Tuesday, March 10, 2009

Major League Paintball Held Hostage

Days 63 - 69
The USPL's first entry deadline passed yesterday without any significant bump in teams moving from registered to paid. Registrations stand at 103 with 35 paid including the 16 pro teams (owners) as the OC Bushwackers finally made their participation official. Team registration is scheduled to close on the 25th and final arrangements with sponsors and vendors must fall into that time frame, at the latest, as well.
Is there a must abort date? You know, if things ain't working as expected is there a date where the league is prepared to cancel and re-schedule or does this go off no matter what? I ask because it's not looking great, is it? In terms of the future of the USPL and major league paintball in general would it be better to postpone or roll the dice now? Hey, it could end up being a completely moot point but realistically what happens if the pro teams are expected to pony up for event losses in order to continue?

Over in Euroland the Millennium Series is pleased to announce a full D2 division (32 teams) for Malaga--their first event of the season. What they aren't announcing is that the locked divisions aren't looking quite so positive--so far. The CPL has 9 of 16 teams on board. The SPL has 21 of 32 signed up and D1 has 11 of 32 in place. They have a bigger window given the event is scheduled for the end of April but there have been a number of spots in the locked divisions (CPL, SPL, D1) available for months with few takers.

Paint continues to be a serious concern and there's some interesting news from Euroland. Pharmagel is no longer producing paintballs which has forced Tomahawk to contract with the manufacturers out of Romania. (Which, I am informed, means there are only 2 paint manufacturers left that are based in Europe.) In a possibly related bit of info Tomahawk has yet to sign on as an MS sponsor. Over on this side of the pond word is Procaps has cut employees at both Archon and APS. And rumor has it that Procaps has reduced their production tooling from 12 machines to 6.
It would be interesting to know what current production levels are and what the max capacity of the remaining machines is.

On the international front I have no news on what, if any, advances were made on behalf of the UPBF amid the meetings supposedly taking place on Kish Island, Iran during the recent PALM event.


raehl said...

The cut in encapsulating machines surprises me - anecdotal reports from field owners indicate an increase in participation at the rec level. While perhaps surprising given the economy, it could make sense if you figure paintball is still gaining acceptance with the public, and people who no longer spend a few thousand to travel somewhere for fun might still spend a hundred to have a fun family day locally. Or who turn a corporately-funded outing into a less expensive corporately funded or self-funded paintball outing.

theone said...

Are these encapsulating machines ONLY used for paint encapsulation? Because I am aware that these encapsulation machines are used for other things outside of paintball. I know that it would seem ridiculous if Procaps did anything BUT paintballs but just a question.

retired pro said...

Reason production was cut at Procaps is b/c they dont sponsor half the tournament paintball teams anymore. It also looks like their will be only one league now, in all seriousness Draxxus was sponsoring or affiliated with 75% of the tournament paintball teams.

Baca Loco said...

It's rather convoluted and I don't pretend to be fully up to speed on any of this sort of thing--I's just a lowly paintball player--but it may not be too surprising. When Procaps bought Archon, Archon had previously purchased Zap (if I recall correctly.) If the Zap buyout including the means of manufacturing, and I think it did, there may simply have been some redundancy.
On the other hand I could be remembering this wrong, too.

My understanding is paintball encapsulaters just produce paintballs but are able to be re-tooled to produce other capsules.

Pelc said...

I just saw something in the chat box at propaintball saying that the USPL will defiently be on no matter what. Whether thats true or not I don't know but I can see why they'd still have the event.

I see it that no one really wants to join because they think the league won't last past this one event. Thats probably why they took all the pro funding before the first event in case something like this would happen. I feel like they just wanna get past this first event to prove they can and hope for a better turn out at the next events. And if people see they do atleast decent at the first event more will def come to the second.

But even as is now i'm about to sign up for Semi pro just to be the only team to be there and collect the prize for first second and third.

Baca Loco said...

It's not enough. Pro team ownership means they are responsible for any and all debts the league takes on. The investors are the pro teams. If they lose 50 or 75K they haven't proved anything.
I'm not suggesting it won't happen. I am saying a lot depends on whether they roll the dice on this or not.
Btw, there is no Semi-pro division.

