garfield Posted March 21, 2013 Share Posted March 21, 2013 Things like Beyonce concerts.... monster truck pulls... whatever sort of stadium or arena events you could imagine. On the corporate side... you name it... anything that occurs in a convention center, arena, whatever. DCI has experience running large scale stadium events. Absolutely pointless to use this only for drum corps events, where there is no money. Oh, I get it now. I thought you were talking about DCI providing performing units ala BD's. Aren't there now organizations that organize these events? What event management expertise can DCI bring to those events which are so far removed from what DCI knows? 1 Link to comment Share on other sites More sharing options...
kickhaltsforlife Posted March 21, 2013 Share Posted March 21, 2013 Can't disagree with any of this - it's really common sense. However, Mr. Hopkins thinks of himself as a business and marketing guru, and he has the college course credits to prove it. The other directors, for years, placed their faith in him to lead the activity, and he is one of their own, purportedly keenly aware of what drum corps of all stripes need to survive and thrive. </snip> We all know that doesn't mean squat.... There are people who have never taken a "business" course in their lives and are better at it than people who majored in it. Not even gonna get into all of the certified teachers out there who don't belong anywhere in an educational environment..... Link to comment Share on other sites More sharing options...
danielray Posted March 21, 2013 Share Posted March 21, 2013 However, Mr. Hopkins thinks of himself as a business and marketing guru, and he has the college course credits to prove it. He actually doesn't. He has a pretty realistic perspective here. I actually had this exact discussion with him a few weeks back about this very point. The other directors, for years, placed their faith in him to lead the activity, and he is one of their own, purportedly keenly aware of what drum corps of all stripes need to survive and thrive. Huh? No one is falling in line behind George. He just tends to be the one doing a bit more speaking, because I guess he has a bit thicker skin and can take the arrows. Also, many don't agree with him on a lot of things... but agree on other higher-priority issues that are more critical to align on now. I'm sure you'll understand and appreciate the apprehension on the part of the directors in accepting the guidance of someone from the outside. Sure, I agree with you that it must be done, but you're asking member corps to vote to remove themselves from the process and blindly follow someone from the "outside". No. Not suggesting anyone follows anyone else. Suggesting that someone that has a proven track record in the events space, on a scale well beyond DCI, would come in and take care of the operations... so corps can focus on doing what they do without having to really get into the kitchen of DCI. They just focus on running their own orgs, doing their thing and receiving checks. What is the approach to them to give them the confidence that the next guy (or team) who brings proposals, controversial or not, are trustworthy in a way NOT like the G7 leaders? Let's be realistic here... if someone that had experience growing running an event group or some other sort of business on the scale of $30-50M, guys would be stupid to not just sit back, shut up and hand him the wheel. 1 Link to comment Share on other sites More sharing options...
garfield Posted March 21, 2013 Share Posted March 21, 2013 How it would work... All IP assets (brand, video archive, etc.) is transferred from the current DCI, Inc. to a new for profit entity that is wholly owned by DCI, Inc. I have no problem with this. 100% of shares of DCI, Inc. are sold to an investor for a nominal sum. In return, investor agrees to a guaranteed minimim level of compensation paid to DCI, Inc. on a specific timescale (easing the cashflow problems). "...compensation paid to DCI..."? Are you talking about serializing investment such that the initial is but one of the serial payments and the follow-on investments represent the total investment by the investor? How does this work in real life when investors are looking for a substantial ROI? Cash up-front is in anticipation of future cash flows, discounted at a required ROI rate to represent present value dollars. Serialized investment is generally made from cash flow from operations, plus investment amount, but you suggest the investor will operate at a loss for the initial years. I'd sure like to see this math on paper because I can't make the math work for an investor who's looking for an ROI even over a serial period. Investor doesn't get into the mess of how that money is actually distributed, just writes the checks