Midterm 10/17 Flashcards
What 3 needs do PAV’s meet that justify the investment of public funds
- Social stimulus for “Quality of Life”
- Economic stimulus for “Multiplier”
- Source of Community Pride
A community built and operated PAV is to be 3 things:
Net income generator
Break-even operation
Subsidized operation
What is the most common form of public assembly facility financing structure.
Public Ownership
What is the most common form of ownerships and why?
Public Ownership/Public Employees because public bodies finance, construct, and manage the majority of PAVs
The ten most common ownership entities of public assembly facilities
- City
- County
- State/Providence
- Authority
- University
- Non-Profit Corporation/Foundation
- Resident Company
- Sports Team
- Private Promoter
- Private Corporation
To be effective all forms of governance and management should be
philosophically entrepreneurial and seeking a profit.
The financial performance of a PAF depends on several factors, such as, but not limited to:
Competition for other facilities Capacity Rigging capability Willingness to take financial risk Labor rates Cooperative media
What is an option for a PAV when selecting a mgmt. system
private mgmt
Private management agreements are usually entered into to potentially help improve the bottom line financial position of a PAF
Increase operating revenue
Decrease operating expenses
Increase attendance
Increase ancillary revenue
Reasons that governmental entities decide to privatize the management of a PAF
- Overcome bureaucratic controls
- The demand for more event activity
- The need for investment dollars
- Increase events
- Decrease financial losses
- The need for experienced professionals to open a new facility
A private management agreement for a PAF usually includes
the potential for earning incentive income if the company exceeds predetermined financial and operational benchmarks.
A trend in PAF management
professional sports franchises to own and manage the facilities they play in.
8 Common operating dynamics
- Event booking and scheduling
- Event management
- Parking, traffic and transportation
- Crowd management
- Ticketing
- Advertising, marketing and sales
- Concessions and catering
- Facility maintenance and operations
Executive Director’s/General Manager’s ultimate goal
To keep the system of governance mindful of the facilities mission, goals and objectives, especially in difficult economic times.
The Executive Director/General Manager has a unique responsibility to manage both up and down the chain of command
- Manage up with your governing body
* Manage down with your direct report staff and those you supervise
The challenge for all public assembly facilities
organize for success
the public assembly facility manager must manipulate variables such as
time, space, monetary resources, and staffing
The highest variable that will determine the success or failure of a PAV
Quality MGMT
five common management functions
- Administration – People & Organization
- Sales and Marketing – Selling Time & Space/Event Activity
- Fiscal Management – Financial Performance
- Facility Services and Operations – Physical Plant/Event Management
- Ancillary Services – Revenue Sources
Good managers tend to be
- People-oriented and inquisitive
- Eager to learn and apply new management and business principles
- Intensely devoted to fulfilling their job responsibilities
In today’s competitive environment, successful managers must also be:
- Intelligent
- Knowledgeable
- Persistent
- Flexible
- Ethical
- An excellent motivator and leader of superior staff
used to evaluate the manager’s and facility’s success or failure.
bottom-line financial data
IAVM
International Association of Assembly Managers
professional association for any person who is actively engaged in the management of a public assembly facility
Active Members
Allied Members
Associate Members - Academic Faculty
Associate Members – Student
The vision of the IAVM
”IAVM is the acknowledged leader in the public assembly facility management industry.”
the two primary commodities of the public assembly facility
Time and space
As a facility manager, your inventory is
available dates (avails) and space.
The importance of event booking in a PAF can be categorized by the following phrases:
•Quality of life
•Putting the facility “on the map”
Meeting the facility’s financial projections
•Cultural enhancement
•Helping to fill hotel rooms and tourist attractions
Two key ingredients to successful facility management
- leverage
2. relationships
One of the most important tools used by a General Manager to insure the success of a public assembly facility
the scheduling calendar.
The number one administrative priority for a PAF manager
book the facility
the overall number one priority of a PAF manager
safeguard the customers, entertainers, teams and employees.
