COVID-19 & Coasters: Coronavirus Impacts on the Amusement Industry

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BGW absolutely will not re-open until June 11. It would be a hotspot for an outbreak and it would make the park look horrible if that happened.
 
BGWnut said:
That is interesting. Ultimately I think that we will see restaurants, bars, gyms, etc. open for a week or two before BGW or any other theme park reopens
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I think the roll out of things re-opening, if done properly, is going to start with some of the safest to least safe opening.

For example: Restaurants could do bars not open for walk in business, reservations only. Certain shops that are small enough being by appointment only. Apartment complexes going to showing by appointment only.

As we keep seeing sporting events push further and further out, I'm less and less confident in BGW or any park opening in a reasonable time. They're now talking about cancelling the NBA seas and NFL starting in October as opposed to September.
 
warfelg said:
I think the roll out of things re-opening, if done properly, is going to start with some of the safest to least safe opening.

For example: Restaurants could do bars not open for walk in business, reservations only. Certain shops that are small enough being by appointment only. Apartment complexes going to showing by appointment only.

As we keep seeing sporting events push further and further out, I'm less and less confident in BGW or any park opening in a reasonable time. They're now talking about cancelling the NBA seas and NFL starting in October as opposed to September.
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The key for any business to re-open is being able to social distance everyone and sanitize anything people touch between touches. For sports, I think that would be feasible with limited attendance (maybe 1/6 to 1/4 capacity). Sports actually don’t have high base operating costs, so even if they take a 50% or 75% haircut they can still make money at the temporary lower revenue and salary levels.

For BGW and other parks it‘s a question if they can make money at 1/4 capacity with double or more the staff needed to clean rides, restrooms, and eating areas constantly. My guesstimate is that ticket prices (and season passes) would need to be 2-3x or more what they currently are to make that work with that price fluctuating based on the day’s demand (i.e. weekends may be at 3-4x current prices to manage demand and bring enough income). The parks would use force manure to get out from the pass obligations and either offer refunds or offer to shift 2020 tickets and passes to 2021 for anyone who didn’t want to pay the higher prices since this is a temporary issue.
 
rswashdc said:
The key for any business to re-open is being able to social distance everyone and sanitize anything people touch between touches. For sports, I think that would be feasible with limited attendance (maybe 1/6 to 1/4 capacity). Sports actually don’t have high base operating costs, so even if they take a 50% or 75% haircut they can still make money at the temporary lower revenue and salary levels.

For BGW and other parks it‘s a question if they can make money at 1/4 capacity with double or more the staff needed to clean rides, restrooms, and eating areas constantly. My guesstimate is that ticket prices (and season passes) would need to be 2-3x or more what they currently are to make that work with that price fluctuating based on the day’s demand (i.e. weekends may be at 3-4x current prices to manage demand and bring enough income). The parks would use force manure to get out from the pass obligations and either offer refunds or offer to shift 2020 tickets and passes to 2021 for anyone who didn’t want to pay the higher prices since this is a temporary issue.
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There would actually be all kinds of legal issues with doing that with passes.
 
rswashdc said:
The key for any business to re-open is being able to social distance everyone and sanitize anything people touch between touches. For sports, I think that would be feasible with limited attendance (maybe 1/6 to 1/4 capacity). Sports actually don’t have high base operating costs, so even if they take a 50% or 75% haircut they can still make money at the temporary lower revenue and salary levels.

For BGW and other parks it‘s a question if they can make money at 1/4 capacity with double or more the staff needed to clean rides, restrooms, and eating areas constantly. My guesstimate is that ticket prices (and season passes) would need to be 2-3x or more what they currently are to make that work with that price fluctuating based on the day’s demand (i.e. weekends may be at 3-4x current prices to manage demand and bring enough income). The parks would use force manure to get out from the pass obligations and either offer refunds or offer to shift 2020 tickets and passes to 2021 for anyone who didn’t want to pay the higher prices since this is a temporary issue.
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Sports actually have a much higher overhead than most people think. Arena fees, staff, coaches, training staff, support, officials, scoretable, score keepers, court setups, equipment. That’s beyond player contracts.

Where sports “luck out” is they have TV and arena sponserships that can offset those costs where they don’t need a live crowd to help with that. For example, through the cap NFL and NHL rosters are paid through TV contracts. NBA and MLB have a certain amount of revenue sharing before ownership pays out of their own pockets. PGA is strictly done through event sponsors and TV revenue.
 
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warfelg said:
Sports actually have a much higher overhead than most people think. Arena fees, staff, coaches, training staff, support, officials, scoretable, score keepers, court setups, equipment. That’s beyond player contracts.
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These costs are quite low compared to the cost of salaries for players and highly paid coaches. For comparison sake it doesn’t cost a lot to execute a high school or lower division college game. The major sports leagues costs are driven by demand chasing limited supply of high skilled individuals, not because it costs a lot to put on a basketball or baseball game.
 
rswashdc said:
These costs are quite low compared to the cost of salaries for players and highly paid coaches. For comparison sake it doesn’t cost a lot to execute a high school or lower division college game. The major sports leagues costs are driven by demand chasing limited supply of high skilled individuals, not because it costs a lot to put on a basketball or baseball game.
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1- Can’t compare HS/D3 schools to professional leagues.
2 - The lower levels don’t cost a lot because someone else is paying it or because there are volunteers.
3 - They get higher level professionals because the revenue generated allows them to.
4 - Yes those costs are low compared to players and coaches. But they still cost a considerable amount.

