Cpl final v5

SPORTSUMMIT USER CONFERENCE

SportSummit2009PARIS, FRANCE. CONFERENCE: SEPT. 18-20

Charlotte Professional

Lacrosse

Lacrosse is a High-Growth Sport

Lacrosse is the fastest growing team sport in the United States with 10-year growth rate of 137.8%

2/3 of lacrosse participants fall into the highly desirable marketing demographic of young Males <25 years old

40% of Participants come from affluent Families with Household incomes over $100,000 - compared to 25.8% of the general population

(c)charlotteprolacrosse.com 2

0

260

520

780

1040

1300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

US Lacrosse Participation 10-Year Growth Trend

Sporting Goods Manufacturers Association

Tho

usan

ds o

f Par

ticip

ants

And its positioned well to continue that growth

What was once a niche sport played primarily in the Northeast United States is now expanding across the country:

Growth in youth participation in newly fertile areas such as California and Minnesota have outpaced traditional strongholds like Connecticut over the past 8 years:

Connecticut +179% California +232% Minnesota +900%

High school lacrosse is now sanctioned in 21 states with Illinois becoming the 22nd in 2011

A record 60 teams will compete in the NCAA Division 1 men’s lacrosse championship this year (with 115,000 in attendance for the Final Four)

New division 1 college varsity programs are popping up in states like Alabama, Arkansas, Georgia and Wisconsin

3(c)charlotteprolacrosse.com

growing quickly in the carolinas

North and South Carolina just sanctioned high school lacrosse for the 2009/10 season

There are over 60 high school and middle school boys and girls teams now in charlotte

- Nearly 1,900 participants

11 local men’s & women’s collegiate teams including Queens University, Davidson, Belmont Abbey and Pfeiffer University

Men’s and women’s adult club teams are just now being established in Charlotte


Lacrosse's growth in South Carolina reflects national trendUpdated 7/31/2008 9:28 PM

By Jim Halley, USA TODAY

GREENVILLE, S.C. — Shane LeCroy was a volleyball coach who never played lacrosse before he started coaching it at Greenville. DeAnn Louis, a parent who was frustrated that Riverside (Greer, S.C.) couldn't find a girls lacrosse coach, decided to coach and learn the game at the same time.

This past spring, LeCroy and Louis coached the boys and girls champions of the South Carolina Lacrosse League (SCLL). The league has grown from six high school teams in 2001 to an expected 32 boys teams and 28 girls teams next spring. The state's high school association will meet Friday to consider whether to officially sanction statewide play and state championships.

Rich Thomas, the commissioner of the SCLL, makes the sport sound as if it's fastest-growing transplant in South Carolina since kudzu.

"With lacrosse, even though all you may have initially is a die-hard group, it spreads very quickly," Thomas said. "It really combines the field strategy of soccer with the offense and defense of basketball, the physical contact of ice hockey and open-field excitement of football."

The growth of the sport in football-crazy South Carolina is indicative of how fast lacrosse is growing nationwide. According to the National Federation of State High School Associations, lacrosse has seen a 280% increase in participation in the last decade, making it one of fastest growing high school sports in that period.

In the first few years of the league, the South Carolina Lowcountry schools dominated. That changed shortly after Bill Harner, formerly the principal at Hilton Head Island, became the Superintendent of Schools for Greenville County and pushed for the sport at the club level.

"A lot of the athletic directors in the county didn't like the way he implemented it, but you have to give him credit," said Riverside boys lacrosse coach Brent Boling. "My former AD fought it, but when he finally let us on campus, we came in right behind basketball in revenue the first year on campus. I have 70 kids come out for the team every year and we keep about 30."

Advertisement

By Richard Shiro, The Greenville (S.C.) NewsRiverside High of Greer defeated Bluffton 21-17 for theSouth Carolina girls lacrosse championship in the spring.

Charlotte Professional Lacrosse LLC

Charlotte Professional Lacrosse LLC intends to take advantage of the sport’s growth potential in Charlotte by operating a men’s professional lacrosse franchise here.

5

2 viable options

(c)charlotteprolacrosse.com

Professional Lacrosse Leagues

6

The MLL is the premier outdoor professional lacrosse league in North America

Season is a 12-week season from mid-May to mid-August

6 team league: Boston, Chicago, Denver, Long Island, Toronto and Annapolis

League underwritten by New Balance chairman Jim Davis

The NLL is the premier indoor professional lacrosse league in North America

Season is a 16-week season from January through April

11 team league: Boston, Buffalo, Calgary, Denver, Edmonton, Minneapolis, Orlando, Philadelphia, Rochester, Toronto and Washington

Started in 1987 by midwest concert promoter Chris Fritz


MLL better option for charlotte market

Game presentation is more traditional

- Outdoor venues

- Uses traditional collegiate and high school rules (except there is a two-point goal line located 16 yards out from each goal and a 60-second shot clock)

May to August timing doesn’t directly compete with any other Charlotte-based major league sports

