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Strategic Business Proposal 1 of 28 Strategic Business Proposal for For: Los Angeles Rams https://www.therams.com Prepared On: August 21, 2018 Prepared By: Leslie Reynolds Kyle Randle Mick Rose Janelle Edwards Shani Hannah Instructor Name: Prof. Jennifer Marshall Strategic Business Proposal Page 2 of 28 Contents Introduction ....................................................................................................................................................... 3 Executive Summary ........................................................................................................................................ 3 1. Organizational Challenges & Proposed Solution ............................................................................................. 4 Organizational Challenges .............................................................................................................................. 4 Proposed Solution .......................................................................................................................................... 4 2. Environmental Scanning ................................................................................................................................. 4 Internal Analysis .......................................................................................................................................... 4-6 External Analysis ....................................................................................................................................... 6-10 3. Strategy Formulation ................................................................................................................................... 10 Operations .............................................................................................................................................. 10-11 Sales, Marketing, & Distribution .............................................................................................................. 11-13 Legal ....................................................................................................................................................... 13-14 4. Proposal Budget & Projections ..................................................................................................................... 14 Sales Projections ..................................................................................................................................... 14-15 Project Budget ............................................................................................................................................. 15 5. Strategy Implementation ............................................................................................................................. 16 Timeline and Key Milestones ................................................................................................................... 16-17 6. Future Plans ................................................................................................................................................. 17 Long-Term Opportunity and Development Plans ..................................................................................... 17-18 7. Appendices and References ......................................................................................................................... 19 References .............................................................................................................................................. 19-22 Appendices .................................................................................................................................................. 23 Appendix 1:Competitive Analysis ............................................................................................................ 23 Appendix 2: Sales Projections .................................................................................................................. 24 Appendix 3: Seating Chart ....................................................................................................................... 25 Appendix 4: Project Budget .................................................................................................................... 26 Appendix 5: Budget Ratios………………………………………………………………………………………………...…………………….27 Appendix 6: Sponsorship/Marketing Strategy……………………………………………………………………………………...….28 Strategic Business Proposal Page 3 of 28 Introduction Executive Summary The Los Angeles Rams football team is one of the oldest franchises in NFL history today. The LA Rams unfortunately lost a lot of their fanbase due to moving from California to St. Louis in 1995 after playing in California for over 20 years (ProFootball Hall of Fame 2018). In 2016 the Rams came back to California (ProFootball Hall of Fame 2018). Although the moves could easily have an effect on their fans, it didn’t help that they had a losing record. But in 2017 they hired the new head coach Sean McVay who helped the Rams come back with an 11-5 season record. The Rams need people to attend the games, because their attendance has dropped by 26,087 in 2017 and has incurred a loss of 38% between 2016 and 2017 (Vivid Seats LTD., 2017). By giving basic seating a discount along with other perks, it can help motivate people to buy tickets 2018, 2019 and beyond. Our end goal is to fill the new stadium in 2020. More fans, more money and who knows, possibly a championship! _______________________ __________________________ _______________________ Shani Hannah Janelle Edwards Kyle Randle _______________________ _______________________ Leslie Reynolds Mick Rose Strategic Business Proposal Page 4 of 28 1: Challenges & Solutions Organizational Challenges The Los Angeles Rams are in the process of building a new stadium in Inglewood, California which will hold over 70,000 people (Goertzen, 2017). While the stadium is being built, they are using the Los Angeles Memorial Coliseum home of the USC- Texas college football team which holds 93,607 seats (Lauletta, 2017). The problem is that the relocation from St. Louis to Los Angeles caused a change in the Rams fanbase, and now they can’t even fill the Coliseum. Statistics show on statista.com that the home attendance for the St. Louis Rams were at 522,608, but when they moved to Los Angeles during the 2016 season, they actually saw high numbers for the first time in years of 665,318 attendees. But that was short lived because in 2017, the numbers declined again to 507,136 which was lower than 2006 (Statista, 2018). The lack of current ticket sales in 2017 is raising a lot of questions if they will be able to fill the new stadium when it’s finalized in 2020. Proposed Solution Our proposed solution is to lower ticket pricing for basic seating and parking to help bring the fans back. Ticket prices on average during pre-season home games cost $4 to $38, and home games during the season are $22 to $75 (Ticketcity, 2018). Parking prices are from $30 to $200 (Stadium parking guide 2017). We’re offering stable pricing for all the home games across the board for $50 and half off parking prices; example $30 parking ticket would be $15. The cost would make a difference of whether people will stay at home to watch the game on TV or watch live at the stadium. The higher priced seating for VIP’s and the suites has already been discounted with the sole purpose of filling the new stadium. If the Rams also partake more in community events this will also influence the fans to come out and support the team. Every year the sales will continue to grow due to the new stadium, but for now we have to get the fans back to attending the games at the Coliseum. 2: Environmental Scanning Internal Analysis Company Overview The Los Angeles Rams are a professional football team in the National Football League. They were founded in Cleveland in 1936, before moving to Los Angeles in 1946 (Pro Football HOF, 2018). They Strategic Business Proposal Page 5 of 28 moved to St. Louis, Missouri where they were known and made famous as the St. Louis Rams starting in 1994. In 2016, the team moved back to Los Angeles where they again became the Los Angeles Rams. Until the Los Angeles Stadium at Inglewood finishes construction, the team is playing at the Los Angeles Memorial Coliseum, home of the USC Trojans (Wilson, 2017). From building with Habitat for Humanity homes to hosting field day for the local Air Force base, the Rams engulf themselves in the community and their fanbase. Financial Standings Over the course of the last 3 years The Los Angeles Rams have managed to increase their overall franchise value to an estimated 3 billion U.S. dollars. Almost doubling its value in the short amount of time it’s safe to say that the move from St. Louis to Los Angeles is paying off for the company tremendously. Generating majority of its revenue from sponsorships, television and ticket sales the new stadium costing $2.6 billion will definitely bring some well wanted revenue in the upcoming seasons. According to research the 2017 average gate receipts show $78 million and the average revenue per fan being $19. Being #6 in NFL Team Valuations is something to be noted not to mention that between the 2016-2017 season the Rams ticket sales contributed upwards of $27 million to the NFL ticket revenue sharing pool (Helling, 2017). A huge step up from the teams 2015 franchise valuation number 28. Overall the value of the team as had a 3% increase and 21% annualized
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