Like even if you go by salaries average team doctor makes $200k a year and a team might have 4-5 of them, trainers at about $60k a year and you usually have about 7-8 of them. $50-60k a year for score keepers with about 10 a game. And then like I said don’t forget rent on arenas ($20k a night, most teams don’t own their arenas). Maintenance staff to work baskets, electronics. Don’t forget janitorial sanitizing everything.

All in all likely talking close to $1mil a game of overhead, not including any insurances.

Let’s take a PGA tour event. $7million to sponsor. Average winning pool of $4-5 mil. Now there’s also lots of sub sponsors, likely pulling up to total intake of $10-12 million. Even though lots of sponsors do work there’s still a high number of paid staff. I worked at a course that hosted a USWO. Operating fee for the course for the week was $1.2 million. That’s overhead the USGA had to consider outside of bleachers, staffing, scoring, facility operations, utilities. All things any sport needs to consider.

This isn’t as easy as turn up, flip the switch, good to go.

On the topic here, it’s not that easy for parks either. However the expense of sports can be covered in other ways that parks cannot do. Parks need people to be in them to open up. Hence why despite the high overhead sport can still operate but not theme parks.
 
warfelg said:
1- Can’t compare HS/D3 schools to professional leagues.
2 - The lower levels don’t cost a lot because someone else is paying it or because there are volunteers.
3 - They get higher level professionals because the revenue generated allows them to.
4 - Yes those costs are low compared to players and coaches. But they still cost a considerable amount.

Like even if you go by salaries average team doctor makes $200k a year and a team might have 4-5 of them, trainers at about $60k a year and you usually have about 7-8 of them. $50-60k a year for score keepers with about 10 a game. And then like I said don’t forget rent on arenas ($20k a night, most teams don’t own their arenas). Maintenance staff to work baskets, electronics. Don’t forget janitorial sanitizing everything.

All in all likely talking close to $1mil a game of overhead, not including any insurances.

Let’s take a PGA tour event. $7million to sponsor. Average winning pool of $4-5 mil. Now there’s also lots of sub sponsors, likely pulling up to total intake of $10-12 million. Even though lots of sponsors do work there’s still a high number of paid staff. I worked at a course that hosted a USWO. Operating fee for the course for the week was $1.2 million. That’s overhead the USGA had to consider outside of bleachers, staffing, scoring, facility operations, utilities. All things any sport needs to consider.

This isn’t as easy as turn up, flip the switch, good to go.

On the topic here, it’s not that easy for parks either. However the expense of sports can be covered in other ways that parks cannot do. Parks need people to be in them to open up. Hence why despite the high overhead sport can still operate but not theme parks.
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Right now the leagues have essentially zero revenue coming in. Putting on an event that brings in 20% of typical gate revenue (social distancing), 25-50% of sponsor revenue, and most TV revenue is a lot better than nothing. There are plenty of places where costs can be cut to offset the lower revenue number with salaries and payouts being the biggie. Yes, some top stars may balk at the lower pay, but the players on league minimums or barely making the cut will be happy just to have a chance to earn.
 
rswashdc said:
Right now the leagues have essentially zero revenue coming in. Putting on an event that brings in 20% of typical gate revenue (social distancing), 25-50% of sponsor revenue, and most TV revenue is a lot better than nothing. There are plenty of places where costs can be cut to offset the lower revenue number with salaries and payouts being the biggie. Yes, some top stars may balk at the lower pay, but the players on league minimums or barely making the cut will be happy just to have a chance to earn.
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That would mean renegotiations with the Players Associations. So good luck pitching that. The only thing covered by the leagues are players game checks under the salary caps/revenue sharing. Everything else is out of ownership pocket. They didn’t become billionaires and owners of franchises by operating at a loss all that often.
 
warfelg said:
That would mean renegotiations with the Players Associations. So good luck pitching that. The only thing covered by the leagues are players game checks under the salary caps/revenue sharing. Everything else is out of ownership pocket. They didn’t become billionaires and owners of franchises by operating at a loss all that often.
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No revenue = no revenue sharing and possibly claw backs from the players. Each sport is different and it depends how contracts are structured and guaranteed to renegotiate. The PGA could re-open without negotiation, NFL would have a lot of negotiating leverage over the players, other leagues it just depends.
 
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Not really surprised if that program includes any college students not in the country right now to be honest. I think although things might open up more within our country sooner than some make it out to be, I think international travel is going to take a bit of a hit. On top of that I think that they're going to have to do something with the housing for those students to make it more hygienic (not saying that it isn't, but my alma mater is already talking about reducing housing for students within a certain distance and doing all single occupancy rooms) to prevent spreads of illnesses.
 
It’s really starting to sink it that there’s a chance none of the Northern American parks open until 2021. I really hope I’m wrong, but I feel the gathering of thousands of guests everyday from all over the world where germs are easily transmitted just isn’t the best idea this year. If this worst case scenario does happen, I really hope the parks can recover.
 
This is an analyst's opinion today regarding Walt Disney Company...but I believe it reflects the hurdles all theme/amusement parks will be facing -

"We don't think Parks can get back to anything close to full capacity until testing and/or vaccines are far more ubiquitous," he wrote, and in his view, that means it could be 24 months before parks attendance normalizes. "We see the limiting factor as health-care technology as assets like Walt Disney World will either need to operate with social distancing in-place - significantly limiting capacity - or a vaccine will need to be widely enough available that the population will again feel safe in such a gathering," Cahall said. He argued that absent a health-care breakthrough, early reads from countries like Singapore, China, and South Korea indicate that social-distancing measures must remain to some extent even as countries get their COVID-19 outbreaks under control."
 
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