Cost structure is more favorable for MLL as venue costs are substantially lower (indoor vs. outdoor)


investment opportunity

Purchase operating rights to MLL franchise in Charlotte- Franchise fee (officially $1.5 million, but not really)- Fund operating costs - franchise will lose money in the near-term. Team will

eventually operate profitably but long-term revenue streams are unpredictable at best in sports (due to winning/losing vs. fan expectations)

Become an owner of the entire league- The MLL operates under a single entity ownership structure. Operating rights allow

investor to become part owner of league vs. owner of specific team

Multiple long-term exit options- Owning a piece of the league allows for two exit options:

* Sell team operating rights * League gets purchased


Single entity ownership

9

Single entity ownership allows leagues in their infancy/growth stages to contain player costs and market the league more effectively. It is also the structure currently preferred by larger leagues including the NFL and NHL - but their ships have already sailed. The single entity structure is preferred because it puts the league in a stronger position for the future with labor negotiations, merchandising sales contracts, broadcast rights negotiations and league and team marketing. The MLS is the largest sports league that operates under this structure. As an “owner” of the Charlotte team, investors would be part owner of the MLL league as a whole. League ownership percentage would depend on the number of teams for the 2011 season. One of the two following scenarios are likely for Charlotte’s entry into the MLL:

2 Scenarios

We would Purchase the chicago Machine team from the league and

move them to Charlotte keeping the league at an even 6 teams

We would be an expansion team with a Philadelphia counterpart and the league would expand to 8 teams.

Chicago would continue to operate under league control and travel to prospective markets for their

“home” games


Charlotte’s MLL team

Business to launch in July/August 2010

Start playing in May 2011

Games to be played in newly upgraded American Legion Memorial Stadium on the CPCC campus

Team should have some recognizable players on the squad as many of the MLL’s players hail from top southeast institutions including UNC, Duke, Maryland, and Virginia.

Potential for homegrown talent in the future


Capital Requirements & Proposed Schedule

(c)StartYourDoc.com 11

$ 500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$02010 2011 2012 2013 2014 2015

$1.5M

$500K

$250K

$250K

$250K

$250K

Capital requirements

$3.5 Millionincludes franchise fee and capitalization for

expected operating losses over the first 5 seasons


Important Milestones

12

May

‘10

June

‘10

July

‘10

Aug

‘10

Sept

‘10

Oct

‘10

Nov

‘10

Dec

‘10

Jan

’11

Feb

’11

Mar

ch ’1

1

April

’11

May

’11

Raise $$

CLT VIP Meetings

Launch PR

Launch Company

Hire Key Staff

Expansion Draft

Sponsorship Sales

STH Sales/Mkting

Group Sales/Mkting

Game Sales/Mkting

2011 Schedule Out

2011 Se

aso

n Kicks

Off




How Charlotte Pro Lacrosse Will Create Value



$ 500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$02010 2011 2012 2013 2014 2015

$1.5M

$500K

$250K

$250K

$250K

$250K

Leverage Three factors


Continued growth of lacrosse

long-term strength of MLL

charlotte’s Future growth

Long the Charlotte Metro

15

0

2,187,500

4,375,000

6,562,500

8,750,000

20102015

2020

2025

Estimated 500,000 additional people

123456789

1011121314151617181920212223242526272829303132333435

New York City New York City New York City New York City Los Angeles Los Angeles Los Angeles Los Angeles

Chicago Chicago Chicago ChicagoDallas/Ft. Worth Dallas/Ft. Worth Dallas/Ft. Worth Dallas/Ft. Worth

Houston Houston Houston HoustonPhiladelphia Atlanta Atlanta Atlanta

Atlanta Philadelphia Miami PhoenixMiami Miami Washington DC Miami

Washington DC Washington DC Philadelphia Washington DCBoston Phoenix Phoenix PhiladelphiaPhoenix Riverside/San Bernardino Riverside/San Bernardino Riverside/San BernardinoDetroit Boston Boston San Francisco

San Francisco San Francisco San Francisco BostonRiverside/San Bernardino Detroit Detroit Detroit

Seattle Seattle Seattle SeattleMinneapolis Minneapolis Minneapolis MinneapolisSan Diego San Diego Tampa-St. Petersburg Tampa-St. Petersburg

Tampa-St. Petersburg Tampa-St. Petersburg San Diego San DiegoSt. Louis St. Louis Baltimore OrlandoBaltimore Baltimore St. Louis Baltimore

Denver Denver Orlando DenverPittsburgh Orlando Denver Las Vegas

Portland. OR Portland, OR Las Vegas St. LouisCincinnati Sacramento Portland Portland

Sacramento Pittsburgh Sacramento AustinOrlando San Antonio San Antonio Sacramento

San Antonio Las Vegas Austin CharlotteCleveland Cincinnati Charlotte San Antonio

Kansas City Kansas City Cincinnati CincinnatiLas Vegas Charlotte Pittsburgh Kansas CitySan Jose Austin Kansas City PittsburghColumbus Cleveland San Jose San JoseCharlotte San Jose Columbus Nashville

Indianapolis Columbus Cleveland IndianapolisAustin Indianapolis Indianapolis Columbus

2010 2015 2020 2025


Long Lacrosse Here

16

Both North and South Carolina are embracing lacrosse at the high school level which is driving participation across the states

