Sliding into home

Nation's Business,  Jan, 1998  by Roberta Maynard

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There's nothing like a dare to motivate a person to do something he otherwise might not do. For Dave King, the dare -- a rather mild one, in fact -- had dramatic results: It led him to start his own business.

In 1982, King and his wife, Annette, avid weekend players of slow-pitch softball, were playing in a tournament in a small town in western Colorado. After making comments about the poor management of the event, they were asked to leave. The event manager told them that if they thought they could organize an event better, they should try it themselves.

During the long drive home that day, King recalls, they began speculating: "What if we developed the perfect weekend tournament for amateurs who take their sports seriously -- an event that would have a strong social element, a good location, and great officiating.?"

They sketched out rough financials and decided that to make enough money to give the champions a trip to Las Vegas, there would have to be three tournaments, which gave rise to the company's name, Triple Crown Sports.

For five years, they ran a softball series in Colorado with no long-term goals. Then, in 1987, frustrated in his job at an insurance company, King wrote a business plan that launched a full-time tournament operation in Fort Collins. Players wanted well-organized events, he says. "Predictability and consistency were things the event business lacked. That's what we tried to provide."

Triple Crown now runs 400 events a year in softball, baseball, hockey, soccer, and basketball.

In the early years, though, King's love of sports got in the way of financial success. He realized he had to make a decision on whether to make money or just hold a lot of "neat" events.

He developed a model of how to make money running grass-roots events, and he hit on a successful mix: Participant entry fees -- typically a few hundred dollars -- would provide about 50 to 60 percent of revenues, depending on the sport. Corporate sponsorships would be limited to 20 to 25 percent of revenues so that the withdrawal of any one sponsor would not necessarily scuttle an event. The remainder of revenues would come from sales of T-shirts and hats.

King recalls the company's progress by years: In 1988 -- Year One -- Triple Crown lost about $350,000; in Year Two, $150,000. In Year Three, the company edged into the black, but it suffered its first real cash-flow crisis, which required significant readjustments with equipment and T-shirt suppliers as well as cost cutting and efficiency improvements. Those were achieved mainly through automating operations. Annette King, who had been out of the business for two years, returned as systems administrator.

But, Dave King says, "our big mistake came in Year Five. We did the No. 1 sin in growth: We put everything on the list and tried to tackle them all at the same time." That list included acquiring a smaller sports company, going into European markets, starting a division in Canada, and rolling out two more sports -- volleyball and girls' fast-pitch softball. The net effect was that after two profitable years, the company lost $500,000 and owed $1.1 million.

Opting not to fold his tent, King drew up a seven-point survival plan that began with laying off everyone in the company for six weeks. The entire operation was reorganized. King personally explained the plan to everyone who was owed money. A trusted accountant had to be let go. New projects were cut. So were the operations in France and Canada. "That type of focus is hard to come by unless you have a crisis," he says

But the next year saw a turn-around. "With that little plan, we were able to swing $900,000 on the bottom line, [from a $500,000 loss] to a $400,000 profit," King says with a hint of pride.

Now the company is heading down another new road: franchising.

As early as Year Two, King knew that the company couldn't maintain a centralized management. One reason is the local nature of amateur sports. When approaching sponsors and civic authorities in new markets, he found, "you're still that out-of-town person, trying to take money out of the community. And that's always a barrier for us to overcome until they get to know us." Also, it was hard to determine when markets were ready for new sports or more events.

Such factors led to a decision to franchise as a way to provide local ownership and to allow his experienced staff to turn their energies to providing franchise support. In fact, seven of his staff of 43 were among the first team to be trained as franchisees this past September. King expects to have 20 franchisees trained by the third quarter of 1998.

As it gears up for franchising, Triple Crown is generating revenues of $9 million a year. The company has moved successfully into the youth market, and King has plans for further expansion.

For this player, who turned CEO on a dare, Year Eleven looks like a solid hit.

COPYRIGHT 1998 U.S. Chamber of Commerce
COPYRIGHT 2008 Gale, Cengage Learning