BATTER UP!

Batting Cages Key to Attracting
Customers and Revenues

By Michael J. Stott

In the summer of ’69 batting cages were in their infancy as early adapting driving range and miniature golf operators struggled for revenue and the right marketing mix. Subsequent hard times drove many out of business. But, the advent of automatic feeding systems, more reliable pitching equipment, commercially designed supplies, detailed construction blueprints and the promise of ancillary profits has range owners stepping up to the plate once again.

Industry experts estimate there are about 1,500 batting cages in operation nationally, 10 percent to 15 percent of which are tied to driving ranges. That count is expected to quadruple within the next several years, according to Dick Hall, owner of Automated Batting Cages Corp. (ABC) in Salem, Ore.

“Not everyone who came to a golf driving range in the ’70s was a bona fide golfer,” Hall says. “By adding baseball, [operators] expanded their base and extended their season,” one that dovetailed nicely with golf. The fact that batting cages complied with existing golf land use permits was an added bonus.

Steve Cook, president of Adventure Golf Services in Traverse City, Mich., is in the family entertainment center (FEC) business. Because of the increase in per capita spending batting cages bring, he says range owners should think of their operations as family destinations rather than just driving ranges with batting cages tacked on.

Admittedly not everyone is financially flush enough to afford an FEC, but most everyone can afford to add—and profit from—a batting cage. While driving ranges are space-intensive, batting cages are space- and manpower-efficient, says Dutch Magrath, president of Amusement Products LLC in Chattanooga, Tenn.

The Great Wide Open
Nationally, outdoor cages garner 70 percent of the market and are favored by customers primarily for visibility reasons. “Customers would rather hit outdoors,” says Joe Giovagnoli, sales manager for Master Pitching Machine Inc. in Kansas City, Mo.

Range owners can choose from two basic cage configurations: the standard rectangular and the monopole.

“We sell more rectangulars because of the less space and cost involved,” Giovagnoli says. “For people who don’t need six or more cages, the rectangular is the way to go. We can provide a 16-foot by 58-foot by 13-to 16-foot-high cage, turnkey, for $14,000 per stall. That includes labor, equipment, concrete work, electrical and lighting.”

Cook of Adventure Golf Services suggests allowing $11,000 per stall for installation and $10,000 for equipment, but notes that “there are a lot of bells and whistles, depending on what you order.”

ABC and Amusement Products can install and equip rectangular cages in the range of $15,000 to $20,000 per stall, depending on selected options. All suppliers recommend range owners do their homework thoroughly, talk to previous customers and make on-site visits for an appreciation of costs and work involved. Several Web sites, including ABC’s and Amusement Products’, also contain comprehensive answers to questions regarding cage economics, space requirements and profitability.

While range owners like rectangular cages for their cost and space considerations, the outdoor cage of preference for batters is the monopole, which comes in five- through 10-stall versions. It has a 92-foot hitting depth, which allows hitters to watch the ball fly farther. Average stall price is approximately $16,000, Giovagnoli says.

“Most people use a general contractor [to build the cage],” says Magrath whose firm supplies standard plans for batting cages, golf layouts, Go-Kart tracks and the like. “Some people will do their own work and can bring down costs 15 to 20 percent.”

Turnkey options also are available through firms like Master Pitching or Select Development and Contracting in Boise, Idaho. While a general contractor may take a minimum of seven-to-eight weeks to do the work, Select Development can complete a five- to nine-cage stall design in five or six. Total space required is 10,000 to 14,000 square feet, says Select Development’s Randy Fullmer.

Indoor cages, ideal for inclement weather, private instruction and training facilities, constitute 30 percent of the cage market. Master Pitching can do a main indoor range with variations off a standard plan of 14 feet by 14 feet by 58 feet for $13,000 per stall.

Creating a Family Entertainment Facility
Located 30 miles east of Cleveland in an upscale semi-rural area ripe for development, The Greenery on Mayfield in Chardon, Ohio, is a 48-acre emerging complex leveraging a superlative location and quality service to produce what co-owner Cathy DiNardo calls a learning center.

“We’re striving for excellence every day,” DiNardo says of the facility’s layout that also has plans for miniature golf, a full short game area and space for a par-3 course.

The DiNardos bought the property in March 1997 and two months later had a 10-station monopole batting cage up and running, specifically to generate revenue while building a 50-tee driving range (20 more tee stations are now under construction). The couple has paid a lot of attention to aesthetics. “We’ve created an environment here,” she says, one built on a philosophy that a learning center should have activity for everyone, including handicapped patrons. The batting cage area is separated from the driving range and surrounded by trees.

“For customers, it is a sense of discovery when they see the batting cages for the first time,” says DiNardo, who often hands out free pitching tokens to youngsters. “We’ve worked to make women and children comfortable here. Frequently you’ll see mothers sitting on the benches reading while the kids are batting, and on Friday night we are wall-to-wall with kids and grandparents.”

Service and The Greenery’s excellent location compensate for the lack of a clubhouse, office, paved roads or permanent toilets. Adjacent to a township park, the complex has become a mecca for area ballplayers. Across the street is the 350-acre Sand Ridge Golf Course, one of the nation’s newest courses. During a Nike Tour warm-up and a subsequent PGA pre-tour event, The Greenery became the practice spot of choice for touring pros. That preference continues today as assistant pros and caddies routinely flock to the facility.

As for testimonials, one regular golf customer liked the ambiance so much that he visited the range 50 times in 1999, driving 20 miles out of his way. And in another compliment, a new female member announced that The Greenery was “the deciding factor” in the family’s decision to relocate to Chardon.