US Lacrosse has 4,800 members in North Carolina and about 900 of those are in Charlotte

Charlotte ranks as the #2 North Carolina market behind the Research Triangle but is ahead of the other local hotbeds of Winston-Salem, Greensboro and Wilmington (according to the North Carolina chapter of US Lacrosse)


Long MAJOR LEAGUE LACROSSE

17

Major League Lacrosse in its 10th season and is just now figuring things out. The initial owners had a quick-growth strategy that didn’t pan out. Too many teams operated on an underfunded basis and without sports business acumen. The League is now working to change that:

Jim Davis at New Balance is becoming more involved. Lacrosse sales are 10% of New Balance’s domestic business and he is personally vested in the league’s long-term success

NFL owners are increasingly looking at Lacrosse as filler for their venues now that MLS teams are moving to soccer specific venues. - Broncos Bowlen’s own the Outlaws- Patriots Krafts will come in within 5 years


Lacrosse will become viable as a pro sport this decade

18

Lacrosse is poised to continue its rapid growth across the United states and in Canada. Even with growth, it will still be a comparatively small sport in the US sports industry. That said, the elevated income profile of its core consumer significantly raises its ability to support professional sports leagues.

Sport 1999 Total Participants

2008 Total Participants 10-Yr Growth 2018 Projected

Participants

Lacrosse

Snowboarding

Mountain Biking

Skateboarding

Soccer

Tennis

Ice Hockey

Baseball

480,000 1,127,000 134% 2,640,000

3,600,000 5,900,000 64% 9,670,000

8,600,000 10,200,000 19% 12,097,000

5,800,000 9,800,000 69% 16,560,000

13,200,000 15,500,000 17% 18,200,000

11,200,000 12,600,000 12.5% 14,175,000

2,100,000 1,900,000 -9.5% 1,720,000

15,900,000 15,200,000 -4.4% 14,530,000


keys to business success

Run professional business operation with experienced sports management team

Find viable venue. Primary considerations: location, cost & amenities

Invest in revenue generating activities

Keep overhead and non-revenue generating expenses extremely low

Ingrain the team within the Charlotte community


Management team

Jim McPhilliamy - 20+ years sports management experience- Senior Vice President Marketing, Charlotte Bobcats 2007-2009- Partner in leading sports consulting firm Brandthink 2002-2007- Held senior positions at major agencies DraftWorldwide and Digitas- Strategic advisor to multiple sports entities including the Tampa Bay Rays, Pittsburgh

Pirates, Houston Rockets, the Atlanta Spirit (owners of Thrashers & Hawks), Minnesota Vikings, the NBA, Dale Earnhardt Inc. and more

Wade Leaphart - experienced sales executive- Top sales executive 2 years in a row for Charlotte Bobcats- Extensive nascar experience and relationships

Robert Carter - social media expert - Digital media specialist at Belk - Led Bobcats social and direct marketing campaigns


Venue: memorial stadium

21

Location is ideal. Centrally located on the outskirts of Uptown Charlotte within 30-minute drive time for over 50% of the lacrosse target market (20,000+ Charlotte households with kids in house and income > $200K)

Venue refurbished and reopening July ’10

City has already agreed to be our home stadium should team franchise be awarded

Lowest cost structure in the league at $6,900 per game for rental


becoming relevant in clt

CBS Radio group has already agreed to promote the team across their six stations on a revenue sharing basis

- #1 WPEG-FM (Urban)- #2 WBAV-FM (Urban/Adult Contemporary)- #3 WSOC-FM (Country)- #5 WNKS-FM (Contemporary Hit Radio/POP)- #11 WKQC-FM (Adult Contemporary)- #15 WFNZ-AM (Sports Talk)

CBS Radio also has agreed to “rent” us space at a steep discount within their office space

- Saves money- Gives us access to dj’s/talent on an unlimited basis

Sports Business Journal will do a recurrent reality feature on the business: good for sponsorship sales and attracting future investors


Who Will Come

23

35% Core

Casual Lacrosse Affluents

Fickle Entertainment Seekers

Family/Group Fun

Hardcore Lacrossers

20%

20%

25%

This group comprises 55% of attendees but

represents 75% of ticket revenues

Although this group only represents 25% of

revenues, they make or break game day

atmosphere

Sold via direct sales

24

There are an estimated 2,236 youth-to-collegiate school players in the Charlotte market. These kids play for their varsity, junior varsity, middle or grade school teams. There are an additional 315 post-collegiate members of US Lacrosse in Charlotte (according to the NC Chapter of US Lacrosse).

In total with the addition of clubs/academies factored in, we estimate there to be 3,000 core lacrosse players (a core player is one who plays frequently - 25 or more times per year) in Charlotte representing approximately 2,650 households. Based off school team rosters and through some pretty easy research, we should be able to identify and contact each and every one of these household directly once the team launches.

We expect this target audience to grow rapidly in the Charlotte market at about an 8-10% annual rate for the foreseeable future. This is important because this group will comprise our season ticket base. To launch successfully, we need to sell 1,000 tickets per game to this group. That equates to 312 season ticket accounts at an average of 3.2 tickets per account (which is the norm for sports subscriptions on a STH-basis).

