August 9, 2012 by Charlie Eisenhood in Analysis, Featured, News with 5 comments
On the eve of the American Ultimate Disc League’s inaugural Championship between the Philadelphia Spinners and the Indianapolis Alleycats, new information about the game’s funding raises more questions about the financial viability of the young league.
Over a year ago, the AUDL front office began planning the championship game in Detroit’s Silverdome. At the time, the plan was to “divide the profits of the game into 25 shares” at $1,000 a piece (with the teams in the game, the league, and the host team getting some free shares to cover travel costs, marketing, etc.), but that assumed a 16-team league that did not materialize.
Ultimately, the league sold $1,000 shares to five teams as Brent Steepe, the AUDL Vice President of Marketing and the owner of the Detroit franchise, sold additional shares of $1,000 and $2,500 to outside investors. The league raised $22,000 to cover the costs of the $5,000 down payment on the Silverdome, marketing, and other pre-gameday expenses.
But two of those shares have been returned. The Indianapolis and Connecticut franchise owners both requested their investment be refunded. Bryan Ricci, the owner of the Connecticut Constitution, explained why. “In our discussions about the $22000 they had in the pool during one of our conference calls, we learned that the league had used some of that money to pay other league expenses,” he said. “And although as an organization they have the right to do that, I objected to the use of the funds.”
He added, “Based on what I had seen from the league all through the season, based on what they were telling us they were going to do, I just didn’t see how this championship game could make money.”
In the proposal given to teams, the league front office suggested they might make profits of $100,000 from the game, based on “ticket sales of 10,000 at $15” less costs. They added, “We can start selling the event now and truly plan on filling the stadium with much more than 10,000 fans…With enough time to marketing [sic] the event, we could potentially put 40k+ fans in the seats and make everybody a lot of money in the process.”
It appears, however, that the attendance will be nowhere near either of those marks. Steepe told teams on a conference call this week that he had sold 180 tickets so far.
Inquiries on the Silverdome’s ticket sales website show that very few — and possibly no — tickets have been sold to the general public. According to league sources, the first nine rows of the available seating sections were reserved by the league to sell separately. Attempting to buy 30 of the best available seats together on the Silverdome website gives you seats 2-31 in row 10 of the midfield section, suggesting very low ticket sales.
Additionally, the Indianapolis Alleycats were selling $55 tickets for a bus trip from Indy to Detroit with game admission included, but had to cancel due to insufficient interest.
Players and owners suggested weeks ago that the Championship be held in Philadelphia, where the Spinners franchise has proven they can draw big crowds and the cost of a venue would be less. However, because the Silverdome was rented back in 2011, cancellation costs deterred the league from changing the locale.
If the league does not generate $20,000 in revenue from the game this weekend, the investors will lose the difference. If they make more, the profits will be split equally among the shareholders.