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Monday, May 12, 2008 

We don't need no stinkin' internet

May 12th, Seneca, KS. 25 miles. Gravel lot. Warm, windy. Strong pre-sale.

The business model for a circus like this one is designed to reduce financial risk. Most dates are SPONSORED by a locaal organization that agrees to provide certain services in return for a share of ticket sales. The sponsor signs an agreement and puts up a SIGNING FEE of several hundred dollars. That signing fee helps to pay the booking agent. The fee is refunded if the sponsor sells a certain number of tickets. The TELEMARKETERS enter into a separate agreement with the sponsor to sell children’s tickets to local businesses. The businesses give them away. The show gets 35% of the revenue from those tickets. The sponsors are asked sell ADVANCED SALE TICKETS at a reduced price. For the first 100 ADULT tickets sold the circus receives all monies. For addictional tickets sold the show and the sponsor divide the proceeds, and there is a division of proceeds for all childrens tickets. Combined these elements make up the PRE-SALE. Tickets sold on the day of the show make up the BOX OFFICE or GATE. The sponsor gets a smaller percentage of the gate. Ideally most days the circus makes enough money off ticket sales and concessions revenues to cover expenses. On a good day the show does better than that. On a poor day, worse. So long as the good days outnumber the poor days the show stays firmly in the black. With one-third of the 2008 season completed, the show is in the black. Audiences are good in most towns. Labor remains problematic, but that isn’t going to change. The wild cards for the remainder of the season are the route – will the towns in the west pay off – and the price of fuel. High fuel prices cost the circus more money every days, and impact what the audience has to spend. We’ve learned to live with $4.50 a gallon diesel, can anybody live with $5.00 or $6.00 dollar fuel?

Hate to bring bad news, but watched a news program yesterday, where some wall street guy said that by oct., gas will be at 8.00 a gallon, I sure hope he is wrong, but I don't think so....

Could happen. But if it does it's likely to take down the entire world economy. There's a "bubble" mentality at work in the crude oil market now where price is no longer tied to demand, or even to immediate supply. Bubbles eventually burst. I'm more inclined to think in the longer term, over the next five years we'll find some stability in the $6.00 per gallon range -- depending on taxes.


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