That is a penetration rate of around 12% and is within the realm of possibility with a sport with this much passion tied to it.

Hardcore LacrossersThese educated and wealthy families send their children to the best private and public schools in the Charlotte metro area. The children of these families have been exposed to lacrosse at school or elsewhere and play recreationally either in school or for fun but are not considered core fans of the sport (They play under 25 times per year).

These families have household incomes > $200,000 and index high on lifestyle characteristics that parallel lacrosse lifestyle characteristics (index high on travel, snow skiing, sailing/jet skiing, and skateboarding). Charlotte has about 21,000 of these families. 12,000 live within a 30-minute drive time of Memorial Stadium (the 30-minute drive time is an important indicator of likelihood of attendance for casual fans of a sport).

We have already purchased the mailing list for this group from InfoUSA. This group overlaps with the core fan demographically, so we estimate approximately 2,000 less households in our target silo here - 10,000 total.

We need to sell approximately 575 tickets/game to this group to start. This will be a combination of season ticket sales and single game offers. Since this group is less passionate about the sport, the average size of their purchase will likely be 2.5 tickets per game. Therefore, we will require 1,380 purchases over the coarse of the season. We estimate this to be about 750 total customers from this group - a penetration rate of 7.5%. That is an aggressive number but there are many targets from the broader 21,000 group that live outside the fringe of the 30-minute drive time that will also come to games on less frequent basis. With them included, we believe we will have to do business with about 5% of this target group in total.

Casual Lacrosse Affluents


influenced via marketing

25

These families and individuals are looking for entertainment options for their tribe on weekends and throughout the week. These families have a wide income profile ($50,000 - $200,000 annually) but are driven by price/value regardless of where they fall.

There are 92,500 of these families in the Charlotte metro and we estimate a conservative 40% - or approximately 37,000 - live within a 30-minute drive time of Memorial Stadium. These families are best reached through promotional offers via timely and targeted advertising.

We need to sell approximately 575 tickets/game to this group to start. This will be a combination of group sales and single game promotions. Since this audience will be targeted for group sales (groups of 10 or more), the average size of their purchase will likely be closer to 4 tickets per game. Therefore, we will require 750 customer purchases over the coarse of the season. That equates to a penetration rate 2% - which is reasonable given our access to existing group lists and our advertising relationships. Again, we expect some roll-over attendance from people who are in this target demo but outside the 30-minute drive-time boundary.

Family/Group FunThese young, post collegiate singles are looking for fun. They have entry-level to mid-management corporate jobs and have disposable income that will find its way to events, venues and happenings that are deemed “cool enough.”

There are about 74,000 total people in this group within a 30-minute drive time of Memorial Stadium. - 62,000 singles with an additional 12,000 or so married couples without children. This group will travel a little farther than other target audiences to attend a good event.

This is a fickle group that may come for a while and then disappear. That said, it is one of the most important groups because they add to the event‘s atmosphere making it cooler for everyone else.

We need to sell approximately 700 tickets/game to this group to start. This will be a will be almost all single game ticket sales. Since this audience is primarily single, they may come as a group, but they purchase individually. Therefore, we will require 4,000 customer purchases over the coarse of the season from this group. That equates to a penetration rate 5.4% - which is tough to hit. That said, we have already reached agreement with CBS Radio on a revenue sharing arrangement that will promote Charlotte Pro Lacrosse across their 9 different radio stations to help us reach this hard-to-get target group. Attracting this group is the focus of most of our advertising and social marketing efforts.

Fickle Entertainment Seekers


How Many Will Come: Year One

26

2008 2009 2011

Denver

Boston

Washington

Charlotte

Toronto

Long Island

Chicago

9,310 8,431 8,000

4,762 4,665 4,500

2,914 3,200 3,300

3,300

N/A 2,596 3,000

2,430 3,405 3,500

2,911 2,569 N/A

League Attendance

Projected

% of PaidAttendance

#/Per Game

Hardcore Lacrossers

Casual Affluents

Family/Group Fun

Fickle Entertainment SeekersComps

(League, Sales, & Other)

35% 1,000

20% 575

20% 575

25% 700

N/A 450

TOTALS 100% 3,300


How Many Will Come: Long-term Growth

27

Memorial Stadium is a 15,000 seat venue. Success down the road would necessitate upgrades to Memorial Stadium or a change of venue. Both good scenarios if they should occur.

