Tuesday, January 22, 2013

Eye Of The Storm

Aight. I have reservations about commenting on any of this but here goes anyway. I could re-hash ancient paintball history for those of you who haven't been around long enough to know the antecedents of this latest brouhaha in a teacup to afflict paintball--but then there really aren't all that many paintball type people who really give a rat's posterior. Wait a minute--you don't know what I'm talking about? I'm talking about the recent failed "negotiation" between Valken and the PSP and the effort by Valken's chief to seek more favorable terms in the court of public opinion--or perhaps do a little preemptive cya.
Some of the confusion (and squawking) springs from the fact there are really two different but intertwined issues at play here. One is the relationship (if any) between Valken, as potential sponsor, and the PSP as a tournament promoter. The complication is preexisting sponsor relationships of long standing and the fact an ownership stake in the PSP belongs to an industry competitor. Two is the adversarial relationship between the two major league tourney series (PSP & NPPL) and the complication is that much of PB industry is determined to see one league prevail whether it's by buy out, merger or whatever. There is of course more to it but I'm not going to get bogged down in the history or personalities though both play a role in the present. However a little history will be helpful. Last year Valken was the exclusive (wink, wink) paint sponsor of the NPPL and a gear sponsor in the PSP--Valken product lines excluding paint. Recent seasons have also seen the industry struggle to support two national leagues and struggle to decide what to do about it other than push the leagues to settle it themselves.
With respect to issue One, it isn't about Valken being a sponsor of the PSP it's about them being a paint sponsor. Here the PSP must weigh in the balance the loyal support of its current paint sponsors, the value of that sponsorship and the possible consequences of accepting additional paint sponsors--particularly as the existing sponsors are manufacturers and the new guy isn't.
With respect to issue Two, this is the framework that makes a paint deal between Valken and the PSP acceptable to all parties--at least all the parties the PSP needs to be mindful of. After all, does the NPPL survive without a Valken deal? All the rest is smoke and mirrors including the 10K "surcharge" and I suppose reasonable people can reasonably disagree about the merits of the deal (although it appears to me that the majority of the outrage on Valken's behalf comes from those beholden to Valken in one way or another. Just saying.)
The upshot however has left Valken vulnerable in a couple of ways; with customers they may have made promises to with regards sponsoring the PSP and having paint available and in the arena of public opinion. To forestall those possibilities Gino starts the "extortion" talk on a private Facebook page knowing full well it will be common knowledge in hours. Valken becomes the aggrieved party, he a man of his word, company of the people blah blah blah. And, who knows, maybe some public pressure will improve his negotiating position.
As it turns out that doesn't seem to be the case. (That, btw, was ironic understatement.)

The larger question is what's really in the best interest of the game? The there can be only one--league--crowd must be disappointed. (Again.) The grow the game crowd is generally incoherent and as fickle as a spring breeze. The for the good of the game squealers and average players tend to see everything in terms of how it affects them. And most everybody wonders at one time or another why can't we all just get along? So pretty much business as usual.


Anonymous said...

The PSP has, in the vast majority of cases, shown itself to be above petty "manufacturer partisanship". Dye was getting hammered by SP at a time when Dye was the one fronting a lot of the bills even though both were owners. Dye then allows Planet to have a huge presence in the league, grabbing market share left and right from Dye as Planet guns become the most widely used gun in the industry.

All of this is to say, "Dye" is not really letting anyone or preventing anyone.

The PSP runs itself, and certainly Dave has Lane's ear, but Lane isn't going to exclude or include anyone based on Dye.

I just don't see anything in the league's history working that way.

So if there is any conspiracy, it's not coming from the manufacturers like Dye and especially not Kee.

What is much more likely is Lane isn't going to give in to any kind of bullying or pressure from Valken. Lane, as a good businessman who values his clients, is frankly concerned about the business of his existing sponsors, and Lane, as a paranoid southerner in a fragile industry segment, is a little too concerned about competition.

So mix all that together and Valken has an up hill battle. The best advice you could give to Valken is "pay to play" and "play nice".

Valken did the opposite. Sometimes, big egos like Gino's get in the way.

The more important story though is the fact that ANS is now advertising Dye paint. It begins!

