Strategic Business Proposal - jwjarvisjr.fsbizsite.comjwjarvisjr.fsbizsite.com/wp-content/...FINAL.docx · Web viewThese ticket packages target nearly 40% of the local market and

Strategic Business Proposal 1 of 30

Strategic Business Proposal

for

Tampa Bay Rays

For: Tampa Bay Rayshttps://www.mlb.com/rays

Prepared On: Sun Sep 16th, 2018

Prepared by: Joseph Jarvis, Tanya Brown, Jamie Tavenner, Kimberly Gronski, Cameron McCarthy, Bretton Tanner

Instructor Name: Jennifer Marshall

Strategic Business Proposal Page 2 of 30


Contents

Introduction............................................................................................................................................................4

Executive Summary............................................................................................................................................4

1. Organizational Challenges & Proposed Solution................................................................................................5

Organizational Challenges..................................................................................................................................5

Proposed Solution..............................................................................................................................................5

2. Environmental Scanning.....................................................................................................................................7

Internal Analysis.................................................................................................................................................7

External Analysis...............................................................................................................................................10

3. Strategy Formulation.......................................................................................................................................13

Operations........................................................................................................................................................13

Sales, Marketing, & Distribution.......................................................................................................................15

Legal .................................................................................................................................................................16

4. Proposal Budget & Projections.........................................................................................................................17

Sales Projections...............................................................................................................................................17

Project Budget..................................................................................................................................................18

5. Strategy Implementation.................................................................................................................................19

Timeline and Key Milestones............................................................................................................................19

6. Future Plans.....................................................................................................................................................20

Long-Term Opportunity and Development Plans.............................................................................................20

7. Appendices and References.............................................................................................................................21

References........................................................................................................................................................21

Appendices.......................................................................................................................................................23

Appendix 1:Competitive Analysis................................................................................................................23

Appendix 2:Pricing Strategy........................................................................................................................24

Appendix 3: Sales Projections......................................................................................................................25

Appendix 4: Expense Assumptions..............................................................................................................26

Appendix 5: Income Statement Summary...................................................................................................27

Appendix 6: Seating...............................................................................................................................28, 29


Introduction

Executive Summary

Take me out to the ballgame! The following proposal addresses the current issues surrounding the Tampa Bay Rays and their dismal attendance situation. The Tampa Bay Rays currently rank 29 th in the league out of 30 teams in average yearly attendance.

This document proposes two promotional ticket packages that will offer the Tampa Bay Area community a discount to see their hometown team play baseball, while also helping the organization increase attendance - as well as profits. These ticket packages target nearly 40% of the local market and offer a family-oriented pricing solution as well as a couples-focused pricing solution. These ticketing plans will rely on currently established media outlet advertising, strategic sponsor partnership involvement, as well as other varied ways of getting word out as to their existence. Included points of this proposal include a budget, a plan of action, as well as a timeline of events. By following this plan, the organization will see a projected overall increase in attendance of at least 10% within the first year of activation.


1: Challenges & Solutions

Organizational Challenges

The current issue that the Tampa Bay Rays organization is facing involves an overall lack of attendance at home games. Per ESPN, this is resulting in an almost half-empty stadium. Although the league as a whole has experienced a drop in in-game attendance (Yahoo, 2018), the Rays in particular are struggling in regard to ticket sales, as they only average 14,733 fans per game in comparison to the league wide average of 28,874.

Experts claim that professional baseball as a whole has changed to a more even playing field, therefore the dynamics are reduced. Frankly, there aren’t enough home runs and the innings seem to suffer from the lack of fast action that drew the crowds like it once did (Fortune, 2018). Others claim that the game has just become too expensive to attend for the common person (WTOP, 2018).

Proposed Solution

Currently the Rays call St. Petersburg, Florida home. St. Petersburg is roughly one half of the major Tampa Bay metropolitan area. This area consists of 70% family-owned housing, 33.2% having children. The average Tampa-area family size averages 3.25 people. Thus, using a family-oriented ticket packaging system, we can appeal to 1/3 of our local target market using various methods of ticket promotion. These prescribed methods include a family “four-pack” ticket packages that includes a set discounted price for all four tickets, four hot dogs, and four refillable drinks. “Family Four Pack” tickets will include sponsor partnership support and funding.

An additional 6.8% of the area includes unmarried households, although a smaller market share, when added to the 33.2% of the households with children, we can appeal to 40% of the total target market area. Therefore, “Tabañero Date Night” will also be part of the proposed solution. In order to appeal to the couple’s demographic, a couples’ ticket package will be offered at a discounted rate. This package will include two hot dogs with refillable drinks.

All of the above-proposed solutions will help gain more fans in the stands, as well as allow the team to better connect with, and be supported by, the community. Ultimately, the Rays can be the


“family team” of Major League Baseball and can be the most family-oriented ticket booth in the nation.