Year Attendance Ticket Revenue

2011 (6 home games)

2012 (6 home games)

2013 (7 home games)

2014 (7 home games)

2015 (8 home games)

2016 (8)

2017 (8)

2018 (8)

2019 (8)

2020 (8)

2021 (8)

2022 (8)

2023 (8)

2024 (8)

2025 (8)

17,100 $381,480

19,878 $424,920

27,083 $556,063

31,815 $650,956

42,152 $952,963

46,080 $1,050,000

51,216 $1,200,000

57,040 $1,343,000

63,752 $1,515,000

71,440 $1,741,000

79,296 $1,945,000

88,024 $2,155,000

98,585 $2,415,000

109,424 $2,680,000

121,465 $2,975,000


revenue streams: ticket-driven business

28

$0

$250,000.00

$500,000.00

$750,000.00

$1,000,000.00

$1,250,000.00

$1,500,000.00

$1,750,000.00

’10/’11 ’11/‘12 ’12/‘13 ’13/‘14 ’14/’15 ’15/’16 ’16/’17

7-Year Revenue Projections

Single Game TicketsLuxury/Premium SeatingNon-Premium Season TicketsGroup SalesConcessions & ParkingMerchandise SalesCorporate PartnershipsCamps & Clinics

$551,157$654,301

$854,065*

$1,009,804*

$1,414,325**

= 70%

= 14%

= 16%

* 14-game seasons$1,592,008**

$1,830,744**

** 16-game seasons


Creating value: Long-term view

29

The MLS launched in 1996 with 10 teams. They had six tough years and then started growing through a series of youth development initiatives. 15 years and an estimated $350M later (in team/league losses), the MLS is expected to become profitable this season. Expansion teams are now selling in the $50M range.

Team Value to Revs Value Revenue Operating Income

Los Angeles Galaxy

Toronto FC

Chicago Fire

FC Dallas

New York

DC United

Houston Dynamo

Colorado Rapids

Real Salt Lake

New England

Chivas USA

Columbus Crew

Kansas City

Team Avgs

2.8x $100 million $36 million $4 million

2.6x $44 million $17 million $2.1 million

2.6x $41 million $16 million -$3.1 million

2.6x $39 million $15 million $.5 million


2.7x $35 million $13 million -$3 million





2.4x $24 million $10 million -$1 million



3.1x (2.8 med) $37m ($33m) $13 million -$1.5 million(c)charlotteprolacrosse.com



$ 500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$02010 2011 2012 2013 2014 2015

$1.5M

$500K

$250K

$250K

$250K

$250K

Long-term valuation

15-years Out

$3.5M-$4.5M in Annual Revenues

$10M - $12 M Valuation




$ 500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$02010 2011 2012 2013 2014 2015

$1.5M

$500K

$250K

$250K

$250K

$250K

MY COMMITMENT

20% of franchise fee


$200,000 or 20% of the negotiated franchise fee

REINVEST IN THE TEAM BY FORGOING TEAM PRESIDENT’S SALARY FOR the first THREE YEARS

Team Presidents for minor/secondary league sports don’t make much but this will still save a lot in relation to the entire budget. I will forgo the President’s salary of $250,000 a year for the first three years reducing required capital costs $750,000.

10-year value projections vs. invested capital

32

$0

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$7,000,000.00

$8,000,000.00

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Title

Invested CapitalTeam Valuation

(Valuation based on 2.8x Revenues)




OVERview of team financials

Revenue Projectionsapproach5-year Revenue detailTicket Sales & PricingSponsorship Sales Merchandise SalesCamps & Misc

USES OF CAPITALFRANCHISE FEEStart-Up CostsBusiness Operations overviewSales, General & Administrative LAX OperationsGame Operations Marketing & Promotions

financial projections approach

Conservative revenue approach- Estimate what I really think on sales (and I’m a pessimist) - sales goals will exceed

these estimates

Fully fund all cost centers regardless of trade or in-kind expectations

- Budget for all expense items even if I think they are obtainable at a discount and/or through in-kind trade

Better to under-promise and over-deliver


Revenue Projections Overview

35

Conservative Projected Revenues

Optimistic Projected Revenues


’10/’11 ’11/’12 ’12/’13 ’13/’14 ’14/’15 ’15/’16 ’16/’17

Single Game TicketsLuxury/Premium SeatsNon-Premium Season TicketsGroup SalesCorporate PartnershipMerchandise SalesCamps & ClinicsTOTAL REVENUES

Sales, General & AdminLAX OperationsGame Operations

Marketing & Promotions

Misc, Camps & Clinics

TOTAL EXPENSES

+ Franchise Fee Payment

$120,000 $130,000 $165,000 $185,000 $280,000 $305,000 $340,000$171,000 $171,000 $199,500 $223,860 $255,840 $255,840 $281,600$133,000 $160,000 $225,000 $270,000 $440,000 $530,000 $635,000$45,360 $56,700 $82,688 $103,359 $157,500 $160,000 $168,000$96,000 $151,200 $198,100 $234,670 $289,219 $345,755 $385,787$24,000 $28,000 $33,000 $40,000 $45,000 $50,000 $55,000$20,972 $26,214 $32,768 $40,960 $51,200 $64,000 $80,000$610,332 $723,114 $936,056 $1,097,849 $1,518,759 $1,710,595 $1,945,387

$28,800 $33,600 $39,600 $48,000 $54,000 $60,000 $66,000

$663,294 $719,635 $752,706 $844,377 $909,389 $963,463 $1,028,177$355,250 $356,210 $388,457 $390,537 $424,862 $429,021 $433,180$148,050 $159,690 $186,122 $204,435 $240,692 $247,921 $256,704$100,050 $106,765 $126,606 $134,220 $171,702 $158,144 $170,730$19,923 $23,593 $27,853 $32,768 $38,400 $44,800 $52,000

