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Gil Giles has a passion for softball and wanted to turn his passion into his second career. After retiring from the police force he decided to invest at least $2.8 million (including borrowing $1.7 million) in building a six field sportsplex. Although the research and the numbers did not support his decision, his passion was so strong that he decided to take the risk. While he enjoys the thought of owning a sports facility, the reality of day to day management and paying the bills is another story. This case study examines the financial and strategic underpinning for building the facility. From analyzing potential revenue streams and expenses to the profit margin for concession goods, Gil will need to pinch every penny to make his facility financially viable. Luckily he hired a manager to help run the facility, but if he had several rain-outs, or fails to attract the leagues he hopes for, his financial plans could be ruined. Is it ever safe to have a business model with such thin margins?
Fried is a Professor and Chair of the Management of Sports Industries program at the University of New Haven, West Haven, CT.