A promoter may reserve space in a facility at three distinct levels
- Tentative
- Confirmed
- Contracted
‘date protection” policy
When governing bodies institute scheduling criteria requiring a reasonable degree of separation between similar attractions
Marketing in in the context of public assembly facility management
the process of searching out and identifying potential business for a facility.
Two primary types of marketing for a public assembly facility
- Marketing of the facility to the industry
2. Marketing the events to the community
In terms of sales and marketing, the 3 purposes of a PAF
- Enhance the quality of life
- Generate direct and indirect economic impact
- Allow its citizens to “see and enjoy” sports and entertainment in a safe and comfortable environment
4 Advantages from an In-house AD agency
- The ability to place ads at a lower rate
- The ability to secure better ad placements in both electronic and print media
- The ability to receive timely assistance on short notice
- The ability to get free promotion spots
6 Types of Premium Access
- Premium Seating
- Luxury Suites
- Party Suites
- Courtside Seats
- Club Seats
- Personal Seating License (PSL)
6 Types of Commercial Rights
- Naming Rights
- Pouring Rights
- Advertising Signage
- Facility Sponsorships
- Memorial Gifts
- Branding of Food & Beverage
what the facility gives back to the company purchasing commercial rights.
Fulfillment Obligations for all commercial rights
3 basic outcomes of ticketing
- Tickets were developed to serve as a form of access management…in a sense to count and control how many people enter a venue for an event.
- Tickets were also created and developed to serve as a method to count and calculate the amount of money collected based on the number of tickets sold.
- Tickets were created and used to value and designate a seating location.
2 basic tickets processes
- Operations
2. Sales
The term used by some law enforcement officials to describe the criminal offense that is perpetrated by scalping in states where the activity is illegal
victimless crime
a residual of the re-sale or scalping of tickets by people who have purchased the tickets from a primary, authorized source of ticket sales.
secondary market
Database MGMT
the collection and use of the information that can be gathered from tickets sales transactions
Information included in database MGMT
- Demographic information
- Ticket buying patterns
- Price sensitivity
Another name for Yield MGMT
Revenue MGMT
The practice of Yield Management or revenue management for a PAF involves
the manipulation of prices in order to price tickets and seating locations differently for different customers and different times throughout the tickets sales campaign.
the most important method used to deterime what type of PAF the community wants, what it can afford, and how large it should be
a feasibility study
The dynamic nature of the industry make staffing very difficult because the manager must be able to assemble an
“elastic” workforce in order to adjust to the different labor demands associated with each event.
The most common type of PAF ownership and management structure
Public Ownership with Public Management.
is there a standard, single form of organization within the PAF management industry?
no
The entrepreneurial manager knows how to
devise and implement marketing strategies capable of producing favorable financial results.
The successful manager is
- A team leader
- A consummate advocate of the facility
- Aggressive in striving to achieve goals
What is important to remember about time and space
the value of these assets and the perishable nature
The booking calendar and its inventory of dates must be closely managed with uncompromising integrity and accuracy to
maximize profitability and to minimize any negative client/tenant relations.
Prior to any event being scheduled, the facility manager must answer 6 common questions
- Is the event consistent with the facility’s values and expectations?
- Are the dates, times, and spaces being requested available?
- Does the event fit? (i.e. Is the facility large enough to accommodate the space requirements)
- Will the event conflict with any activities of the primary tenant?
- Can the facility staff meet the demands of the event? (i.e. changeover)
- Does the person seeking to book the space have the necessary experience, authority, and financial resources?
- Is the proposed event safe and legal? If not, can it be made safe and legal?
Controversy of a proposed event should not
result in an automatic rejection.
Disallowing an event deemed “inappropriate” may
be illegal or invoke the First Amendment of the U.S. Constitution.
