THE FANCHISE BLOG

The Fanchise ownership profile

So who is Fanchise for? Many think it’s only for the passionate sports fan. While that may make up the largest piece of the ownership pie, it’s not the only audience for Fanchise team ownership. Look at the chart (above) and also see where you fit in:

• FANTASY TEAM OWNERS: The passionate fan
  This typically falls into the “passionate” fan category. Fantasy team owners comb through paid content websites and magazine publications to build their draft strategy. It’s a big business that CBS, Yahoo!, ESPN, the Sporting News and many others have built business models around. For a typical fantasy owner, Fanchise provides a secondary opportunity to simply drafting players and putting in a weekly line-up. It allows you to take it many steps further and participate in the actual make-up of the team and the coaching staff. Your decision-making has a direct affect on what you see on the field.
  
  We envision the fantasy team owner to be the one who’s scouting and keeping a close eye on the other team. They’ll be the one who’s suggesting player acquisitions and heavily involved in the player personnel moves. They may be more interested in following the league stats and making recommendations on how to improve in various areas.
  
  
• THE CASUAL FAN: A silent partner
  There are fans out there who simply love the game. They’re not that involved in the day-to-day standings or records, but they know when their team is doing well. They enjoy casually following what is going on. There’s a place for these individuals in Fanchise. As we’ve said before there is what we believe to be a 20/60/20 breakdown in the Fanchise ownership characteristics. Twenty percent (hobbyists) will be very passively involved while another 20% (leadership) will be passionately involved in many aspects of the organization. The remaining 60% will be made up of individuals who are talented in a specific area and decide to focus their skills on a specific piece of the organization. Without the casual sports fan you’d only have season ticket holders, right? Without the casual sports fan you wouldn’t generate enough buzz to reach the masses.
  
  
• BUSINESS PEOPLE: Entrepreneurs
  As we all know the business of professional sports isn’t just about sports. To the owners of professional sports franchises it’s about business and profit first. What happens on the field is secondary in many cases. The business model for most professional sports leagues is not directly aligned with on-field success. For example, the Detroit Lions are not a bad business investment.
  
  Fanchise is different. On-field success will be directly tied to the franchise’s financial well-being. However, there is a critical need for each Fanchise franchise to have solid business leadership — especially as it builds to form an official organization (5,000 owners) and elects its board of directors.
  
  
• A GIFT FOR ANYONE: The hobbyists
  The real beauty of Fanchise is that it’s entirely up to the individual owner how much involvement they want to have in the organization. Anyone can purchase a share in a Fanchise and at $25 it’s a perfect and inexpensive gift for birthdays and holidays. Imagine buying your child a Fanchise share when they are born. Buy one every year until they go to college and imagine the long-term potential they have to share in a team’s profit and success.

So where do you fit into this picture?

The Fanchise refund policy explained

As we’ve soft-launched the Fanchise concept, a number of folks have ask the question: “What if this doesn’t work? Do I get my money back?”

That’s been a tough question to hear for a number of reasons. Our primary concern was that “what if this doesn’t work out?” isn’t typically the kind of question that runs through an entrepreneurial mind. We were reminded and faced with the reality that Fanchise isn’t all about business, it’s about the fan’s passion for sports and their desire to be involved — not necessarily on a business or investment level. Since this question kept coming up over and over, we knew It needed to be addressed and not in the “if it doesn’t work out, just like any other investment, you’re out of luck” approach.

That certainly isn’t the appropriate answer that the general fan wants to hear. Whether it’s $25 or $25,000 people don’t want to lose money; especially if they walk away with nothing — the potential if their team never makes it to or beyond the 5,000 owner level.

Being the optimistic visionaries that we are, we figured rather than answering what happens if this doesn’t work, we wanted to change the question a bit. What happens if I want my money back?

And here’s how that two-part answer unfolds:

1. Until your franchise reaches its 5,000 owner stage, any owner may receive a refund less the $5 administration fee. This $5 administration fee is non-refundable and is collected by the league for use in league development would remain with the Fanchise organization.
   EXPLANATION:  Prior to reaching the 5,000 owner mark, the franchise dues are placed in a team escrow account. Since these funds are not touched by the team or Fanchise it is feasible to refund investments during this phase.
   