Field of Dreams
Dave Kent, owner of Sportstime Park Construction Inc. in Springfield, Mo., says he has “probably one of the best ball locations in the Midwest.” A 100-acre park with 650 players within a block and a half and 25 nearby soccer fields provide a constant flow of patrons for his batting cages and full-service FEC. “The batting cages do a steady business,” he says, particularly because players make it a habit to frequent the cages before and after games.

“Build it and they will come” may work fine in the celluloid world, but in most driving range/batting cage setups, the business plan calls for stronger measures. Answers to the questions “what are you going to sell?” and “to whom?” are critical in isolating target markets since each driving range and FEC has a slightly different orientation.

Adventure Golf Services and ABC both offer market research assistance to potential owners. “We try to guide prospects so they understand their base and demographics and then advise them on the number of cages and the revenue figures they can expect for a given location,” says ABC’s Hall.

Magrath acknowledges that big markets and areas with an inherent interest in ball playing are big pluses, but above all he urges clients to focus on their core business. “Take care of the baseball and softball players and the walk-up batter will be happy,” he says.

Grassroots Marketing
Maximizing visibility can be done in a variety of ways. Magrath strongly suggests owners get in touch with schools, associations and male and female leagues. Placing small ads in local interest publications, sending coupons to coaches and players, especially on sign-up days, and discounting on-time sales to coaches are proven business builders.

His emphasis on coaches is well-founded. “When a coach brings kids you don’t have one customer, but 14 or 15,” Magrath says. Kids have to come back to practice and the efficiency of the batting cage helps maximize practice time, he says.

“Batting cages are integral to the game,” Hall adds. And players will often frequent facilities based on cage availability and inducements, such as special offers, that are part of a marketing arsenal. Owners often recognize that marketing tools are site specific and those with good locations frequently take advantage of the signage opportunities presented by 45-foot-high center monopoles.

Well-maintained and well-lit sites are as important as grassroots promotions, Giovagnoli says. He also points to tie-ins with professional or well-known local players and clinic promotions as ways to boost batting-cage business.

Population, location, accessibility and good financing are all critical ingredients in the profitability picture. So is pricing. Operators commonly use two methods: token, which eliminates theft and damage to equipment, and time, which creates value for coaches who need extended practice periods for their players. Pricing varies by facility. Most batting operations fall within the $1 to $2 range for 20 balls, although Kent is at the low end charging 50 cents for 12 balls. Using a three-minute cycle at $1.50 for 20 balls, an operator can earn $30 per hour per stall. Coaches in such settings are charged $25 per hour.

Low Cost/High Profit
Experts agree that the cost of running a batting cage is invariably low and profits can be impressive, particularly if the property possesses equipment that offers a variety of ball speed choices. One batting cage/driving range/pro shop arrangement in San Diego makes $175,000 annually, or 9.8 percent of the complex’s take, from cages alone. ABC estimates that with cage revenues of $30,000 and $200,000, expenses will average $12,000 and $52,000 respectively, leaving net cash flows of $18,000 and $148,000. Owners only need to allow about 5 percent of revenues for maintenance and repair. Caveats abound, including variations in location, demographics, labor, construction and other expenses.

Batting cage amortization is subject to similar variables. Five to seven years is reasonable in some cases, three to five in others. Yet near Richmond, Va., one range owner spent $180,000 to install batting cages, recouped the money within the first two years and is now netting $125,000 per year. A note to the wise: Free-standing facilities with indoor cages do not provide a good return on investment unless they are part of specialized training facilities, says Kent of Sportstime Park.

While return on investment and expenses are two important considerations, liability is another. Thanks to technological advances, most commercial equipment is not a liability these days. “The exposure is 95 percent kids,” says David Barnes, producing agent for The Monroe Group Inc., an insurance company in Pittsford, N.Y.

Basic Due Diligence
The following factors help mitigate the sting of batting cage liability: good maintenance, bright lighting, proper signage, soft balls, helmets with face masks, first-aid kits and trained employees.
“A supervised batting cage operation is just common-sense loss prevention” and will overcome a litigious mindset, Barnes says. Operators need to think like insurers—if it appears to be a potential problem, it is.

Adds Magrath, “Owners need to perform basic due diligence. You never want two people in a cage at a time. Foul tips hit people, or worse yet, Junior hits Dad in the head with a bat.”
Over the years the batting cage industry has had a remarkable safety record. And though insurance companies are more receptive than 10 years ago and will underwrite property, many will still not touch the liability.

“In general, the liability goes back to the property owner,” Barnes says. “He has to provide the safest experience for everybody.” That means an awareness of typical in-cage mishaps as a result of batters standing on home plate, attempting to hit too fast pitches, and poor equipment and netting maintenance.

Big accidents happen outside cages, too, Giovagnoli adds, so “the operator must set the tone as to what can and can’t go on outside the cage.”

To that end, ABC provides an operator’s manual with every system sold. It delineates safety standards, proactive safety plans, maintenance schedules, a videotape on the do’s and don’ts of cages, insurance carrier findings and a quarterly newsletter.

If owners are willing to self-insure for $250, $500 or $1,000—the range in which most claims occur—in time, they can minimize claims and premium costs.

“With batting cages you pay a little more for insurance, but it’s still a profit center,” says Michael LaFond, an insurance consultant with Insurance Advisors in Minnetonka, Minn. “Let’s put it this way, I’ve never seen anyone take cages out.”