Overall, these proposals also give those who might not be able to afford to take their entire family to a baseball game an ability to do just that. It also creates another option to the various mindless events or electronic activities that tend to isolate family members and allows them to enjoy one another as generations before have. And giving one more affordable dating option is always a good bet! Per Sports Business Journal, (2017), ticketing packages and programs do work. There are countless industry professionals who swear by them. By tying the packages to focus on the main demographic in the area, the team can see great success.

All ticket package dates will be subject to change at discretion of the Tampa Bay Rays.

Prices for this new ticketing plan can be found in Sales, Marketing, & Distribution section.


2: Environmental Scanning

Internal Analysis

Company Overview

The Tampa Bay Rays currently reside in St Petersburg, Florida. It serves as the home Major League Baseball team for the entire Central Florida area, representing the area in the American League East Division. The Rays mission is to energize the community through the magic of Ray’s baseball. Since 1998, the organization is committed to building a strong bond through meaningful interactions, generous charitable donations and proud representation of Major League Baseball (Rays, 2018).

The current Rays’ business model is not readily available online, and thus unclear. However, upon contacting the team, we have learned that their main focus is to build a strong, competitive team through their minor league farm system and affiliates. While most teams spend money on top notch players, the Rays have taken a unique approach. One that is geared more toward a strong developmental system to stay relevant.

Financial Standings

The Rays currently rank dead last at number 30 in regard to team value (Forbes, 2018). While at first glance this might sound like a bad thing, since the current ownership has taken over in 2004 they have actually increased value every year. They currently stand at being valued at $900 million. With just over $75 million more than a year ago, and $250 million more than 3-4 years ago. This is a big increase from $200 million just 14 years ago, in 2004 (Forbes, 2018).

Revenue, which currently stands at $219 million per season, has been a slow but steadily increasing number over the past few years. In 2015 and 2016, the team’s revenue was $190 million. In 2017, the team’s revenue sat at $205 million. With this trend we can see that the revenue is improving.

The only known debt number currently available is that of the stadium costs, which currently sits at 16% of the total operating income of the team, which is $23 million (Forbes, 2018).


Organizational Strengths

One of the main advantages that the Rays have in comparison to other MLB teams is when it comes to playing home games in a crazy weather area. Tropicana Field is a domed stadium. Therefore, games go on as scheduled, and the chances of a weather-related delay or postponed game is null (Rays, 2018).

Another advantage of the team’s stadium is the fact that it is climate controlled because the Florida weather is hot, humid, and muggy. Fans, and players, can enjoy the game while in a 72-degree Fahrenheit climate (Rays, 2018). Not bad.

The last major strength for this team is that they have low debt operations. In comparison to the in-state rival Miami Marlins, the Rays only have a 16% debt ratio and are profitable at $23 million per season in operations. Per Forbes, (2018), the Marlins are currently sitting at a 40% debt ratio and have an operating income of -$53 million. While both teams share low attendance, the Rays stay both physically, as well as fiscally competitive in comparison to the alternative Florida-based team (Forbes, 2018).

Organizational Weaknesses

The Rays do indeed have their fair share of weaknesses as they currently rank at 29 out of 30 in in-game attendance. One main weakness has been the stadium, which many attribute the low attendance figures to. Frankly, the stadium’s location is atrocious, with only 20% of the area’s population within a 30-minute drive (Tampa Bay Times, 2018). This makes it extremely difficult for the local commuters to catch a 7:00PM game on a work night during rush hour traffic, especially when the main access to the stadium is a major bridge that already has horrendous traffic.

Another weakness is the current situation with the teams in regard to performance – or winning games. The team has not reached the playoffs since 2013 (ESPN, 2018). People are more prone to going to a sports event where the ownership and staff has fielded a winning team. In recent years, the Rays have had issues meeting these demands. However, this weakness is currently being addressed by ownership who have reverted back to the business model of a strong up-and-coming farm system stacked with top talent.

Finally, a last weakness involves the current ownership and management of the team. Many in the area feel cheated when players are traded or released, since they have grown an attachment to them. This is known as “the Rays Way” in the area, and ultimately is one of the main reasons why the team has a low attendance. Granted new players are cheaper than seasoned veterans or star players.


Once their initial contract is over, the players are normally traded away, basically gutting the team. This lack of consistency leaves fans with a bad taste in their mouths and ultimately creates the stigma that “the team doesn’t care about the fans” (NY Post, 2018)..

Customers

The Rays currently serve the entire Tampa Bay area consisting of Hillsborough, Pinellas, Pasco, and Hernando counties. This metropolitan area consists of 3 million people (Forbes, 2018). According to The Tampa Bay Times, they are projecting this area to grow to 3.3 million over the next five years

Currently, 33.2% of area households have children, which is the majority of our current proposals target market. The other current target market, couples, make up 6.8% of the market (World Population Review, 2018).

Current local FOX television and radio channels are dominate in the area, especially since the Rays have excellent television viewership (DRAYSBAY, 2017) concluding that the best way to advertise in the area is through local television, radio, and social media. These media outlets are widespread, familiar, and user friendly. They keep fans in the know on Rays news and information.