$1,286,567 $1,365,893 $1,481,744 $1,606,337 $1,785,045 $1,843,350 $1,940,791

-$676,235 -$642,779 -$545,688 -$508,488 -$266,286 -$132,755 $4,596

-$250,000 -$125,000 -$125,000 -$125,000 -$125,000

-$926,235.17 -$767,778.94 -$670,688.31 -$633,487.74 -$391,286.19 -$132,754.65 $4,596.09

$1,708,928.26 $2,024,720.32 $2,620,955.40 $3,073,978.25 $4,252,525.20 $4,789,666.00 $5,447,083.60

$151,705.50 $176,815.90 $194,213.25 $228,657.40 $235,524.95 $243,868.80

REVENUES

EXPENSES

OPERATING PROFIT/LOSS

CAPITAL REQUIREMENTS

’10/’11 ’11/’12 ’12/’13 ’13/’14 ’14/’15 ’15/’16 ’16/’17

Single Game TicketsLuxury/Premium SeatsNon-Premium Season TicketsGroup SalesCorporate PartnershipMerchandise SalesConcessions & ParkingCamps & ClinicsTOTAL REVENUES




TOTAL EXPENSES

$99,000 $108,900 $139,755 $153,731 $232,792 $256,071 $281,678$126,120 $126,120 $147,140 $170,100 $194,400 $194,400 $220,800$111,000 $133,200 $186,480 $223,776 $368,271 $441,926 $530,311$45,360 $56,700 $82,688 $103,359 $157,500 $160,000 $168,000$72,000 $114,000 $143,760 $175,168 $221,097 $268,896 $320,223$20,520 $23,854 $32,496 $38,177 $50,578 $55,300 $61,457$56,186 $65,313 $88,978 $104,533 $138,487 $151,416 $168,275$20,972 $26,214 $32,768 $40,960 $51,200 $64,000 $80,000$551,157 $654,301 $854,065 $1,009,804 $1,414,325 $1,592,008 $1,830,744

$413,294 $469,635 $502,706 $844,377 $909,389 $963,463 $1,028,177$393,250 $394,210 $429,624 $431,704 $469,195 $473,354 $477,513$148,050 $159,690 $186,122 $204,435 $240,692 $247,921 $256,704$100,050 $106,765 $126,606 $134,220 $171,702 $158,144 $170,730$19,923 $23,593 $27,853 $32,768 $38,400 $44,800 $52,000

$1,074,567 $1,153,893 $1,272,911 $1,647,504 $1,829,378 $1,887,683 $1,985,124

-$523,409 -$499,592 -$418,846 -$637,700 -$415,053 -$295,675 -$154,381

$1,543,240.26 $1,832,044.00 $2,391,380.71 $2,827,450.02 $3,960,110.38 $4,457,622.78 $5,126,082.18

REVENUES

EXPENSES


TEAM VALUATION

Ticket Sales: ticket sales by type

36

Denver Boston Washington Toronto Long Island Charlotte(projected)

Season Tickets

Group Tickets

Paid Attendance

Comp Tickets

Avg. Ticket Price

Avg. Revenue/Game

1,685 1,485 1,111 487 245 960

1,185 1,547 113 310 173 840

5,168 3,912 1,720 1,346 1,450 2,850

3,263 753 1,480 1,250 1,955 450

$14.90 $16.40 $13.89 $27.72 $13.91 $22.31

$76,981 $64,151 $23,894 $37,304 $20,160 $63,580

Tickets By Type (per game)

3

4

2

1

3

* rank in league

3


Ticket Sales Projections

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(Annual Growth Rate)


Sponsorship Overview

38

As with most sports leagues, there are rules on restricted and non-restricted commercial partnership categories. Restricted categories are non-sellable at the local level as the league reserves those rights on a national basis. This is because they believe the rights are worth more collectively. The following categories are currently restricted at the MLL league level thought there is some give-and-take depending on circumstances:

Airline Apparel/FootwearBeveragesQSR RestaurantsIce CreamCredit cardsInsurance

Tourism Personal Care ProductsOTC MedicationsAnti-smoking/Drug OrganizationsComputer gamesAutomobiles

Financial services Internet servicesLacrosse equipmentOvernight delivery servicesPersonal accessoriesTelecommunications(c)charlotteprolacrosse.com

Sponsorship Overview

39

Given league restrictions, initial sponsorship sales will rely on established relationships with local clientele

Once a demographic profile of our audience is established, we will leverage access to our core audience to garner new high-end accounts

We will consciously position our brand to attract the city’s emerging energy sector


Sponsorship Annual Projections

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2011 2012 2013 2014 2015 2016 2017

# of Games

Renewals

Renewal $$$/game

Renewal Revenues

New Sales

New Sale $$$/game

New Sales Revenue

Total Accounts

Total Revenue

Revs per Account

Assumptions

- Renewal Percentage

- Escalator per year

6 6 7 7 8 8 80 4 6 7 8 9 10

$12000 $12667 $14376 $15924 $18425 $20684$48000 $76000 $100632 $127395 $165823 $206843

6 5 4 4 4 4 4$2,000 $2,200 $2,420 $2,662 $2,928 $3,221 $3,543$72000 $66000 $67760 $74536 $93702 $103073 $113380

