How Long Can The Tournament Circuit Last?
Axe Throwing Tournaments Don’t Make Money – Organizers Are Lucky To Break Even
There is a certain grumble I cringe over that comes up every so often in our community. An Axe throwing tournament is announced, an organizer has put up a prize pool and blocked off their venue from public bookings. Announcements are made to the community. What is the next thing for certain? The belly aching about the registration price.
This happens no matter the affiliation. Both in WATL and IATF. Now, some are a bit outrageous from what has become the standard registration vs prize pool, or a sliding scale prize pool. But I think there needs to be some understanding behind this. When I see a venue put something like this out there, I see fear. A Place that wants to host an axe throwing tournament and showcase their venue, but has crunched the numbers and sees that this event is actually going to COST them money to host. Others with a larger sized prize pool are either serious about the sport, or don’t know what they don’t know, yet.
Players demanding a super low registration fee AND a high prize pool. How long can the economics of this model last?
Tournament Classifications – What is a Major or Minor Tournament?
I’m not sure what constitutes a Major or Minor Axe Throwing Tournament, but I believe it would have to do with Prize pool and the draw. We host a monthly tournament at Choppers called the Turnpike Strike! which is limited to 24 players. I would consider these minor tournaments. They are intended for fun and practice. Smaller set prize pool of $450 – $500. Registration price $42. However, they have 2 skills competitions and a double elimination tournament. Our Major axe throwing tournament this year had almost the same thing. There were 3 skills and a double elimination tournament.
Choptober is no question a “Major” axe throwing Tournament. With 256 Competitors this year, I don’t think there is a question of it’s classification. The Urban Open is 128, again a major. There is also Outrageous, The Canadian Open, US Open, and Throwdown are a few of the others. Some of these only being 64 players could still be considered majors.
More importantly, why does the major or minor tournament matter? I dont know that it does. The economics are the same, just on a different scale. Prize Pool vs Registration price, coupled with the venue size are the thing to look at here.
Registration Price and Prize Pools
Prize Pools are expected to be a few thousand dollars. These pools are put up by the owners. From their pocket, before they can try to recoup any of that money. They are committing to this before knowing that anyone will come. That can range from $1k – $50K for the 2019/2020 IATC. The amount of throwers doesn’t vary that much, and neither does registration price. Not relative to the spread in prize pool. There is a ceiling throwers will pay, but yet it seems those same throwers want higher and higher prize pools. Or do they? Are the venues and organizations just flexing or thinking that the prize pool is what is going to attract players to register? Probably a combination of both.
I wrote about my theory in paying deeper into the brackets because I truly believe this will change the game. It is obvious other places are not of this same mindset yet. I just saw another axe throwing tournament announce a $3000 prize pool. $2500 first place, $300 Second and $200 for 3rd. That’s it, 4th place and beyond is out of luck. Registration for this tournament is $80. The top 3 throwers also get a highly sought after bid to the World Championship. That alone, in my opinion anyway, is a HUGE prize. Making more of my case of that pool being spread deeper and giving others a chance to recoup travel costs would make more people want to participate.
The existing normal / going rate for registration for a tournament is between $40 and $70. This does not include skills. Not all tournaments have skills, but those that do charge around $20 per person, per skill.
The Economics of Axe Throwing Tournaments
Registration Revenue – How much will the tournament generate to cover the prize pool?
Lets use a tournament with the hopes of drawing a 128 player field. Lets take an existing acceptable registration of $60. It should be easy enough to complete 3 skills games in this time. I don’t know that everyone would participate, but lets assume they did. DAMN! That’s over $15K. Psh, the prize pool is “Only” $10K, they are making BANK! Yeah… Mmkay
The Venue’s Expenses – How much could it possibly be?!
Let’s start expenses with something I don’t believe many people factor into their complaints. Loss of venue revenue. For arguments sake, this venue is hosting 128 Person Tournament and 2 skills, I would have to assume they are a fairly large venue having around 20 targets. The event is more than likely on a Saturday to draw the most competitors that it can. I would have to imagine a good ballpark number they are giving up is in the area of $10K, but more than likely, it’s more.
These tournaments don’t set themselves up. They don’t have people that know how to score them that don’t want to be in them. There are a variety of costs for things expected at major tournaments that all cost money and add up REAL fast. Some others are Wood, Trophies, Novelty Checks for pictures, photographers and a slew of other larger expenses. There are minor expenses that get added in as well. Toilet paper, hand soap, paper towels… Hell, a roll of paper towels for a commercial dispenser is like $10!
In The scenario we are talking about, I am seeing around $31K in expenses when factoring in the loss of revenue and the Prize Pool. That is inclusive of a 10% adjustment DOWN for over-estimating because I am sure skeptics will just say the number is high. It also doesn’t include any rental needs and assumes nothing additional needed to be purchased in order to pull the tournament off.
Sponsors. What about Sponsors for the Tournament? Surely that offsets costs.