Sponsorship Partners

Currently, the Rays have quite a few sponsors that could be considered potential partners in this proposal. The main sponsor of the Tampa Bay Rays is Coca-Cola (DRAYSBAY, 2018). They have exclusive beverage rights with the team. This sponsorship could work well when dealing with the “Family Four Pack” and “Tabañero Date Night” ticket plans that include a meal. Coca-Cola can capitalize on this by incorporating a special Coca-Cola-branded “Family Four Pack” reusable plastic cup that fans can take home with them, which, when they attend future games, will allow them to refill at a discount. This will also allow for the team to prominently display the Ray’s brand logo, in addition to the Coca-Cola branding giving both organizations involved a low-key, in-home advertisement. Coca-Cola is a well-known, long-established company that is community friendly, therefore issues should be minimal to none.

Another major collaborator is Tabañero Hot Sauce (Yahoo! Finance, 2018). This is another great food focused company that can help with the meal portion of our ticketing strategy. By providing various sauces for the meals provided, as well as store coupons, the company can gain exposure to


new consumers who otherwise might not discover their products. While Tabañero might be a major company, it still lacks widespread name recognition in comparison with other condiment companies. Therefore, issues could arise in regard to fan tastes, as many people may prefer other products.

The third major collaborator with the Tampa Bay Rays is Kayem Franks. Deemed the “Official Hotdog of the Tampa Bay Rays” (DRAYSBAY, 2017), the company can work with this sponsor when dealing with the “Family Four Pack” and “Tabañero Date Night” ticket plans that include a meal. This will give the collaborator, Kayem Franks, more name exposure and recognition as they are promoting their product. Kayem Franks is a little-known company and generally they are not your first thought when thinking of hot dog brands. Many competitors exist in this market. Therefore, issues could arise in regard to fan tastes, as fans may prefer other products.

External Analysis

Competitors

The main direct competitors to the Tampa Bay Rays include other AL East division teams, as well as their fans. These teams would include the New York Yankees, Boston Red Sox, Toronto Blue Jays, and the Baltimore Orioles (ESPN, 2018). The Rays are located in an area with many northern transplants and thus routinely have a fair number of another team’s fans in their stands (DRaysBay, 2017). This is due to the fact that these migrators stay faithful to their previous home teams. They attend Rays games and root for the competition.

The main in-direct competitor to the Tampa Bay Rays is their Miami counterpart, the Miami Marlins. The in-state rivalry, known as the Citrus Series, is considered indirect since the Miami Marlins are a National League team whereas the Rays are an American League team. This being said, they only meet each other a couple of times a season versus the Rays’ direct competitors whom they meet regularly. However, they are still considered a rival due to the fact that they are located in the same state and offer the same product – professional baseball (Bleacher Report, 2008).

More on the competitors of the Tampa Bay Rays can be seen in Appendix 1.


Business Climate

Political & Regulatory

The current stadium, Tropicana Field, is used by the Rays via a lease from the City of St Petersburg which runs through 2027 (Field of Schemes, 2016). While current support of the Rays is seen in the City of St Petersburg government, the City of Tampa’s government actually shows more interest in the team. The team is currently owned by Stuart Sternberg, who took control of the team in 2004. No external approval is needed to offer different ticket plans or packages.

Some will debate that building a new stadium will come out of the pockets of taxpayers and not from the team. Some feel that sports franchises also drain the economy and taxpayer money that would have gone to other different services such as: city services or tax relief. These two stimulate the economic activity in any county.

Economic

The economic situation with the Rays centers on a low debt to profit ratio (Forbes, 2018). Therefore, the team does indeed have the ability to feasibly pull off a new ticketing plan (such as the ones being mentioned here) both in terms of implementation costs of as well as sustainment.

The area is growing at a rapid rate and some consider it to be in the top ten of the fastest growing cities in the nation (WTSP, 2017). The economy is booming, with new construction and jobs starting every day.

Florida is considered the “Spring Training home of MLB”, therefore there are a lot of baseball fans in the area. The Florida economy in general is highly dependent on the sport of baseball as a whole. We get a lot of tourism. People are coming from different parts of the states, and even the world, to watch a game they love. Having a new stadium will do a few things: One, create jobs for those in that area, and two, bring people to a part of the state they would not normally visit.

Social & Cultural

We think we understand why tickets sales are down. One recent problem we found is that there is no real-time “pause” button at the park; no instant replay, no re-dos. But what these past few generations are missing is what made baseball baseball - the actual experience. It’s one thing to glance at a game between commercials (or texting), and smelling the waft of peanuts, hot dogs, body odor (from some over-zealous fat dude three seats over), and the rush of the crowd actually doing something in unison… shouting, “Boo! Ump you're blind! Get some glasses!” or singing in their near-drunken state a practically pitch-less “take me out to the ballgame”- or doing “the wave” around the


stadium and yelling “charge!” at the organ chord stabs. It's beautiful! No one is seen as an enemy. And for a couple of hours, we see America again.

Tourism is one of the top industries in this area of Florida (Tampa Bay Times, 2018), therefore a lot of the local economy caters to the tourist market. Historically, Tampa Bay was once considered the “Cigar Capital of the World!” It has also been (and still is) considered an art capital, nightlife destination, and beach destination.