   
2. Once 5,000 owners has been reached for a specific franchise, owners may not receive a refund after they’ve made their yearly investment. The next year they may elect not to renew their ownership stake.
   EXPLANATION:  When a franchise becomes real (amassing 5,000 owners) the elected board of directors is granted access to team funds and bank account. At that point business operations have commenced and money is being used to prepare the team for competition. Refunding owner’s investments at this point would be detrimental to the team’s operations and create a potentially disastrous environment in the event that a group of owners decided to “jump ship” at a critical time in the team’s infancy.

We hope this clarifies any confusion. At no point would money invested be kept by Fanchise if for whatever reason the league(s) fail to launch.

So how does a Fanchise acquire talent?

One of the most common questions I’m asked about Fanchise is how do we acquire players? Are we just going to be getting washed-up high school athletes?

There are thousands of former and aspiring professional athletes who are just on the cusp of getting an opportunity — whether it’s on a major or minor league level. All of those players have one thing in common and it’s not getting a big contract — they just want to play. Some catch on with a minor league club and some move to Europe or Japan to play organized ball.

The aggressive ones are constantly networking and in contact with minor league clubs looking for a chance, a tryout and an opportunity. It’s not unlike you seeking a job. If you are passionate about what you do, you have a hunger regardless of your age or talent level. And when the opportunities become slim, you just want to work.

You may be surprised to learn that players looking for an opportunity will actually contact your franchise; you won’t necessarily have to go out and find them. It’s all about a chance for them. Perhaps they’ll get noticed, but maybe they’ll get another opportunity to play a game they love.

So, no, you will not be looking for washed-up high school ballplayers, you’ll be attracting and seeking professional athletes. They’re out there and they’ll be looking for you just as much as you’ll be trying to find them.

Today’s fan experience is too cost prohibitive

Recently a couple of professional sports entities have allowed fans the opportunity to get a bit closer to the action. Unfortunately, the price tag usually prevents the great majority of the fans from participating.

The Dallas Cowboys have suites where fans (or, more accurately, CEOs of Fortune 50 businesses) can watch the players run out onto the field. Great experience. Almost like slapping them high-five as they run onto the field. This morning I read that the PGA is launching the PGA Tour Club. It’s a package that comes with a $200,000 initiation fee and a $39,000 annual membership. The membership includes stays at resort hotels and residences, greens fees and an opportunity to dine with PGA Tour pros. Sounds like fun, but with a price like that it’s certainly not something for the average fan.

And it would be impossible to price something like that so everyone could participate. The intimacy is restrictive. It would be impossible, so you eliminate willing buyers by making the price impossible to fork over.

These are just a couple of examples of what professional sports is trying to do to get the fan closer to the action. Their thinking is in the right direction. The solutions are too narrow focused. Unfortunately, the closer you get the farther away you get from your retirement savings. Heck for $239,000 a year you could probably pay Tiger Woods to be your friend without having to go through the hoops of the PGA. Right?

You always hear the common people snickering at the folks in the suites. I’ve watched games from the comfort of suites many times. Well, actually, I’ve never watched a game from a suite. I’ve been in a suite while a game’s being played, but I’ve never actually watched. There’s too much going on. The food buffet, the endless drinks, the socializing. The suite experience has never been a sit-and-watch type scenario. Suites are for entertaining, not watching. The same can be said for these new, highly-priced programs. It’s not so much about the fan interacting with the sport, it’s about the people interacting with others.

There’s nothing inherently wrong with that either. Many a business deal has been hammered out in the suites. But the thing is it all seems to come under the guise of fake fan involvement. Just like watching the Cowboys run onto the field from field level. Cool once, but really what is the big deal? When I first heard of that it reminded me of watching sharks behind the glass in an aquarium. Cool once, but how often can you stand and watch a shark swim by?