Sure, let’s talk about sponsors. Remember, there aren’t business knocking on our doors to see how they can get involved. It takes a LOT of time reaching out and convincing sponsors to participate. (That labor number isn’t noted on the expense file.) They are also businesses, not our Grandmother or Great Uncle who would give us money blindly. They want to know what they are going to get out of giving us money to sponsor this tournament. Let’s think about that.
The pitch is going to be to who, Nike? Redbull? A local Restaurant or Pizza Place? A Brewery? A Major Bank? All of the big ones have departments for this exact thing. You don’t really stand a chance in getting them to sponsor.
And what is the pitch? “Hey there is going to be 128 people coming and there are going to be like 100 people watching the stream”. Really? Go Pound sand is what they will say. The local brewery doesn’t have distribution around the country, so what do they really care? How about the local restaurant or other business. “Hey, there are about 80 people coming in from out of town. None of them will come in your business because they are staying at an AirBnB 30 minutes away because they are really coming to town to be with other people they see on social media.” I am sure that restaurant owner will break a leg diving over their desk for their checkbook to support the event.
Don’t think this is the case? If you think or know you can do it, I have a job for you. You are HIRED! 100% Commission based. Reach out and I will get you started.
Charity Partners – Why do we have them?
Being a good business means we have a social responsibility. Partnering with a Charity or Non-Profit Organization is being socially responsible. This doesn’t come at no cost. Although we have everyone participate in assisting the partner, the venue donates a good portion of the proceeds and the sponsorship money that we are able to secure. So even being able to secure a sponsorship for the axe throwing tournament, the venue is not the sole recipient of the funds. This expense does not show up on the expense formula previously posted, but it IS a “cost”.
Player Costs – Travel Expenses
This can’t be left out when talking about tournaments. There is a REAL cost for players. I totally get it. Air fare isn’t cheap, nor is gas and wear & tear on your vehicle. Time off of work where you are not getting paid, but rather spending money. The registration fees. Cool new merchandise or an axe from someone who was at the tournament. Rooms and food and beers… it all adds up. Look, I recognize these expenses just as much as you guys that have to spend them do. You sacrifice to make it to these tournaments, and I for one appreciate and acknowledge this.
Wait. There is more revenue! What about the bar and merchandise?!
Good question. Yes, places that sell alcohol will have an advantage by being able to recoup more of their loss through Bar sales and merchandise. Let’s dive into that for a second. So for this 128 person tournament, there are a few spectators and a few non-drinkers. Some who won’t drink until they are out, and others that don’t take an axe out of it’s sheath until they have a White Claw in their hand. This is going to average out to about 3 drinks per person. For our example, I am going to go with 4 drinks.
From a merchandise standpoint, players are typically given a t-shirt for participating. From our history, I would say 1 in 5 players will buy an additional shirt. Again, I will exaggerate the sales and call in 1 in 2.
Now remember, both of these revenue numbers are not factoring in bartender labor or product costs. Your product cost for the bar is about 25% and Merchandise is closer to 50%. This is assuming your product is not event specific, meaning it is still able to be sold at full retail after the event.
Let’s sum it all up.
So after detailing out all of the revenue opportunities and expenses, where are we? Everyone had a great time. Smiles all around. Can’t wait for the next one! Or can we? Players will raise hell if registration for them goes up. Venue is left with a loss on the books. How many more of these can we all do? Who is willing to keep putting big axe throwing tournaments on? This particular virtual tournament lost $13K before making a donation to charity and not able to secure any sponsorship money.
Where Does This Leave Us – What Is The Future?
Talking numbers isn’t the fun part of tournaments. I couldn’t even begin to tell you how many times I have heard the term “Axe Family”. Sometimes as an owner, I feel like the parent who has a 35 year old living in my basement, not paying rent or contributing to bills but complaining that it’s total Bu#@!*%t that there is no ice cream in the freezer!
Taking the same tournament, not having any sponsors and changing the registration to $100 from the original $60 would bring the event SO much closer to breaking even. It is no longer a loss for the day, but just makes it a bad day for sales. Something MUCH easier to swallow for venue owners.
Is there a direct cost to the players? Yes, absolutely. At the same time, as our axe family continues to grow, more and more of these tournaments will still pop up, or continue to happen. It cannot sustain long term under the current “norms” and expectations. That being said, we also can’t (as venue owners) ever look at these events as money making events and charge out the wazoo for registration.
/ End Rant
If we all want the sport to continue growing, we all need to do the things we may not like to help it along. It IS a family. Family’s DO fight, a lot sometimes. At the end of the day, we all love each other and want the best for the other. Maybe the combination of a higher registration fee to offset venue costs with paying deeper in the brackets to get more players in the money is the answer to sustaining.
Next time a tournament is announced, don’t just fly off the handle about the registration price. Understand some of the economics around them. Be happy one of the “parents” are taking you on vacation. An influencer or want-to-be influencer addicted to social media likes and responses that fills this need by bashing a tournament registration price, doesn’t move our sport forward. The sports role models we all looked up to as kids set examples for us to follow. Lets not set examples of hindering the growth of our sport. It is toxic and doesn’t belong.