6 9 10 11 12 13 14

$72000 $114000 $143760 $175168 $221097 $268896 $320223

$12000 $12667 $14376 $15924 $18425 $20684 $22873

75%10%


Merchandise

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Merchandise represents a small but important part of the Charlotte Pro Lacrosse budget. Although insignificant financially, the more people wearing our gear - the more free marketing we receive. The following represents sales estimates and assumptions for merchandise:

Based on a $3 per cap (Boston’s 2009 per caps) and 50% margin on goods sold

2011 2012 2013 2014 2015 2016 2017

Paid Attendance/Yr

Show Rate

$1.50/Attendee

17,100 19.878 27,083 31,815 42,152 46,080 51,216

80% 80% 80% 80% 80% 80% 80%

$20,520 $23,854 $32,496 $38,177 $50,578 $55,300 $61,457


Camps & Clinics

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Camps & Clinics can be divisive within a city’s lacrosse community since it can easily be perceived as infringing upon others livelihoods. More research on how to best approach camps & clinics in the Charlotte market must be done prior to any type financial analysis. That said, margins are about 20% for daytime/commuter camps/clinics and 30% for overnight camps. Entry strategy may be to “endorse” existing camps and provide players in return for a percentage of the revenues. This is an income/expense item that requires more exploration and may take time to grow into.


Use of capital: Four primary expenditures

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$0

$250,000.00

$500,000.00

$750,000.00

$1,000,000.00

$1,250,000.00

$1,500,000.00

$1,750,000.00

$2,000,000.00

’10/’11 ’11/’12 ’12/’13 ’13/’14 ’14/’15 ’15/’16 ’16/’17

7-Year Cost Projections

Lacrosse OperationsGame PresentationMarketing & PromotionsSales, General & AdminFranchise FeeMisc, Camps & ClinicsStart-Up Costs

$1,236,567 $1,315,893

$1,431,744*

$1,806,337*

$1,985,045**

= 36%

= 53%

* 14-game seasons

= 8.5%

$1,843,350**

$1,940,791**

= 2%= .5%

(c)charlotteprolacrosse.com ** 16-game seasons

Franchise fee: Timing is right

44

The league is “officially” asking for $1.5 for new franchises. They are also interested in upgrading the current state of ownership in the league in three ways:

Bring in people who have pro sports management backgrounds/experience

Bring in groups that will conduct the proper due diligence and properly capitalize their franchise

Bring in groups that show interest in participating in Lax United Marketing (the league’s broadcast arm)

EXPECTED ACTUAL

FRANCHISE FEE:

$1,000,000


additional consideration

45

LUM has been spun off and granted to rights to produce and deliver all MLL games and to market and produce certain national and international events that would be associated with MLL. This is a similar structure to the MLS where broadcast rights are housed under the Soccer United Marketing banner.

As a team owner, we have the right to purchase ownership units in LUM. LUM is expected to lose about $1M this season and will probably lose similar sums in the future. Jim Davis and New Balance are currently covering all these costs. In my opinion, the upside is at least a decade away. That said, a reduction in the franchise fee is worth some due diligence some serious consideration with LUM.

The League offices are preparing financial information for Charlotte Pro Lacrosse to review.

LAX United Marketing


STart-up costs: $40,000

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SALES, GENERAL & ADMINISTRATIVESALES, GENERAL & ADMINISTRATIVE $413,294 $469,635 $502,706 $844,377 $909,389 $963,463 $1,028,177

2011 2012 2013 2014 2015 2016 2017Salaries & BenefitsSalaries & Benefits $300,094 $359,319 $389,296 $726,581 $781,589 $839,382 $900,625

President/GM $0 $0 $0 $275,000 $285,000 $300,000 $315,000VP, Business Development $100,000 $108,000 $116,640 $125,971 $136,049 $146,933 $158,687Sr. Director Marketing $55,000 $59,400 $64,152 $69,284 $74,827 $80,813 $87,278Director Operations $35,000 $36,750 $38,588 $40,517 $42,543 $44,670 $46,903Sales Manager $30,000 $31,800 $33,708 $35,730 $37,874 $40,147 $42,556Sales Associate $19,000 $20,140 $21,348 $22,629Sales Associate $18,000 $19,080 $20,225 $21,438 $22,725 $24,088Intern $9,000 $9,000 $9,000 $10,000 $10,000 $12,000 $12,000Sales Commissions & Bonus Pool (avg. 5% of sales) $17,750 $30,525 $36,880 $45,406 $60,448 $69,674 $81,981Payroll Taxes, Workers Comp, etc.) $30,844 $36,684 $39,756 $45,767 $50,415 $54,789 $59,515Health Insurance $22,500 $29,160 $31,493 $39,681 $42,855 $46,284 $49,987- # of people covered 5 6 6 7 7 7 7- cost/person per year $4,500 $4,860 $5,249 $5,669 $6,122 $6,612 $7,141