The Tampa Bay area is a melting pot of various ethnicities, nationalities, and cultures; known for its diverse cultural activities and cuisine, in particular.

Technological

Currently, the technological aspect of the Tampa Bay Rays is in a giant cloud of grey. While the team does stay active via mobile technology (apps, social media, etc.), the stadium itself is lacking technological advances in the actual game of baseball. This is more than likely due to the age of the stadium, which was built in 1992, six years prior to the Rays becoming a team. The stadium itself has seen upgrades over the years but is still considered technologically inferior to other newer stadiums across the country. Most people think that a new stadium, more centrally located, in the area will lead to higher attendance. With a new stadium in preliminary stages, the team has been spearheading the issue, but ultimately it's the citizens who will have the final say.

Children and young adults are a major factor in our plan to target families. More and more children are connected on social media than ever before as well. Thus, since a good portion of them have cellphones. Knowing this, we can use different enticements and digital advertising techniques (such as within the Rays app) increasing interest and improving draw with this demographic.

Overall, using apps, as well as social media, the Rays can directly communicate information and incentivize these children (as well as the families) to experience making a memory.

Industry Trends

Business Opportunities

In recent years, more and more research has been done on violence as well as concussions in sports. Many parents have been leery on allowing their children to get involved with intense sports such as football or boxing. Baseball, on the other hand, has been viewed overall as a safer sport by these parents, with 63% in agreement (CBS News, 2017). This is a great business opportunity due to the fact that more than half of the parents surveyed saw baseball as being safer alternative to football (with its 18% support). The Rays can use this as a way to attract ticket buyers whose kids might want to


go to a major sporting event, yet as parents don’t want them to become interested in more injury-prone sports. At the same time, planting the seeds of interest within the ranks of future ticker holders.

Business Threats

While parents are prone to thinking baseball is a safer alternative for children, and thus interested in baseball as a safer alternative, there unfortunately is always the stigma of steroid use within the sport. In recent year, MLB has been cracking down on steroid users, yet there is still the occasional player who gets caught up in the mess. How could be a threat to the team? When surveyed, 57% of children (NBC News, 2008) admitted to using steroids stating they started due to their idolization of their favorite athlete. It naturally follows that parents may fear their own children, in being so heavily influenced to be like their favorite ballplayer, might resort to cheating and using these substances.

3: Strategy Formulation

Operations Organizational Impact

The whole Tampa Bay Rays team is going to have to be on board for this to work. Although the entire front office is needed to make this proposal become a reality, some positions are going to be needed more than others.

To lead this initiative, the Manager of Integrated Marketing, Emily Miller, will head up the entire operation (Rays Front Office, 2018). Her main responsibility will be acting as the figurehead in all dealings with the proposed ticket plans, implementation of our proposal’s end goal, as well as be the main point of contact.

Ryan Delgado, the Manager of Digital Marketing, and Nikki D’Aurelio, the Manager of Marketing and Creative Services, along with the rest of the marketing team, will be charged with the announcement and elemental fulfilment of the proposed campaign and the logistical placement and distribution of all promotional information in regards to this campaign (Rays Front Office, 2018).

The Ticket Sales & Service department needs to be aware of, and ready for, accommodation of these promotional ticket plans and the applicable sales via ticketing. This department will be headed by the Director of Ticket Operations, Robert Bennett. He will be working with the departmental staff on these ticket sales, meal voucher distribution, and other ticket-related concerns and their


implementation (Rays Front Office, 2018).

Since there may be a large influx of people with questions in regard to the ticket plan details, as well as the varied games in general, the Strategy & Development department, more specifically, Rafaela Amador Fink, the Senior Director of Public Affairs needs to be ready to have his department employees ready to help, accommodate, and answer the call to the fan’s questions and concerns (Rays Front Office, 2018).

Finally, due to the anticipated increase in the number of attendees, Stadium Operations need to review any security needs, coverage levels, potential risks, or other security-based questions prior to implementing the proposal. Both George Dowling, the Senior Director of Building Operations, as well as Jim Previtera, the Senior Director of Game Operations need to work together to make the venue as safe as possible for the fans in attendance (Rays Front Office, 2018).

All staff are expected to be professional and courteous, as well as willing to work with one another during the upcoming season as the proposal takes root.

Staffing Needs

The Tampa Bay Rays currently have adequate numbers of required employees to fulfill the proposals goals excepting for one department, Stadium Operations. Currently, there are only four security guards listed on staff (Rays Front Office, 2018). This could be an issue, as we are expecting larger crowds. While local law enforcement does indeed help security, in our estimation, the number of security staffers does need to increase by at least ten more personnel to make the venue a safer site.

Other Needs

Representatives from our major collaborators, Coca-Cola, Tabañero, and Kayem Franks will need to be in the loop in regard to projected and realized sales, inventory, and overall promotional needs. Since both Coca-Cola and Kayem have products that are a large part of our proposed promotional ticket campaign, they will need to be easy to contact in case of questions or issues.