Any takers on how much in revenue this causes Kee and GI to give up at events? It shouldn't be that much, probably just enough to equal their net profit (if there ever was any) from being at events :)

Anonymous said...

Depends on who's making Dye's paint.

Baca Loco said...

Who said anything about a conspiracy or Dye for that matter? I thought I was clear when I said paint manufacturers.

And while it's just a guess I'll say now you won't see Dye paint for sale at PSP events.

EC Lil Baller said...

Where does Valken's paint come from if they're not a manufacturer? Taiwan (like Dye CG - a have three cases in my living room)? Would Pro teams really shoot paint that traveled across the ocean for weeks at World Cup with everything on the line?

Also, what are your thoughts on Impact and TonTons playing PSP next season? Have they addressed scheduling so many teams yet?

Baca Loco said...

Valken's paint comes from various places mostly in Asia.

Wait and see.

I think TonTons are a fine representative of Euroball. I think Impact wanting back in tells you everything you need to know about the NPPL and its future.

And yes, the league is working very diligently to address the inclusion of new teams, scheduling and a variety of related issues to the Pro bracket in a coherent and thorough manner that will hopefully be what happens in 2013. (There also remains an outside chance they will screw the pooch too so fingers crossed.)

Anonymous said...

behind all the paint brands, who actually manufactures the stuff, and who am I leaving out?

PWI (china)

splatkid10 said...

If there was a league merger (or the NPPL died) at some point in the next several months, years, whatever...do you think the PSP would be at all interested in increasing the number of events annually from 5 to say 7? That is more of a load on the divisional teams for sure, but most of the serious players at the D2 level and above I feel like play both leagues. Perhaps not on the same team, but at the events nonetheless. Just food for thought...

It seems through all of this, the most important thing I am learning about these leagues and big events is that paint is everything. I think you once referenced it as the "mother's milk" of a pro paintball team. It makes sense, guns/gear are somewhat fixed costs for sponsors, but paint is what everyone needs for practice everytime. And giving away a skid of paint....let's say 120 to 160 cases at $20 a case is between $2,400 and $3,200. That could be per weekend for a pro team practice, no? What about the fact the opportunity cost of giving away that much paint isn't just a few grand, it's really 3-4 times that amount when you think about the people that would pay $60 a case on any given Sunday.

Lesson for me at the end of the day...if I ever want to start a pro paintball team, win the lotto. Use my winnings to cut myself a $125,000 check annually to fund my team. No such thing as a free lunch.

Nick Brockdorff said...

Gino should have just paid the extra 10K and be done with it.

No doubt the added cost is inconsequential to both Valken and PSP, and as such, it can only have been added to the mix to play on Ginos pride..... and apparently it worked just as intended..... I say he got played.

What baffles me though, is the thinking behind wanting to get on Ginos bad side.... I don't really see an upside for the PSP here.

What do they gain, other than risking perpetuating the lifespan of the NPPL or have another competing league spring up?

Which again, tells me it might not really be the PSP pulling the strings on this one....

But, as usual in paintball, old animosities stand in the way of making smart decisions, not only for the sport, but for your own business (on both sides of the fence).

It will never cease to amaze me.

RyanW said...

Nick, I understand your point's conclusion, in the big picture, to mean he should've paid because the PSP will win and it will behoove him ot get on board now rather than later.

However, after reading Baca's post, and having already gone over the facts in my head, for say over a week now (really left us hanging with this dangling carrot Baca) I would conclude that it was really the PSP who shot themselves in the foot on this deal, albeit temporarily. On Baca's presumption that the NPPL would fold had Valken left, it looks foolish in hindsight to let a measly $10k screw that up. After a long look at things, I conclude the $10k fee was nothing more than an attempt to make Kee et al. feel like being on board early had its benefits. Whether the two PSP paint vendors were going to see any of that $10k or not is irrelevant to the fact that the most either of them could have lost was $5k a piece, (as noted above, slightly more than a weekend of paint) all the while initiating the events to ultimately have a single league. So that leads me to this question, "If only one league emerges, then how many paint sponsors will be allowed in?" This scenario can go several ways, 3 out of the 4 can, then you have a race to get there first. If only 2 out of 4, well then you have a prisoner's dillema.