Prospective tenants desiring a date being held by another event organizer or promoter might ask for
a second hold or issue a challenge for the date sought
Getting a promoter “on” or “off” a date requires
non-refundable deposits and a move to contracted status as quickly as possible.
a financial mainstay for PAFs
sale of premium seating
the customer (ticket holder) deserves the opportunity to
“see and enjoy” the event/performance.
cost accounting
a more for-profit, business oriented system of controlling revenue and expenses and used to determine the financial health
There five (5) typical operating budget formats
- Line Item Budget
- Incremental Budgeting
- Performance Budgeting
- Planned Program Budgeting System (PPBS)
- Zero Based Budgeting
Line Item Budget
the most commonly used format in PAF budgeting
incremental budgeting
referred to as the “fair share” approach
Performance budgeting
focuses on efficiency
Planned Program Budgeting System (PPBS)
evaluates programs vs. goals
zERO bASED bUDGETING
blends efficiency and improved policy making
The budget process and system used to project the financial outcome of a PAF with an uncontrollable event schedule and event outcomes is referred to as
Best case/ Conservative/ Worst case
four very useful financial management tools
- Income Statement
- Balance Sheet
- Detailed Operating Cash Flow Statement
- Capital Expenditures Statement
All financial statements must be in compliance with
Generally Accepted Accounting Principals, (GAAP)
PAF deals in cash in many aspects of their business operations, including,
- box office sales,
- parking collections,
- food and beverage sales,
- merchandise sales
One of the financial systems used to track the significant amount of supplies and equipment used in a PAF on a day-to-day and event-to-event basis
inventory control
the financial process that a PAF GM competes with the promoter or team to finalize the ticket revenue and event expenses after the event is over
The settlement
The most significant aspect of a PAF settlement begins with
negotiating a thorough and all inclusive contract.
The system used to set-up and control a negotiation process includes 6 STEPS
- Research and Preparation
- Relationship building
- Information gathering
- Strategy selection
- Negotiation to a BATNA and Win-Win
- Implementing and managing the agreement
The essential process that a PAF Manager must understand when legally managing the Human Resources of their facility
Due Process
The Due Process system includes (6)
- Position Announcement
- Accurate and complete Job Description
- Employee Manual
- Verbal Performance Review
- Written Performance Review
- Termination, if necessary
five (5) basic ways in which the PAF manages the risk in the environment
- Risk Avoidance
- Risk Assumption
- Loss Prevention
- Loss Reduction
- Risk Transfer
Risk avoidance
based on historical data and the safety of attendees, avoid booking the event, but with justification
Risk Assumption
assuming the consequences of a loss
Loss Prevention
activities utilized to lower the chance of a loss to make the occurrence of a loss less frequent
Risk Transfer
the original party exposed to the loss is able to obtain another party to bear the risk (i.e. insurance)
The most common method used by a PAF Manager to transfer risk during an event is to buy a blanket insurance policy to protect the PAF in case the tenant should fail to obtain insurance coverage is named for its acronym
Tenant User Liability Insurance Policy (TULIP)
When managing a PAF, everyone on the staff must remember, it’s all about the
experience
The PAF has two customers
- The entity that rents the PAF for an event (Promoter/Team)
- The customer who buys the ticket (Guest)
There are two basic types of primary revenue in a PAF
- Primary revenue (rent)
* Secondary revenue referred to as Ancillary Revenue
There are two basic types of ancillary revenue in a PAF
- promoter related
2. customer related
Promoter related rev
In-House Marketing
Television, radio, and print advertising
Utility fees
Labor charge-backs
Customer related rev
Ticket fees
Food and Beverage sales
Parking fees
The negotiated amounts of rent follow the 3 structures
- Rent as a percentage of gross ticket sales
- Rent as a percentage of net ticket sales
- Rent as determined by the number of people in attendance
five (5) areas in which a PAF can generate ancillary revenue by charging the Promoter or user of the facility for additional services
- In-House Marketing and Advertising Agency Fees
- Television and Radio Broadcast/Production Fees
- Utility Fees
- Labor Charge-Back Fees
- Equipment Rental Fees
(4) areas in which a PAF can generate ancillary revenue by charging the Customer for additional services
- Ticketing Service Charges
- Food & Beverage Services
- Merchandise Sales
- Parking, Traffic and Transportation Services
In-house operations advantages
Ability to retain control
Ability to retain flexibility
Ability to retain all financial control and profits
Private Contractor advantages
Capital Improvement investment
Use of proven systems and personnel
Provides liability protection
The PAF Manager must assess the infrastructure of the business environment of the PAF to determine whether of not to issue and RPQ and RFP for a Private Foodservice Contractor. Some of those items include
Analysis of labor pool Level of staff skill Staff training requirements Financial resources Capital equipment needs
The sale of alcoholic beverages in a PAF carries both
high risk (liability) and high rewards (profits).