Operational ExpensesOperational Expenses $59,200 $54,696 $56,121 $58,789 $67,022 $61,481 $63,073Rent $18,000 $18,540 $19,096 $19,669 $20,259 $20,867 $21,493Computers & Copiers $10,000 $3,000 $3,090 $3,183 $10,000 $3,000 $3,090Office Supplies $6,000 $6,180 $6,365 $6,556 $6,753 $6,956 $7,164Postage/Shipping $1,800 $1,854 $1,910 $1,967 $2,026 $2,087 $2,149Cel Phones $6,000 $7,200 $7,200 $8,400 $8,400 $8,400 $8,400Telephone $3,600 $3,708 $3,819 $3,934 $4,052 $4,173 $4,299Travel $9,000 $9,270 $9,548 $9,835 $10,130 $10,433 $10,746Meals & Entertainment $1,800 $1,854 $1,910 $1,967 $2,026 $2,087 $2,149Meetings $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582

Other Operational ExpensesOther Operational Expenses $54,000 $55,620 $57,289 $59,007 $60,777 $62,601 $64,479Insurance $18,000 $18,540 $19,096 $19,669 $20,259 $20,867 $21,493Accounting Fees $12,000 $12,360 $12,731 $13,113 $13,506 $13,911 $14,329Legal Fees $15,000 $15,450 $15,914 $16,391 $16,883 $17,389 $17,911IT Fees $3,000 $3,090 $3,183 $3,278 $3,377 $3,478 $3,582Misc. $6,000 $6,180 $6,365 $6,556 $6,753 $6,956 $7,164


This business does not require large fixed-cost start-up expenditures and as such most of the first-year expenses that could be considered “start-up” are covered in the Sales, General & Administrative annual budget. Several exceptions:

Legal Fees associated with forming the business ($15,000)

Graphic Design for team logo, uniforms and business ($15,000)

Printing of stationary, business cards, and other business related stationary ($2,500)

One-time set-up/purchase charges for technology, phones, printers, etc. ($5,000)

Miscellaneous deposits and expenses ($2,500)

Expense Projections Overview

47

Optimistic Cost Projections

Cost Projections


’10/’11 ’11/’12 ’12/’13 ’13/’14 ’14/’15 ’15/’16 ’16/’17

Single Game TicketsLuxury/Premium SeatsNon-Premium Season TicketsGroup SalesCorporate PartnershipMerchandise SalesCamps & ClinicsTOTAL REVENUES




TOTAL EXPENSES

+ Franchise Fee Payment

Annuity Factor (2%)

Value of Franchise

$99,000 $108,900 $139,755 $153,731 $232,792 $256,071 $281,678$171,000 $171,000 $199,500 $223,860 $255,840 $255,840 $281,600$111,000 $133,200 $186,480 $223,776 $368,271 $441,926 $530,311$45,360 $56,700 $82,688 $103,359 $157,500 $160,000 $168,000$72,000 $114,000 $143,760 $175,168 $221,097 $268,896 $320,223$20,520 $23,854 $32,496 $38,177 $50,578 $55,300 $61,457$20,972 $26,214 $32,768 $40,960 $51,200 $64,000 $80,000$539,852 $633,868 $817,447 $959,031 $1,337,278 $1,502,032 $1,723,269

$413,294 $469,635 $502,706 $844,377 $909,389 $963,463 $1,028,177$355,250 $356,210 $388,457 $390,537 $424,862 $429,021 $433,180$148,050 $159,690 $186,122 $204,435 $240,692 $247,921 $256,704$100,050 $106,765 $126,606 $134,220 $171,702 $158,144 $170,730$19,923 $23,593 $27,853 $32,768 $38,400 $44,800 $52,000

$1,036,567 $1,115,893 $1,231,744 $1,606,337 $1,785,045 $1,843,350 $1,940,791

-$496,715 -$482,025 -$414,297 -$647,306 -$447,767 -$341,318 -$217,522

-$150,000 -$150,000 -$150,000 -$150,000 -$150,000

-$646,715.17 -$632,025.34 -$564,297.07 -$797,306.12 -$597,766.83 -$341,317.54 -$217,522.30

1 0.9804 0.9612 0.9423 0.9238 0.9057 0.8375

-$646,715.17 -$619,637.64 -$542,402.34 -$751,301.56 -$552,217.00 -$309,131.30 -$182,174.93

-$1,266,352.81 -$1,808,755.15 -$2,560,056.71 -$3,112,273.71 -$3,421,405.01 -$3,603,579.94

$1,511,584.26 $1,774,830.40 $2,288,850.87 $2,685,286.78 $3,744,379.38 $4,205,689.91 $4,825,152.12

3133000 3735400 $514,991.45 $604,189.53 $842,485.36 $946,280.23 $1,085,659.23

250000 245100 240300 735400 750000

-0.38656894109 -0.395553764 -0.443029061 -23.63% -0.24098137555

22.50% 3% deal together 3% deal together 560000 $280,497.07

REVENUES

EXPENSES


CAPITAL REQUIREMENTS

Sales, General & Admin expenses


LAX operations expenses


Game operations


Marketing & Promotion


7 Year pro forma P & L


53

Contact information

Jim McPhilliamy

[email protected]

c 917-822-3600

o 704-333-4600

Cpl final v5

Documents

Transcript of Cpl final v5