How Do Facilities Get Paid?

In accordance with the “partnership” concept, partner facilities are paid a full fifty percent (50%) of the Gross Profit realized from advertisements placed by Action Sports Advertising. Gross Profit equals Gross Revenues less Costs of Sales (i.e.: the profit realized after Costs of Sales Expenses have been accounted for). Costs of Sales Expenses are some of the same expenses a facility would typically incur in managing an advertising program on their own -- sales commissions, materials, installation and maintenance. Only Costs of Sales Expenses are subtracted from Gross Revenues; Action Sports Advertising absorbs all other administrative and overhead expenses on its own, after Gross Profits have been shared with partner facilities.

While this medium is typically sold to advertisers on an annual basis only (to smooth out seasonal fluctuations in attendance), payments terms are granted to advertisers on an as needed basis (semi annually or quarterly being the most common, although monthly is not unheard of). Accordingly, payments to partner facilities take place semi-annually, with shared Gross Profits for the six months previous being remitted to facilities on June 30th and December 31st of each year.

What Is The Revenue Potential?

Revenue potential can vary considerably from facility to facility. A number of factors, including facility attributes, local supply and demand, and overall economic outlook can affect revenues generated for a partner facility. Outlined below is an approximation of how much revenue a SINGLE PLAYING SURFACE might generate over a five year period.

Since Action Sports Advertising’s program is in fact an informal partnership, Gross Profits are shared equally between both parties. An important benefit of this revenue sharing arrangement is the fact that both parties benefit equally from any future rate increases. More importantly, since Gross Profits are shared equally between the two partners, it is as much in Action Sports Advertising’s best interests to see that the program is successful as it is in the partner facility’s best interests. If the partner facility is not earning revenue, neither is Action Sports Advertising. This partnership and the revenue sharing it entails provides the opportunity for both parties to work together to make the program successful.

Contact Action Sports Advertising for an estimate of the revenue potential for your facility.