PAFs are not allowed, by Federal Law
enter into an exclusive pouring rights agreement with alcohol purveyors.
trends in food & beverage operations include
Destination restaurants and lounges
Credit, debit, ATM and smart cards used for foodservice in the PAF
Locally made micro brewed beers
Four pour beer taps and plastic bottles replacing draft beer
Local, regional and ethnic foods
In-seat ordering from a cellular phone
three basic types of merchandising contracts in the PAF industry
- The flat rate fee
- The per-person fee
- The percentage-of-sales fee
There are a few important aspects of the parking, traffic and transportation services provided by the PAF Manager. They include
Limousine, Bus and RV Parking
Valet Service
Parking Lot Only Events
The basis for a successful, safe and secure event management process is
comprehensive planning.
The most critical aspects of the event management process are
The communication of pertinent details (dissemination of information)
The coordination of all event related details
One of the most important concepts and thought processes that a PAF Manager needs to understand is
they are not only the manager of the venue, but they are also the Event Manager on event days.
transparent event process
to plan and prepare in a way that both the performer and the audience are focused on their experience and are not subject to distractions.
what kind of approach should PAF manager use in the event planning process
proactive
event management philosophy that needs to be followed is
the same effort and attention to detail needs to be exerted on the smaller events that is put forth on larger events!
One of the key elements of event planning that is critical for the PAF Manager and their staff to focus on is
time sensitivity
The number one objective in every event employee’s job description and the focus of every event employee training session should be to
create an excellent event experience.
Creating safe and secure event staffing levels will depend on
Type of facility
Type of event
Anticipated audience
Demographics of customers
a well informed customer is usually
a well behaved customer
the production rider determines
the number of stagehands, riggers, loaders, and other back-of-the-house event personnel
determined by the PAF Manager
the front-of-the-house staffing levels
are two inseparable aspect of event management
Customer service and crowd management
Primary responsibilities of risk management include
Event Certificate of Insurance Proper contract administration Risk assessment Security and crowd management planning Emergency and crisis management
A typical assessment model includes
Asset assessment
Threat assessment
Vulnerability assessment
Risk analysis
one of the most difficult to manage and potentially the most dangerous areas to manage for a PAF Manager
The Operations and Event Services (OES) area
The OES area of a PAF has a number of tasks that occur before, during and after and event, including in between events. These are usually referred to as
Reconfigurations
Conversions
Changeovers
four (4) main functional areas in an OES department
Engineering
Maintenance and Housekeeping
Event Services
Trades
Three of the re-occurring themes that are especially applicable in the OES department are:
- This department serves two clients…the promoter/team and the customer/guest
- The department must function to a level that does not negatively affect the experience of the event or the guest. This is referred to as operational transparency.
- The safety and security of the promoter/performer/team and the customer/guest is a primary responsibility from the time they arrive on the property until they have departed the premises.
The number one objective of the OES department
the ultimate safety and security of everyone in the facility.
optimistic pessimism
“what if” thinking
A few of the organizations that enforce safety standards and codes in a PAF include
Storage of Hazardous Materials (HAZMAT)
Occupational Safety and Health Administration (OSHA)
Americans with Disabilities Act (ADA)
National Fire Protection Association (NFPA)
green management
This is an initiative that has grown out of the concern in our society to be more environmentally conscious.The initiative cuts across all segments of our commercial and domestic buildings, and includes the design, construction, renovation and operation of facilities.
LEED
Leadership in Energy and Environment Design. This initiative was established in 1994.
The Green Building Council (GBC) members continue to refine LEED using a system to rate compliance that includes six major areas
- Sustainable sites
- Water efficiency
- Energy and atmosphere
- Materials and resources
- Indoor environmental quality
- Innovation and design process
