by Latoya Burnham
In order for it to be viable, especially in the current tough environment, the business model of Kensington Oval Management Inc. has to change and will, if management has its way.
Chief Executive Officer Ben Toppin has lots of plans for KOMI, where he said one of the issues is that it is a cricket stadium intended to be a multipurpose facility and with that comes a unique set of challenges.
But he maintained that they were equal to the task, which had to begin with a change in the business model of the company.
Just last weekend, as the CEO ushered in a new initiative called cage cricket with Founder and Director of the UK-based Catch Project, Sheromie Brewster, Toppin said one of the keys was building on spectator experiences for games like cricket, and even introducing new elements that can add to that.
But he said, as a multipurpose facility, it could not all be based on cricket.
Comparing KOMI with outdoor stadiums, primarily in the US, he said they were looking to see what elements were missing, mainly with the integration of technology and trying to factor those into the business.
“We were set up as a facilities management company that makes its money from renting some space here, renting some space there. That business model will not work. I don’t see how it ever could have worked because there is a lot more to the operations here, tethered to an event, than the space you rent.
“There are lots and lots of services. Actually space is such a small part of the expense of putting on an event that it is not funny. So we actually make less revenue than most other people. On a return on investment basis, we are at the bottom of the rung,” he pointed out to Barbados TODAY.
Toppin said in entertainment, people who provide sound systems, stages, the entire production side, made more money than KOMI did for the events held there.
“A production that costs $40,000 to put on, maybe pays $5,000 in rent. So we in the wrong business, no? It was put to me that maybe your business is not viable. Maybe, maybe not. If we can see that we are renting to a promoter who then has to put in a stage that cost $10,000; we rent space at $5,000 and then the promoter spends $10,000 on the stage, we in the wrong business. We should be renting the stage, not the space.
“So if I give him the space free, he’s spending $15,000, give him the space free and charge for the stage, I double my revenue. He cuts his by about 30 per cent, I double mine. With a little bit of capital, we’d be ready to go. It really is pretty simple. The focus has been on the wrong aspect of the business totally.”
The real money to be had, the CEO maintained, was in the value added services like furniture and fixtures, food and beverage and production. Essentially, he said, KOMI should be a one-stop-shop for everything clients needed for events.
“We are going to get there eventually, but it is just that the timing is bad, but we are going to get there eventually. We will take some baby steps, contract certain services, so that when a promoter comes he doesn’t have to worry about that, we will give it to him at a cost less than if he went to the open market and he will have that contact on the back end.
“We should be in a position to do everything from ticketing to security, to the production set-up itself. We just have to phase them in one after the other depending on which – pick the low hanging fruit and move forward. The bottom line is the business model has changed, it is changing.”
But even though changes are happening, he confessed that there were elements that needed changing that were definitely too entrenched to do easily. For example, he said, it made no sense renting six suites and then having each client bring their own catering, then for the facility to have to deal with the nightmare of handling the health issues and permits with regard to each six. Additionally, he said there was no reason why the facility should be renting furniture it could otherwise own and then rent out when not in use, hence creating another revenue stream.
Stressing that he was not being critical of any of his predecessors or any management teams before, he said at this point it was about examining what was in place and refining the model to move forward in keeping with what the market needed.
“Even if we had kept the stadium here at Kensington Oval to preserve the name and started with a clean sheet of paper, we might have been better off because there are a lot of issues we have to grapple with that came out of the World Cup set up that is unfortunate, without going into a lot of details. We know what we have to do. Our goals are clear. Getting there is a bit difficult because of the timing, the economy and the need to change so many things from business model back down to facilities,” said Toppin.
Call to alter Kensington Oval's business model - by Barbados Today August 20, 2013 Article by
Barbados Today Published on
August 20, 2013
August 20, 2013
by Latoya Burnham