonal pocket schedule that costs the club $8,000; yet, your team effort generated just $7K in ad sales. This particular "department" needs to operate as a "profit center" not as a loss leader.

Jim Loria, Career Planning Expert for Sports Professionals
Email address: loria@sfstampede.com