Reiner Schafer said...

The first thing that popped into my mind when reading about Procap's reduction of encapsulating machines was their merger with ZAP. It is only natural that their need for all equipment would be unecessary. Was this latest cut still in part due to that merger...I don't know.

I don't have the proof, but I get a "feeling" that competitive tournament paintball participation at most levels is down considerably. Rec levels may be the same or even up, but let's face it, competitive play urges much more paintball consumption.

Procap's bottom line has got to be hurting. It only makes sense that they are going to trim as much fat as they can out of production.

It would also be interesting to know whether offshore (Asian) paint importation is changing. That could have affects on North American and European manufacturers as well.

As far as the USPL startup goes, I haven't decided whether the whole thing was gutsy or stupid. Either way, it is definitely risky. Someone's got more balls than I have. I wish them luck. Hate to see anyone lose big money.

Pelc said...

I meant D1 not Semi Pro cause at the time there was no one paid yet.

But what I was trying to say is that I can see them still holding the event no matter what because they already took the money and if they don't come out succesful from this event it's not their money they're loosing. I don't know if they pro teams have a say if the event gets cancelled or post ponned.

I also just watched a video interview with Chuck. He was saying that they're also working with the NCPA with this event and they'll be a college division out there. They're just really trying to pull some money in and make the event atleast seem successful for the people who don't have hope in it and maybe convince some more teams to join next time.

Fred said...

Some news related to the MS. The MS just released this brief note to the teams :

"Gun rule changes

PSP suggested ROF of 12, 10 and 8 for different skill levels, now agreed to use ROF 10 universally for all from 2010, MS will start already in 2009 with ROF 10"

It seems that we can really expect for an exclusive format over Europe and the US. The last but not the least : is there a possibility that Euros will have a rulebook someday ?

Anonymous said...

the majority of paintballs are shot AT people who have never played before


said another way, no, competitive paintball is not the driving factor in how many paintballs are produced.

Don Saavedra said...

It occurs to me that the paint companies could save a ton of money and be able to sponsor more teams if tournament players could learn how to aim and actually hit people.

jusayin' ;-)

Reiner Schafer said...

"It occurs to me that the paint companies could save a ton of money and be able to sponsor more teams if tournament players could learn how to aim and actually hit people."

Haha. They could base sponsorships on eliminations per case rather than straight winning. If you're not meeting your quota, you're cut off. That would get people to waste less paint.

The paint companies are in quite a dilemma when you really think about it. They depend on paint sales (obviously), but know now that high paint usage is killing the sport/industry. So now they need people to shoot less paint (meaning less sales for them) in the hopes that it will attract more players into the game so they can get back to the sales they once had. They are in a tough spot. One that no business would want to be in.

It was so much easier for them when technology was still evloving, but was much lower than it is today. At that point they were ramping up (excuse the pun) and selling more paint each consecutive year. Now they need to cut production.

I see one of two things happening in the next few years. Either paint prices will go up because of lower production amounts and increased costs associated with that...or cheap Asian paint will take over more and more of the market.

Lawrence said...

paint will go up and people will hate it and bitch about it, things will begin to stabilize with the economy etc..., paint prices will begin to drop...hopefully this time we've learned to set a bar to how low they can go.

paint is the gas of this sport, it's prices should be in constant flux imo.

Reiner Schafer said...

"paint prices will begin to drop...hopefully this time we've learned to set a bar to how low they can go."

I don't think that will ever happen. If there were only North American manufacturers, then yes, they would control paint prices (much like oil companies control gas prices). But with Asian paint manufacturers, prices will always be kept low.

At the retail level, thousnads of independant thinking entrepreneurs will continue undercut one another because many (most?) think that is the best way to attract more customers.

I, on the other hand, have found exactly the opposite to be true. Higher field paint prices keep the "undesireables" away and thereby attract more customers overall. Sometimes it pays to buck the trend.

theone said...

I see this issue in a number of ways. First, maybe the paint companies, in response to the "boom" in the economy in the early part of this decade, built more facilities, encapsulators, etc. than are really needed. What we COULD be seeing is actually just a necessary contraction of a situation that was too large to deal with actual demand.