Nick Brockdorff said...

Actually, no, I wasn't saying the PSP will win anyway, so that wasn't my point (though they probably will, as long as the NPPL sticks so stubbornly to the 7man format.... another national 5man Xball league though... that's a whole different animal to contend with ;)).

My point was that his upside in terms of sales would be far greater than 10K (no, not at events, I mean generally, to the many fields around the US focussed on the PSP format) - and.... that he would have taken away the PSPs power to play him in future :)

But hey, it's easy to stay cool, when you are not the one who's toes are being stepped on ;)

Nick Brockdorff said...

As for a single league only allowing 2 paint vendors, that would be a completely silly decision for the PSP, because that would just see another "NPPL" pop up in short order, and nothing would have been gained through all the manouvering.

We have to remember, nothing stops anyone from starting a league, except for cash.... so if you want to be the only game in town perpetually, you have to let all the big bank rolls in our industry play a part ;)

Baca Loco said...

11:10 Anon
From what I've been told Valken sources paint out of China, Korea and India.

7 events? I think that's highly unlikely.

The fact is most pro teams no longer have the resources to practice more aggressively than many upper division am teams--but otherwise you have drawn a more or less accurate conclusion.

Ryan & Nick
Here's something else to chew on a bit. I made the distinction between manufacture of paint and distribution because North American costs have been on the rise and both of the big players must rely to some degree on economies of scale while, hypothetically, a player like Valken could use paint (on little or no margin) to wedge out market share on the rest of their product lines and increase the pressure on their competition who have to move X amount paint to be profitable. (I don't know that it's true but it's certainly been hinting at in some quarters.) It has further been whispered that's precisely what V. would/will do to the competition with a high profile major league platform as well.

Anonymous said...

Why are people so damn worried about 2 leagues?

It's positive for the sport. It gets more people playing. It has paintball in more major markets over the course of the year. Are we seriously saying that having paintball in HB, Tampa, Las Vegas is bad "for the sport"?

This whole idea that the PSP needs to act to make one league is based on the same poor analytical and decision making skills that hypothesized:
-15bps caused paintball's decline
-Longer fields bring fat guys back to the PSP
-NXL will bring millions
-Casino filmed TV show will bring millions
-Suing each other will bring millions (to the lawyers sure)
-Stats like Winfluence and Gcount are worth spending obscene amounts of money to record and calculate -- when the reason why people watch the webcast has nothing to do with your stats, your huge tower, but simply comes down to your live, quality video from different angles combined with commentating

The PSP is successful because they have an orderly event, decent playing quality venues, a good format, reasonable reffing, and now a quality webcast to show it all off.

Notice that none of those things are inhibited by the presence of 2 leagues.

Quite worrying about the 2 leagues people. I'm almost starting to think there must be a conspiracy theory on the part of the PSP if they are actually so worried about it. Either they just don't "get it" and mistakenly thinking the presence of another league hurts them or they actually have some hidden plans to "be in charge" that the presence of a second league prevents.

Baca Loco said...

12:46 Anon
People aren't.

The majority of the pressure for one league has come from within the industry.

Anonymous said...

PSP doesn't really care that much about the existence of NPPL. It really doesn't effect PSP's business much.

Most of the major paintball industry companies do care. They don't want to sponsor teams that want to play 2 leagues, they won't want to split their promotion dollars over two leagues, they don't want their staff going to double the number of events (even as players). They even don't want players going to events that the industry knows are run extremely poorly.

Back when there was money flowing and both leagues were well-run, two leagues wasn't a bad thing. Now, it's time to focus.

Anonymous said...

Huh? The industry? Who in the industry sends their staff to two leagues? Particularly, who in the industry sends their staff to two leagues who is on the PSP ownership/influencer side?

Crickets chirping...

Mike said...

It doesn't matter to me whether their is one league or two. I think it would help if their was one league in the sense of getting paintball being recognized as a sport.