Sales, Marketing, & Distribution

Marketing Mix

Price

Our current price for our “Family Four Pack” deal stands at $79.98. This gives our fans a $32.02 discount when compared to our everyday prices. This includes a $2.50 savings per ticket, as well as a 50% off discount for the four hotdogs, and a 75% off discount for the two drinks.

As for the “Tabañero Date Night” prices, we are offering a $27.02 discount, and selling them for a $29.98 price. This deal includes a $20.00 savings on tickets, 50% off discount on hotdogs, and a 50% off discount for the two drinks.

These prices were decided upon by comparing current MLB ticket and concession prices, current Rays ticket and concession prices, as well as the current Tampa Bay area economy. Our pricing strategy is in cooperation with our main promotional partners, Kayem Franks and Coca-Cola.

Unit Cost

There was a study done by the Sports Journal about effects of promotion on ticket sales. The findings were that there was significant increase in attendance when any promotion was used. There was increased in attendances when non-price promotions were present. During this study, they were able to see a 14% increase in ticket sales. The more populated the area - the more increase there was.

Since the new owner, Stuart Sternberg, took over the Tampa Bay Rays, it has been his mission to drive more ticket sales to get more people in the seats. He has worked closely with his marketing team to come up with different ticketing packaging for families on a budget. Per Ashley Gurbal Kritzer, Senior Reporter for the Tampa Bay Business Journal, “The promotions represent a change in thinking in the front office with a renewed emphasis on boosting ticket sales and revenue.” Although there are no hard numbers posted online, doing promotions have boosted ticket sales as much as 60-80% since 2004.

See Appendix 2 for more pricing breakdown.

Product

Our main promotions include a set of discounted ticket and meal plans for both families as well as couples. Due to the intimacy and seclusion of the TBT party deck, this area will be used for the “Tabañero Date Night Package”. In proximity of the children’s favorite Ray’s Touch Tank, the outfield areas next to the display will be used for “Coca-Cola Family Flex Pack”. They will be offered for a lower


rate than traditionally advertised prices and will include meals and beverages. At this time, the family ticket pack will be known as the “Coca-Cola Family Flex Pack” and the couples ticket pack will be known as the “Tabañero Date Night Package”, both ticket plans will be advertised as being “Presented by Kayem Franks and the Tampa Bay Rays”.

Distribution

The distribution of the ticket packs will be through both the Rays and MLB box office, the official website, as well as through third-party ticket vendors such as Ticketmaster and Stubhub. Distribution of meals and beverages included in ticket packs will via all Rays-owned food kiosks (excludes third party food vendors).

Promotion

The promotion of the ticket plans will be through the social media sites (Facebook, SnapChat and Twitter), local television and radio outlets, the Tampa Bay Rays app, and in-stadium advertisements. This allows for a broad spectrum of consumer exposure and awareness of this promotion and will be easy to implement and maintain. A commercial meant for television may also work as a social media video post. We will be working with Ray’s marketing department to absorb promotion costs and implement.

Sales Strategy

Tickets and ticket packages will be sold in existing outlets. They will be sold by request of the consumer. Tickets are subject to seating restrictions.

See Appendix 6 for more seating section breakdown.

LegalRegulations

Tax sales permits are required and should be posted and available to any official inspection. Food safety permits, licenses, and notices should be visible to all attendees as well as officials.

Contracts

Sponsorship contracts with collaborators Coca-Cola, Kayem Franks, as well as Tabañero Hot Sauce, should be updated to reflect their involvement in the proposal. Contact with each company’s representative should occur as soon as possible to notify of changes to existing terms and conditions.


These contracts will also reflect the use of the collaborator’s intellectual property by the Tampa Bay Rays in-house marketing team.

Insurance

Current insurances that the Rays have in place is unknown. Yet, the insurance should cover any and all issues, known and unknown, that may arise prior to, during, and after the games that could constitute any liability or culpability for the Rays, or their commercial and maniple partners in regard to the safety and general welfare of the product purchasers in attendance.

Intellectual Property

All Rays branded imagery is open to be used by the organization as well as its collaborators. All collaborator branded imagery will be available to be used according to contract terms and conditions. Intellectual property used by both the Rays organization as well as the collaborators will be limited to the proposed ticket packages only.

4: Proposal Budget & Projections

Sales Projections

During the first year we expect a high turnout for both ticketing promotions due to the savings and affordability for the fans. For the family packages, we are expecting to sell a total of 23,046 packs during the upcoming regular season, this comes out to an estimated 92,144 people in added attendance over the season, or an 11% increase in fans. This particular package costs the team roughly $32.02 and will sell for $79.98. The estimated total net sales of the family plan will come in at a whopping $1,104,807.

The date night ticket package is expected to sell a total of 64,492 packs. This comes out to an estimated additional 128,984 fans in the stands during the upcoming regular season. At a cost of $27.02 and a price of $29.98, the individualized profit margin is small but becomes significant when tallied up, garnering estimated total net sales of $190,896.

Sales Projections can be found in Appendix 3.


