Phoenix LXXIV: Be Seeing You
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04-21-2013, 12:01 PM
Join Date: May 2006
Originally Posted by
You come to this conclusion how? That the arena mgt fees can range between $6-15 MM (or whatever the appropriate number), thus paying $50K for a revenue potential study is fair?
That may be the case but that doesn't mean what Beacon delivered had that value.
Is that a correct characterization of your opinion?
We don't have their billing rate, but we do know the total amount paid, and the contents of the study, correct? Would you pay $50K for that report if you had make a determination on what to pay in arena management fees?
I do agree that the speculation has indeed meandered.
Originally Posted by
McKinsey will do any type of work. They may not be experts but they'll happily bill for it.
First of all, this was a fixed fee contract to produce a deliverable or set of deliverables for 48k. There is no rate charged. The original comment was along the lines of "they only spent a week out in Arizona and only talked to x number of people".
My point is 50k for a consulting firms gets you about 4-6 weeks worth of work from 1 person depending on their level and the amount of travel they need to do. This is regardless of the firm or the type of work. If it was an individual independent consultant doing the work from say Account Temps you would get more hours but not sure of the expertise....
My other point is that the interviewing done is not the only hours being spent on the project. There is other research that gets done such as pouring over the numbers being spent on various items such as rent and comparing that to the market in the area, what other teams are doing, what the situation is for other arenas, etc, and then just writing the deliverable and going through the editing process of it with the client.
My third point is that the it doesn't matter what you think of the quality of the deliverable, it was delivered to CoG's old guard and accepted by them. The quality goes straight to that, not what Beacon is capable of producing.
I read through the RFP and it was pretty good. Not necessarily how I would have structured it but if you ask 50 different firms you will get thousands of different answers, kinda like asking a lawyer a question.
Lastly, a 50k contract typically results in a simple diagnostic and is designed to point to a path, not do a full study on earnings potentials, revenue generations, alternatives on anchor tenants, renegotiation of contracts, etc.
Anyone thinking the 50k deliverable was going to provide any significant insight to a solution is kidding themselves. DI it set them on the right path? Sure, it said the arena was being mismanaged and not utilized to its potential.
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