Paul McBeth signs 10 year, $10 000 000 contract with Discraft

[Dingus]

My bet is that the $10 million is highly padded with unattainable tour and sales incentives. Otherwise that is pure insanity. You could manufacture that Ezra kid into a far bigger start with a fraction of the money. Either way it is cool, big dollar figures only help our sport seem legit in the mainstream.

[oldmandiscer]

Originally Posted by DG_player

I thought the same thing. Even Nike who's entire business model is pretty much built on selling tremedously marked up product via sponsorships only spends like 15% of their revenue.

I would have to think given the fact they already had him under contract for 4 years and didn't have any reason to extend it, that they have seen a huge bump in sales due to McBeth and that's what drove the decision. The mention of buying more equipment to expand production capacity seems to support this.

If that's the case though I find it a bit surprising. No one I play with seems to buy discs based on brand loyalty or the pro's name on it. I never thought that meant much to most disc golfers.

I play in several leagues and with a lot of different people. I would say I saw a lot more Discraft then in years past, prior to McBeth moving to Discraft. He definitely moves the needle. I personally only throw what I like, I couldn't care less what pro throws it.

[oldmandiscer]

Originally Posted by Dingus

My bet is that the $10 million is highly padded with unattainable tour and sales incentives. Otherwise that is pure insanity. You could manufacture that Ezra kid into a far bigger start with a fraction of the money. Either way it is cool, big dollar figures only help our sport seem legit in the mainstream.

That certainly is likely considering how much they sell now. Otherwise if things went bad they would go bankrupt. (McBeth gets injured, comes back but plays poorly due to lingering injury, something like a back injury that is reoccurring)

It would be crazy not to have some large guarantees in it that certain sales figures are met along the way.

[Cgkdisc]

Originally Posted by Dingus

My bet is that the $10 million is highly padded with unattainable tour and sales incentives. Otherwise that is pure insanity. You could manufacture that Ezra kid into a far bigger start with a fraction of the money. Either way it is cool, big dollar figures only help our sport seem legit in the mainstream.

What about the possibility this is a clever way for McBeth to gradually buy a significant stake in Discraft? Seems like he's stated he's wanted to own production long range. So perhaps a good chunk of that $1 million per year is looping right back into Discraft? Discraft gets to book a $1 million dollar salary/contractor expense each year to reduce their net income and then receives a good portion of the cash back as a capital infusion from McBeth. I know absolutely nothing on this deal beyond the announcement. Just presenting a possible scenario.

[dehaas]

Originally Posted by Cgkdisc

What about the possibility this is a clever way for McBeth to gradually buy a significant stake in Discraft? Seems like he's stated he's wanted to own production long range. So perhaps a good chunk of that $1 million per year is looping right back into Discraft? Discraft gets to book a $1 million dollar salary/contractor expense each year to reduce their net income and then receives a good portion of the cash back as a capital infusion from McBeth. I know absolutely nothing on this deal beyond the announcement. Just presenting a possible scenario.

That would make sense...increased production could be directed straight towards his own line of discs.

[mrclc]

Originally Posted by Cgkdisc

What about the possibility this is a clever way for McBeth to gradually buy a significant stake in Discraft? Seems like he's stated he's wanted to own production long range. So perhaps a good chunk of that $1 million per year is looping right back into Discraft? Discraft gets to book a $1 million dollar salary/contractor expense each year to reduce their net income and then receives a good portion of the cash back as a capital infusion from McBeth. I know absolutely nothing on this deal beyond the announcement. Just presenting a possible scenario.

This makes a lot of sense as a mutually beneficial scenario. Speculation, but good speculation.

[Casey 1988]

Originally Posted by Biggie_Robs

They'll sell plenty of non-McBeth Zones and Buzzzes.

Yes but Paul Uses those molds too, so the non signature versions will sell as well due to who uses them.

[Finny]

From the UltiWorld article: “In his first year at Discraft, McBeth easily surpassed his guaranteed salary, selling over 250,000 discs even as some of his own most popular discs, like the Hades, had yet to be released.”

That’s $5 million in revenue in one year at $20/disc. And disc sales are much higher now. So if McBeth just gets the guaranteed $1 million a year but nothing additional from disc sales anymore, this contract is a steal for Discraft.

That’s my #1 question: does the $10 million cover everything?

[oldmandiscer]

Originally Posted by Finny

From the UltiWorld article: “In his first year at Discraft, McBeth easily surpassed his guaranteed salary, selling over 250,000 discs even as some of his own most popular discs, like the Hades, had yet to be released.”

That’s $5 million in revenue in one year at $20/disc. And disc sales are much higher now. So if McBeth just gets the guaranteed $1 million a year but nothing additional from disc sales anymore, this contract is a steal for Discraft.

That’s my #1 question: does the $10 million cover everything?

They sell mostly at wholesale though which is more like what, 6-7 bucks per?

[roblee]

Incredible and exciting.

10years/$10M does not = $1M/yr for 10 yr. Probably 100's of details: performance, sales, 401k's, insurance, stipends, travel allowance, appearances, delayed payment, stock options......I expect that Paul expects to exceed that amount.