MY estimates of the revenues and earnings of the existing contracts.
1. Signature Group
The initial contract worth $20,000,000+ had a margin of approx 28% as I was told. I don't know the margin on the additional $10,000,000+ so I must assume the package for the adjustment of error to be at 25%.
The total package with revenue of $30,000,000+ revenues at full rampup is worth $7,500,000/yr or $625,000/mo earnings .
Due to the timing yet with the majority of the summer and late holidays available for bookings, I am going to give half in 1999.
2. Babe Ruth
From what I understand the client gets $4.50 of each Card sold. That leaves $5.25 for TSIG in revenues/Card. Remember NMF gets .25. TSIG also makes $1+/CD sold.
There are MusicCards being sold in the league right now and will be until the All Stars. The word is slowly getting out to the 43,000 teams and should be having the teams aware of the offer by the All Stars push. The participants in the All Stars do the majority of the fund raising for the year as there are tremendous expenses incurred that will be paid for by the funds raised or the parents. Sam can give a clearer number of the teams involved in the All Stars but I seem to remember about 1/2 will be so I'll use that. Provided half of those teams utilize the Card in their push, since it is new and not fully understood by all, I'll use 11,000 teams with approx 250,000 kids working dilligently. Well, we know better so reduce that to 100,000 kids.
Assume 10 MusicCards/kid working or about 200/team. That is 1,000,000 MusicCards in 1999. Remember that is only approx $45x10 raised/team to meet travel expenses. Not much for teams with about 20 members.
1,000,000 Cards @ 5.25 = $5,250,000
5 CDs/Card in 1999 = $5,000,000
Next year will be better as the word is properly dispersed and understood. It will be better this year if the marketing is done properly.
3. Lifetime Learning
Almost every school does some form of fund raising. I even remember doing it as a kid and that was a LOOONNG time ago. Lifetime has an established marketing system set with over 100,000 schools. Assume half do it. Further assume half the kids blank. 35% will make up for the blank. the other 15% may try and cause the total to come to 1 1/2 Cards/ student. I'll use half the kids aren't involved (25,000,000). Half the kids blank (12,500,000). The other half only bring the total back to one/kid or each sells 2 (25,000,000).
25,000,000 cards @ $5.00 = $125,000,000 (don't know mkting agreement)
50% in 1999 = $ 62,500,000
2 CDS/Card in 1999 = $ 25,000,000
4. NMF, Lightning, Ice Palace, TEMPO, Site attraction, insignificant deals done.
Because the site attraction is earned in full, I assume $6.50/Card. These are purchased by music lovers primarily so more CDs bought.
For 1999 these could generate around 1,000,000 cards.
1,000,000 Cards @ $6.50 = $6,500,000
7 CDs/card in 1999 = $7,000,000
Keep an eye open. This wild card might show much greater promise shortly.
5. Some of the coming PRs will contain revenue/earnings for 1999. Some of it may be sizeable.
OK, there is my guess, for what it is worth. From that the companies expenses must be removed, some debt reduction, and other stuff. Adjust to your hearts content. None of us will be right.
Bob
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