Project Budget

At this moment our operational expenses will essentially stay the same. We are not planning on adding any more positions since we are just adding a few ticket options to the current market. We have reviewed how many people we have in the marketing department and our assessment is that we are fully staffed. Once the ticket pricing gets approved, an email to the entire staff will be sent out about detailing the changes. If there are any questions they can redirect to those in charge.

The “Family Four Pack” and “Tabañero Date Night” packages are planned to be advertised on a few different networks. One would be the in-house stadium media boards. There would be no additional charge for utilizing that service since it is considered a readily accessible in-house advertising system and has already been accounted for in the overall operational costs

The plan also includes advertisement on social media outlets such as Facebook and Snapchat. The cost to advertise on Facebook would be $0.27 CPC (cost per click) and $7.19 CPM (cost per impression). If we did 10,000 CPC it would be $2,700 for 6 months, it would be $16,200 a year. The cost of actually creating the advertisement is null since the advertisements will utilize already established resources. Twitter promotional tweets cost $.50 - $4.00 per. We will use the Ray’s current account.

With Snapchat there are two different methods of action, we could do the Snap Ads which start at $3,000 a month without agency fees or creation costs, or we could go the route of sponsored geo-filters. These filters cost about $5 an hour, and if we did them during the game which is about 4 hours long, that would only cost $20. Since there are 3 games a week that would be $60 days a week, for the 6 months it would be $1,560

Another advertisement cost includes doing a 30-second spot on the radio. We looked into advertising on 620 (WDAE) which is a popular local radio station in the Tampa Bay Area. For fifteen weekday ads and four weekend ads airing costs will be $1443.5 per week with an additional on-time cost of $750 to record and produce the full ad in studio. There is a contracted studio, 2-bit Productions, for this one spot production. We find that running this ad every other week (for 13 weeks) during the season will be more beneficial to our marketing since we are going to do a television commercial as well. The total for those 13 weeks in TV will cost $18,765.50. If we include the one-time fee for production cost it would come out to $19,515.50. We would not need to pay any outside talent to do this ad because it is already written into the player’s contracts to do promotional television and radio appearances for the team. Writing and production of the advertisement and its cost fall under already established team resources.


The plan also includes doing a 30 second television commercial during the day time. This commercial would cost 10 x 20 x $11.15 = $2,230 ($57,980 for 6 months). Per FistSmallBusiness.com: “Ballpark fair price for TV advertising = (number of spots) x (number of viewers in thousands) x (average CPM for the TV program)” Filming a commercial would only be about $20,000 since it will consist of highlights already recorded from actual game footage and will be created by already staffed personnel.

Finally, legal expenses will include a law firm to help us renegotiate and amend the contracts with our sponsorship partners who are subsidizing the meal portion of our ticket plans. These fees range from $500-1500 an hour and should be a minimum expense. Once our organization and the collaborator’s organization(s) come to an agreement, the contracts will then be handed over to legal professionals. From there they can review, suggest, and help us approve, amend and enact the conditions set forth.

High turn-outs are expected at the launch of this ticketing campaign. Therefore, security numbers will have to be bumped up, as according to the Tampa Bay Rays website, they only have 4 security guards on payroll. Around 10-11 more security guards should work, since the stadium does have partnerships with local law enforcement. The average price of a security contractor is $11 per hour. For a 4-6-hour game time a guard will make an average of $44-66.

The expense assumptions can be found in Appendix 4.

The income statement can be found in Appendix 5.

5: Strategy Implementation

Timeline & Key Milestones

Pre-Launch (Pre-2019 season)

Operational team will be notified and given a copy of proposal. Collaborators will be notified for a change of contract and given a copy of proposal. Marketing materials will be created, including signage, commercials, and imagery. Ticketing office will be notified of offer price and conditions. Food service personnel will be given notice of increased supply orders and budget.


Year 1 (2019 MLB Season)

Ticket plan rollout. Goal is to increase home game attendance by a 10% average, attendees will be measured by both ticket sales as well as gate turn-styles. Secondary goal: Increase in merchandise sales by 5%, sales numbers will be compared to prior years before ticket plans were implemented.


Adjust plan based on previous years’ successes and flaws. Goal will be to increase home game attendance by a 15% increase on previous year’s average. Attendees will be measured by both ticket sales as well as gate turn-styles. Secondary goal: Increase in merchandise sales by 10%, sales numbers will be compared to prior years before ticket plans were implemented as well as compared to when year’s ticket plan was active.


Adjust plan based on previous years’ successes and flaws. Goal will be to increase home game attendance by a 20% increase on previous year’s average. Attendees will be measured by both ticket sales as well as gate turn-styles. Secondary goal: Increase in merchandise sales by 20%, sales numbers will be compared to prior years before ticket plans were implemented as well as compared to when year’s ticket plan was active.