So the industry that makes paint wants one league so that they can lock down their market share of paint and make a greater profit. In other words have a monopoly on paint sold at events and extend that to teams through sponsorships. Monopoly's won't grow paintball rather it will create stagnation. Capitalism is about securing the most market share and squeezing out the smaller company either through buying them up or regulating them out of business by way of their government crony friends. The opposite of that is a free market where everybody is allowed to buy whatever paint they want. That results in real market competition which drives down the price of paint.

It's real market competition that will drive prices down and make paintball affordable. What we have now are a few select farmers fighting over their paintball livestock.

Nick Brockdorff said...


I seriously doubt production cost has rised in the current economy... but I may ofcourse be wrong ;)

I don't see Valken being able to sell paint cheaper as a negative..... and I fail to see why the PSP would.

As for other manufacturers - for sure - that is a given ;)

Anonymous said...

I find it funny that a paint manufacturer with multiple paint-making facilities located in at least 3 different countries, would argue that a distributor, who buys his paint from multiple factories around the world and as such pays more than the paint costs to make, is able to sell his paint cheaper than the aforementioned manufacturer.

Anonymous said...

I'm not on anyone's side here, but it's pretty easy to see why.

Valken has a specification for their paint. They shop around at different manufacturers in Asia (and India I heard?) and buy the paint from the manufacturer.

The manufacturer in Asia or India is not a "brand", and has extremely low wages, R&D, etc. etc.

So the cost basis would be lower compared to GI.

Now, why we should care about this particular competitive advantage and single out GI or Kee as deserving protection is beyond me. It would seem GI and Kee should have better quality control, better manufacturing flexibility, inventory turnover, etc.

But seriously, if Valken's business model makes sense, then GI and Kee should follow, rather than complain.

If the rumors are true, it would seem Dye is trying to get the best of both worlds, setting up it's personally owned paint manufacturing facilities in Asia, giving them greater control over the process (than Valken) and reduced costs.

Nick Brockdorff said...

It's beyond me people are happy to spend tons of cash at Walmart, buy computers and Iphones, and what not.... but when it comes to paint.... it is downright unpatriotic to buy paint not made in the USA :D

Anonymous said...

Especially strange because Valken employs a lot of people in the USA. Offshoring the manufacturing of low cost consumables may be questionable in the long term, but it's clearly more efficient for consumers and employees in the USA.

NewPro said...

Its been said a thousand times, Does budweiser post on FB that the NFL isn't playing fair and giving too much playtime to Coors, or does Bud stepup, act professional and develop a relationship w/the NFL.It never ceases to amaze me how unprofessional PB companies are. Valken was the only "allowed" seller for paint in the NPPL but when the same logic is applied to exisiting vendors with the PSP, its exthortion. Stick to your guns PSP, you gave them a chance, they shit on you in public and now they are crying about how unfair it is.

Anonymous said...

My impression was the PSP told Valken that not only do they have to pay more but they have to leave the NPPL in order to be at the PSP.

If it's just a question of paying more, no questions asked, it's fine for the PSP to play that way (although it harkens back to the good ol' days of the insiders paying one rate while everyone else gets another price).

You can be certain that Budweiser would complain if the NFL told Budweiser it would have to leave the NBA in order to sponsor the NFL.

Pay to play is one thing. Pay to play combined with "we will tell you how and where you run your business elsewhere if you want to play with us" is quite another.

Anonymous said...

Would it be odd for the NFL to offer a lower sponsorship price to Budweiser if Budweiser agreed not to sponsor the XFL?

It's still a poor analogy because we're not talking about an event sponsorship, we're talking about the PAINT VENDOR FEE. There probably isn't a good analogy at all because there's no other sport out there that requires a consumable that only three companies make to compete.

KEE and GI are apparently willing to be exclusive PSP sponsors. It makes no sense for PSP to allow a third paint vendor who won't do the same.

PSP also didn't tell Valken they HAD to be exclusive to be a paint vendor, they just said they had to be exclusive to get the same vendor pricing as the other paint vendors who were exclusive to PSP.

NewPro said...

Ok, how about a straight advertising analogy. You advertise with us for 6 months, your cost per week is $125.00, if you only advertise with us for three months, you pay $200.00 per week. Who knows about the exclusivity rumor but loyalty/longevity must have some reward.

NewPro said...

Coach, Waiting on the bomb...