Second, I keep hearing everything about this "Asian" paint but who/where/when are people using this paint. Right now your major players are in North America and Europe. So, the impact of "Asian" paint, where?

So, I see the issue as potentially, rather than being all "doom-and-gloom" as maybe, just maybe, a contraction that is necessary because supply grew too quick and the demand wasn't really there but just inflated because of the amount of $$$ that was around earlier.

Reiner Schafer said...

theone, you are absolutely right. It does come down to too much production capability for the demand.

I think that is why there is a current push towards Scenario Games and big games. With the slowing of the speedball market, paint manufacturers are seeing the next best thing in Scenario games where players tend to sling high amounts of paint. Paint manufacturers are all over pushing those games and sponsoring "Scenario teams". Personally I see that as going down a similar road we went down when we pulled players out of the woods and encouraged them to use high volumes of paint on smaller speedball fields. We'll see.

The Asian paint isn't making a big impact...yet. But it is on the horizon and we all know that they will be offering paint at the lowest prices possible (I'm sure they will work on quality issues as well), and will therefore be an ever present pressure to keep paint prices low. Although most players are not too interested in using the lower quality, cheap Asian paints yet, that can change if North American manufacturers price themselves out of the market (especially at the "field paint" level). Field owners will switch much quicker if the price difference is very much. Since fieldowners buy a lot of paint, that will impact the market considerably. I'm sure North American paint manufacturers are very much concerned about the affects of cheaper Asian paints, while players are probably not very concerned.

raehl said...

How about that Asian beef?

There is a very big class of product that doesn't get made in Asia: Anything that requires climate-controlled transport. I don't see Asian paint ever making a big impact because by the time it gets from there to here it's going to be crap paint. Maybe it will find a place in WalMart, but I doubt any field would risk the quality issues over a few bucks a case.

As for paint sales - I think paint companies are realizing that they can not be successful on volume.

Paint is a bit like gas. Nobody wants more gas, they just want to get where they are going. Paint is the same way - nobody wants more paintballs; they want to have fun. And for the vast majority of paintball players, more fun is had when less paint is shot.

BP and Shell and Chevron don't make money by selling more gas, they make money by selling less gas for more money. Paint needs to be the same way - sell less of it at higher margins.

It's not about the number of cases sold, it's about the number of player-days. The paint company wants to get $5 per player per day and do that selling as few paintballs as possible.

Baca Loco said...

Interesting comments, kids.
I would only add a couple of ideas.
1. You may not be aware you are shooting Asian paint as there's lots of white box out there. The typical Asian paint I've seen is okay for base field paint as it fulfills the basic requirement--it comes out of pretty much any gun intact.
2. Some of the paint giants are also servicing significant debt they took on when there was lots of money to be had.

Lawrence said...

"I, on the other hand, have found exactly the opposite to be true. Higher field paint prices keep the "undesireables" away and thereby attract more customers overall."

why do i get slightly offended by this?

Reiner Schafer said...

"There is a very big class of product that doesn't get made in Asia: Anything that requires climate-controlled transport. I don't see Asian paint ever making a big impact because by the time it gets from there to here it's going to be crap paint. Maybe it will find a place in WalMart, but I doubt any field would risk the quality issues over a few bucks a case."

raehl, you are right about the potential shipping problems and I'm sure that is the main reason we don't see even more of it around. I bought some paint made in Asia this past summer and have to admit it was very good. I bought 4 different kinds from the same manufacturer to try it out. My players loved it, including the "picky" pump players. It was on average about $5 cheaper than comparable paint I normally buy. If I sell 3,000 cases in a year (medium sized field) and save $5, that's $15,000 in my pocket (before taxes).

I haven't gone that route, but the thought has occurred to me. If it's occurred to me, I know there are many field owners that pinch pennies a lot harder than I do, who are already going that route and a lot more will look at it if the price gap widens. That's just the reality of economics.

Reiner Schafer said...

"why do i get slightly offended by this?"

I don't know. Guilty conscience? (insert smiley here)