6: Future Plans

Long-term Opportunity & Development Plans

This proposal is intended to run until 2023, when the new Rays ballpark in Ybor City is complete. At that time, the proposal will be paused so the team can settle in its new home. Attendance will be watched in their new home carefully as they implement these new promotions, the “Coca-Cola Family Four Pack” for $79.98 and the “Tabañero Date Night Package” for $29.98. If there are still attendance issues in the new ballpark, the proposal will renew in 2024, if proven successful. This is the testing


phase of the proposal in case it is needed, or welcomed, in the future home of the Rays.

7: Appendices and References

References

10 Degrees: Baseball's attendance woes have MLB and owners rightfully spooked. (n.d.). Retrieved from https://sports.yahoo.com/10-degrees-baseballs-attendance-woes-mlb-owners-rightfully-spooked-031815621.html

9, 2. J. (n.d.). Ticketing strategies that work. Retrieved from https://www.sportsbusinessdaily.com/Journal/Issues/2017/01/09/In-Depth/Ticketing-strategy.aspx

About Rays Play Ball | Tampa Bay Rays. (n.d.). Retrieved from https://www.mlb.com/rays/play-ball/aboutAland, Maggie. FitSmallBusiness.com. Local & National TV Advertising Costs & How to Advertise. 11/28/2017:

https://fitsmallbusiness.com/tv-advertising/Baseball America. (n.d.). Retrieved from https://www.baseballamerica.com/Browing, Robert. The Effects of Promotions on Attendance in Professional Baseball.3/14/2008:

http://thesportjournal.org/article/the-effects-of-promotions-on-attendance-in-professional-baseball/ Howard, J. (2017, December 11). When kids get first cell phone around the world. Retrieved from

https://www.cnn.com/2017/12/11/health/cell-phones-for-kids-parenting-without-borders-explainer-intl/index.html Indeed.com Security guards: https://www.indeed.com/jobs?q=security+guard&l=Tampa+Bay%2C+FLKritzer, Ashley Gurbal. Tampa Bay Business Journal, 2/8/2016:

https://www.bizjournals.com/tampabay/news/2016/02/08/exclusive-how-the-rays-front-office-plans-to-drive.html Lopez, B. (2017, September 15). Tampa Bay Rays-Florida Marlins: The New Interstate Rivalry. Retrieved from

https://bleacherreport.com/articles/25599-tampa-bay-rays-florida-marlins-the-new-interstate-rivalryMarcus, M. B. (2017, April 12). How many parents hold their kids back from sports due to concussion risk? Retrieved from

https://www.cbsnews.com/news/sports-concussions-how-many-parents-hold-kids-back-due-to-risk/ McLeod. Betsy. Blue Corona. 3/9/2017. How Much does it cost to advertise on Facebook:

https://www.bluecorona.com/blog/how-much-facebook-advertising-costsMiami Marlins on the Forbes MLB Team Valuations List. (n.d.). Retrieved from https://www.forbes.com/teams/miami-

marlins/MLB ATTENDANCE. (n.d.). Retrieved from http://www.espn.com/mlb/attendance Muscara.Aprille. Quora. How much does it cost to advertise on Snapchat: https://www.quora.com/How-much-does-it-

cost-to-advertise-on-snapchat Pashman, Althea, Fansided. 2017.: https://rayscoloredglasses.com/2017/04/12/tampa-bay-rays-value-increases-forbes/Rays Front Office. (n.d.). Retrieved from https://www.mlb.com/rays/team/front-officeRays move to Ybor City would put team within heart of region's population, study shows. (2018, May 30). Retrieved from

http://www.tampabay.com/news/growth/Rays-move-to-Ybor-City-would-put-team-within-heart-of-region-s-population-study-shows_168479705

Russell, D. (2017, October 10). Rays television ratings hold steady in 2017. Retrieved from https://www.draysbay.com/2017/10/10/16454012/tampa-bay-rays-tv-ratings-2017

https://www.quora.com/How-much-does-it-cost-to-advertise-on-snapchat

https://www.quora.com/How-much-does-it-cost-to-advertise-on-snapchat

http://www.espn.com/mlb/attendance

https://www.cbsnews.com/news/sports-concussions-how-many-parents-hold-kids-back-due-to-risk/

https://www.bizjournals.com/tampabay/news/2016/02/08/exclusive-how-the-rays-front-office-plans-to-drive.html

https://www.indeed.com/jobs?q=security+guard&l=Tampa+Bay%2C+FL

https://www.cnn.com/2017/12/11/health/cell-phones-for-kids-parenting-without-borders-explainer-intl/index.html

http://thesportjournal.org/article/the-effects-of-promotions-on-attendance-in-professional-baseball/

https://www.baseballamerica.com/

https://www.mlb.com/rays/play-ball/about


Sanchez, M. W. (2018, February 21). 'What is this': Ray’s players are angry after latest trade. Retrieved from https://nypost.com/2018/02/21/what-is-this-rays-players-are-angry-after-latest-trade/

Sanford, A. (2017, September 20). Chris Archer - "Having 25,000 Cub fans here, wasn't very fun". Retrieved from https://www.draysbay.com/2017/9/20/16338944/chris-archer-where-are-the-rays-fans

