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Arena expansion strategy

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239972.31 in reply to 239972.24
Date: 4/16/2013 7:00:26 AM
Woodbridge Wreckers
DBA Pro A
Overall Posts Rated:
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Building bleachers if you're in a low division is best I think, since you'll be at the top of your division (even if you don't promote I assume). I always check what prices you can ask to fill your seats; the ones that can handle the highest price compared to the base price is best to build (most return for the cost).

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239972.33 in reply to 239972.31
Date: 4/16/2013 9:10:46 AM
Overall Posts Rated:
129129
Woodbridge>

I tend to think of expansions differently. At first I thought as you did that the higher the price the more you want of the seats. But then it dawned on me. If you sell 100 seats for $200 per that's 20,000. If you sell 200 seats at $120 per that's 24,000. So 4,000/100 =$40. So each extra seat from 100-200 = a profit of $40 per. It will take roughly 50 weeks to get back the initial investment if the seats cost $2000 each.

The only time when you get a better return on investment is when you are selling out. If you are going to have 2-3 more weeks before you can change prices, then when you build you will get an immediate return on investment for whatever price you sell for for a few weeks until the next price adjustment. So for example I added 1200 bleachers at 200 per. Because I was selling at 10 each, I was able to take a week where each extra seat earned 10. This is 1/20th of the original investment.

The predicatability of courtside and luxury box seats makes it better to build these early IMO. That way you can set the price easier and be close to selling out or selling out which is what you want.

Arena expansions only pay for themselves if the pricing is accurate. If you over/underprice considerably than it takes a lot of the gains out of the expansions.

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239972.34 in reply to 239972.25
Date: 4/16/2013 9:17:25 AM
Overall Posts Rated:
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I would go no more than 12,000 bleachers for div 5.

12,000
1,500
300
17
This would be a good set for you..


Sorry, but I think this is terrible advice.

Don't ever build your arena thinking that you're going to stay in the same, lower division for years. Build your arena with a plan to eventually be using it in D2-D1. Tons of people now are building more lower tier and less bleachers because ultimately they're more profitable. Even D1 and D2 teams that thought they were finished their arenas seasons ago have started to add more lower tier seats. Start building them early.

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239972.35 in reply to 239972.34
Date: 4/16/2013 9:51:41 AM
Overall Posts Rated:
32293229
I would go no more than 12,000 bleachers for div 5.

12,000
1,500
300
17
This would be a good set for you..


Sorry, but I think this is terrible advice.

Don't ever build your arena thinking that you're going to stay in the same, lower division for years. Build your arena with a plan to eventually be using it in D2-D1. Tons of people now are building more lower tier and less bleachers because ultimately they're more profitable. Even D1 and D2 teams that thought they were finished their arenas seasons ago have started to add more lower tier seats. Start building them early.


I'm not even going to quote just an excerpt of this because it's all absolutely spot on. Bleachers are the cheapest to build but they also give you the least resiliency to bad runs once you move up higher in the league structure - or if the day comes where you demote and the fan mood is in the crapper. It makes a lot more sense to invest in the really important seats earlier when the money crunch is not as tight, and then when a team moves up they can always slap another thousand or two thousand bleachers up when they are needed.

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239972.36 in reply to 239972.34
Date: 4/16/2013 9:53:44 AM
Overall Posts Rated:
129129
Wow you think I was suggesting that he stay in Div5 for years? You must have totally not read my last paragraph.

Once he get's to higher divisions he can start thinking about what to build beyond what I suggested. I figured that I would give him some starting seats. He can build them in div4 when he get's there.

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239972.37 in reply to 239972.36
Date: 4/16/2013 10:46:47 AM
Overall Posts Rated:
455455
Fair enough.

You should still build lower tier seats sooner rather than later. To each their own but I still think that telling somebody to build 12000 bleachers against only 1500 lower tier is bad advice. Rik Smits added even more reasons on why in his post, I won't repeat them.

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239972.38 in reply to 239972.33
Date: 4/16/2013 10:49:13 AM
Woodbridge Wreckers
DBA Pro A
Overall Posts Rated:
14021402
With high prices I meant the margin above (or below) the standard price for the seats. So for example, if you have your bleachers at $13 per seat, it's $3 or 30% above the standard price of 10. If you have your Lower tier at $25 per seat, you're 10 dollar below the standard price. Assuming you're selling out, you can generate $13000 per week if you spend $200k on bleachers (you build 1000), or you can generate around $7100 per week if you spend that $200k on Lower tier in this case. The returns will diminish a bit if you have to lower prices to sell out, but still you get the picture.

Now it's true that bleachers are less reliable in higher divisions, so you need to adapt a bit for the future as well. But if you focus solely on Lower tier from the beginning, you're missing out on a lot of income. I'd say start out with a slight focus on bleachers while also building the others a bit, and then as soon as you think you're close to promoting, switch to Lower tier.

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239972.39 in reply to 239972.38
Date: 4/16/2013 11:44:55 AM
Overall Posts Rated:
129129
I agree with you woodbridge. The benefit only comes when selling out. Because you can lower prices at the next price change, its only a temporary gain. The more important factor to consider is the long-term net effect. To me its best to expand when you are not trying to win a title. And sometimes it takes two seasons to prepare to win a title. Around all-star break is a good time to stop expanding and prepare for a title shot for next season by saving cash for players.

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239972.40 in reply to 239972.35
Date: 4/16/2013 9:36:56 PM
Overall Posts Rated:
774774
Beener has great advice. I also wish I would have built more lower tier earlier.

My suggestion to build up an arena would be to look at each type as a % of what you want to end up with.

So, end game, if you want to end up with 15000 5000 500 50 (for simplicity sake) you can aim for:

Start: 4500 450 50 0

Div 5: 6000 1000 100 10 (40% bleachers/20% more expensive seats)

Div 4: 8250 2000 200 20 (55% bleachers/40% more expensive seats)

Div 3: 10500 3000 300 30 (70% bleachers/60% more expensive seats)

Div 2: 12750 4000 400 40 (85% bleachers/80% more expensive seats)

Div 1: 15000 5000 500 50 (100% bleachers/100% more expensive seats)

Something like that ;)

Last edited by Kumiko (CAN U21) at 4/16/2013 9:38:21 PM

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