to DCI, Inc. which distributes it how they will. "Writes checks" based upon an annualized expected ROR that provides him with a margin of safety in addition to the expected ROR. What cash flow does DCI provide over a timeframe that has a hope of making such an investment attractive enough to a potential investor? DCI has limited assets to sell to sponsors. The most common metrics for DCI's corporate partners are: • Live impressions – people through the turnstile (±375k) • People participating on the field (±5k) • Eyeballs and clicks on the website (various) • Downloads and subscriptions to the Fan Network (various) The issue here is stabilization. Now individual organizations have predictable and guaranteed cashflow (consider that it wasn't revenues, but cashflow .... air in the hose... that caused difficulties for groups like Teal, Glassmen, etc.). ALL financial issues are based on cash flow, Dan, so your observation is not a unique view. The question is: Where is the cash flow going to come from that provides an investor with a competitive ROR plus a margin of safety to justify his investment in "marching band"? The investors then have a very strong incentive to grow the business. There is also vey strong incentive to reinvest increased earnings into improving the level of individual corps. Greater competition makes it more interesting and further increases the marketability, sponsorship potential, etc. The investor has a strong incentive to grow the business just to make back his investment. What metric allows him to make a return on his investment? The future of drum corps is sponsorship driven... and is not lead by music brands, but consumer brands that have a strong interest in the youth market. Impressions are purchased usually at a cost per thousand. Depending on the medium, this CPM could range from pennies to nickels and quarters... but at the end of the day, we just don't have enough impressions in any category of the existing business model to enable us to go after the big guns. When Mountain Dew sponsors this year's Dew Tour, they'll be plunking down $8-10 million per year for the title sponsorship... and the property (owned by NBC Sports' Alli Sports division) is estimated to be worth $40 to $60 million dollars. We have a hard time attracting top dollar for title sponsors at even ONE of the "Premier Events." It's pretty simple to do the math: How much can you charge someone on a per-head basis for an attendance of 8k? 12k? If a sponsor is used to spending pennies per impression, it has to be a pretty incredible offering (or serious emotional engagement) to get them to cough up serious money to sponsor one of our events or the entire tour. Also, the key here is an investor that can not only tolerate, but will expect losses for some time. It is not something that will turn around in only a couple of years. Will need reinvestment of increased revenues for a bit. No matter how you slice it, an investor is going to expect a ROI over the time commitment, say 10 years. Where does that return come from? Increased participation —> More families in attendance —> More impressions to deliver to sponsors = more value to sponsors = more money to DCI = more opportunities for all. Sponsors really don't care how good the corps are... they care about impressions. It's a clear-cut case of "the game" vs. "the business." General Effect scores, opaque judging systems... it's all wonderful and irrelevant to someone who wants to put their product in front of the largest possible number of people. Every time we lose a performing group, the bottom of the pyramid crumbles a little more, and the audience shrinks... thereby diminishing the opportunity to expand the sphere of influence. 3 Link to comment Share on other sites More sharing options...
garfield Posted March 21, 2013 Share Posted March 21, 2013 He actually doesn't. He has a pretty realistic perspective here. I actually had this exact discussion with him a few weeks back about this very point. And he said what? That he doesn't know what to do? Please. He's had this manifesto brewing for more than a decade. He also likens himself to be a good salesman, too. Let's be realistic here... if someone that had experience growing running an event group or some other sort of business on the scale of $30-50M, guys would be stupid to not just sit back, shut up and hand him the wheel. You mean someone like, oh, I don't know, Bill Cook? And we all know how that turned out. I run a business twice the size of what you quoted. Would they be stupid to not listen to me? Their egos don't allow such things, Dan, and any potential "investor" will smell that from a mile away during just the first meeting with them. How does one convince a narcissist to not be one? 1 Link to comment Share on other sites More sharing options...