SponsorPitch. (n.d.). Retrieved from https://sponsorpitch.com/deals/coca-cola-sponsors-tampa-bay-rays Statista. Average concession stands prices in Major League Baseball from 2010-2018:

https://www.statista.com/statistics/202619/concession-stand-prices-in-mlb/Stenson, J. (2008, March 03). Kids on steroids willing to risk it all for success. Retrieved from

http://www.nbcnews.com/id/22984780/ns/health-childrens_health/t/kids-steroids-willing-risk-it-all-success/#.W4eSP5NKhE4

Tabañero Becomes the Official Hot Sauce of The Tampa Bay Rays. (2018, March 28). Retrieved from https://finance.yahoo.com/news/taba-ero-becomes-official-hot-175300836.html

Tampa Bay area's population projected to grow to 3.1 million this year. (2018, February 22). Retrieved from http://www.tampabay.com/news/business/Tampa-Bay-area-s-population-projected-to-grow-to-3-1-million-this-year_165732637

Tampa Bay Rays Alternate Logo. (n.d.). Retrieved from http://www.sportslogos.net/logos/view/2digxu8bqff4b3nek2uago22f/Tampa_Bay_Rays/2008/Alternate_Logo

Tampa Bay Rays on the Forbes MLB Team Valuations List. (n.d.). Retrieved from https://www.forbes.com/teams/tampa-bay-rays/

Tampa Bay Rays Seating Chart. 9/11/2018: https://mpv.tickets.com/?agency=MLB_MPV&pid=8541105&tfl=Tampa_Bay_Rays-tickets-Tampa_Bay_Rays:_Tickets:_Rays_Tickets-ticket_grid-5-Phone-Portrait#/event/8541105/seatmap/?selectBuyers=false&minPrice=15&maxPrice=275&quantity=2&sort=price_asc&ada=false&seatSelection=true&onlyCoupon=true

C. (2016, January 04). Tampa History. Retrieved from https://www.tampagov.net/info/tampa-historyTampa, Florida Population 2018. (n.d.). Retrieved from http://worldpopulationreview.com/us-cities/tampa-population/Tampa, other Florida cities are nation's fastest growing, Forbes says. (2017, March 07). Retrieved from

https://www.wtsp.com/article/money/tampa-other-florida-cities-are-nations-fastest-growing-forbes-says/420222957Tropicana Field Information. (n.d.). Retrieved from https://www.mlb.com/rays/ballpark/informationUpcounsel, How Much Does a Lawyer Cost: https://www.upcounsel.com/how-much-does-a-lawyer-costU.S. Census Bureau QuickFacts: Tampa city, Florida. (n.d.). Retrieved from

https://www.census.gov/quickfacts/fact/table/tampacityflorida/PST045217Yankees fandom in Tampa Bay's top 25 most populated zip codes. (n.d.). Retrieved from http://tampabaybaseballmarket.com/yankees-fandom-in-tampa-bays-top-25-most-populated-zip-codes/

http://tampabaybaseballmarket.com/yankees-fandom-in-tampa-bays-top-25-most-populated-zip-codes/

https://mpv.tickets.com/?agency=MLB_MPV&pid=8541105&tfl=Tampa_Bay_Rays-tickets-Tampa_Bay_Rays:_Tickets:_Rays_Tickets-ticket_grid-5-Phone-Portrait#/event/8541105/seatmap/?selectBuyers=false&minPrice=15&maxPrice=275&quantity=2&sort=price_asc&ada=false&seatSelection=true&onlyCoupon=true



https://www.forbes.com/teams/tampa-bay-rays/

https://www.forbes.com/teams/tampa-bay-rays/

https://sponsorpitch.com/deals/coca-cola-sponsors-tampa-bay-rays


Appendices

Appendix 1: Competitive Analysis


Appendix 2: Pricing Strategy

Note: Family Four Pack offers 4 refillable drink cups. Coca-Cola will supply the additional two drink cups at no charge.


Appendix 3: Sales Projections


Appendix 4: Expense Assumptions


Appendix 5: Income Statement Summary


Appendix 6: Seating

Taberñero Date Night

Sections: 341 – 355, inclusive.

254 (section 341) 109 (section 343) 257 (section 345) 106 (section 347) 279 (section 349) 84 (section 351) 197 (section 353)+ 42 (section 355) 1,327 Total Seats Available

81 Home games per season

1,327 x 81 = 107,487 Potential Seats Available

Forecast to Sell:60% of tickets in FIRST year (64,492)70% of tickets in SECOND year (75,241)80% of tickets in THIRD year (85,990)

Family Four Pack

Sections: 148, 150

324 (section 148)+150 (section 150) 474 Total Seats Available

81 Home games per season

474 x 81 = 38,394 Potential Seats Available

Forecast to Sell:60% of tickets in FIRST year (23,036)70% of tickets in SECOND year (26,876)80% of tickets in THIRD year (30,715)



Strategic Business Proposal - jwjarvisjr.fsbizsite.comjwjarvisjr.fsbizsite.com/wp-content/...FINAL.docx · Web viewThese ticket packages target nearly 40% of the local market and

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