Stu Posted March 21, 2013 Share Posted March 21, 2013 (edited) How it would work... All IP assets (brand, video archive, etc.) is transferred from the current DCI, Inc. to a new for profit entity that is wholly owned by DCI, Inc. 100% of shares of DCI, Inc. are sold to an investor for a nominal sum. In return, investor agrees to a guaranteed minimim level of compensation paid to DCI, Inc. on a specific timescale (easing the cashflow problems). Investor doesn't get into the mess of how that money is actually distributed, just writes the checks to DCI, Inc. which distributes it how they will. The issue here is stabilization. Now individual organizations have predictable and guaranteed cashflow (consider that it wasn't revenues, but cashflow .... air in the hose... that caused difficulties for groups like Teal, Glassmen, etc.). The investors then have a very strong incentive to grow the business. There is also vey strong incentive to reinvest increased earnings into improving the level of individual corps. Greater competition makes it more interesting and further increases the marketability, sponsorship potential, etc. The future of drum corps is sponsorship driven... and is not lead by music brands, but consumer brands that have a strong interest in the youth market. Also, the key here is an investor that can not only tolerate, but will expect losses for some time. It is not something that will turn around in only a couple of years. Will need reinvestment of increased revenues for a bit. D-Ray... you are the person who states over and over again that the drum corps activity is, and I quote, "just kiddy marching band activity"! Now you are attempting to construct a profound for-profit business scenario which will entice a multimillion dollar investor to invest in that same "Kiddy Marching Band Activity". So where are you lying to us? Is it a lie that DCI is just a kiddy marching band activity? Or, is it a lie that this activity is a product which should be a multimillion dollar for-profit business investment? Edited March 22, 2013 by Stu 1 Link to comment Share on other sites More sharing options...
garfield Posted March 22, 2013 Share Posted March 22, 2013 (edited) Increasing marching members from 150 to 200, one of those ideas eminating from the Seven. 50 new members times 7 corps is 350 new members. The equivalent of 2-plus new corps under current rules. Dues, at $3,500 each, equals more than $1.2million, the equivalent of two "mid-tier" corps in today's dollars, or one "Star"-type-funded corps. How about the Seven pony up $175,000 each and start two, new corps? Call them what you want - "DCI's Best", or pick a new name for each new corps. Both would be sponsored, mentored, grown, and driven by staff from the Seven until they're on their feet and self-sufficient, which wouldn't take long as each corps would be a $700m corps out of the blocks (150 members x $3500 in fees plus $175,000 "seed" money from the Seven). Which would be a better vehicle from growth of the activity? 200 members in existing corps, doing the existing tour, with just more headaches (imagine a school board asked to house 1400 kids instead 1000), or two additional corps allowing an expansion of the tour and performing more shows in front of more fans? If the Seven are not willing to pony up to pay a leader who might issue edicts contrary to what the Seven want, could they be convinced to use their 200 member idea to, instead, actually grow the participation rate and activity? Edited March 22, 2013 by garfield 2 Link to comment Share on other sites More sharing options...
CQuinn Posted March 22, 2013 Share Posted March 22, 2013 Maybe DCP should make a new forum called "Guys who think they know better than everyone else" and put this and every other thread like it there? It could be a mecca for 4 or 5 posters and the rest of us wouldn't have to sift through all off this. 2 Link to comment Share on other sites More sharing options...
garfield Posted March 22, 2013 Share Posted March 22, 2013 Why can't DCI and ALL of the corps invest in a new shared tech infrastructure and get an MLB/NFL-style online universe created... so the teams and the "league" can aggregate visits/eyeballs/impressions/etc. I can't imagine a scenario, however, where this is going to happen, even though it would likely mean increased revenues for everyone. In any other league you can name, all of the teams would be rowing in the same direction. Here, the competitive game rules all. And as long as that competitive game is allowed to be the dominant divisor between corps, there is no hope that the activity can come together to row in the same direction. 1 Link to comment Share on other sites More sharing options...
garfield Posted March 22, 2013 Share Posted March 22, 2013 Maybe DCP should make a new forum called "Guys who think they know better than everyone else" and put this and every other thread like it there? It could be a mecca for 4 or 5 posters and the rest of us wouldn't have to sift through all off this. Sure, that's fine. So long as it's called "Guys who think deeper about the future of the activity instead of just b-itching about electronics and hula-hoops." Plenty of other threads here for you to visit that don't require you to "sift through all of this". Try one of those. 7 Link to comment Share on other sites More sharing options...
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