How is SCG making money?

[Griselpuff]

Just some thoughts that made me realize they must be making the bulk of their money from making the market.

$30 is a lot for an entry fee, but the prizes are really high. At Orlando, Dallas, and Memphis, SCG must have lost over $1000 at each event, just from paying more for the prizes than they collected entry fees (I only looked at the Legacy portion).

I crunched some numbers, and since DC, they've made $5480 in the last ten Opens (Legacy portion).

Now, I assume they make more from Standard, but that's still not very much money at all, especially when you take into account the fees for renting such large spaces.

I guess they must make a ton of it back via their website and via their dealers.

Opinions?

[Dino]

They buy cards at a very low price from people who want to sell, then they sell those cards at a higher price.

[Tha Gunslinga]

They have this thing called an online store where they sell cards. The events are advertising.

Also, the Standard events make piles of money, which pays for anything they lose on Legacy.

[Koby]

Selling Standstill at $17 a pop after GerryT makes Top8 is a pretty damn good way to make money.

[(nameless one)]

Selling Standstill at $17 a pop after GerryT makes Top8 is a pretty damn good way to make money.

LMAO WTF, they were just $8 a couple of weeks ago.

[Bardo]

Really, another one of these threads?

[AngryTroll]

There was an interesting point made at the beginning: SCG makes almost nothing running the actual Legacy Opens. The cash they take in in entry fees is paid out as prizes.

Of course, being the biggest dealer in America and selling cards for the tournament pays the bills, but they certainly lose money on ever person that pays the entry fee and doesn't spend any other money over the weekend on singles, sleeves, or supplies.

[lordofthepit]

They also lose a lot of money supporting their Player's Club.

Depending on your "level", benefits include:
- a complete playset of every new Magic set
- appearance fees (WTF?!) at SCG events, up to $250
- free entrance fees
- free sleeves for every event

Between that and their prize support, I imagine they're losing a lot of money on running the tournaments, but maybe they make up for it when people are forced to buy their supplies on site (or from people trading as well).

Also, their SCG Legacy circuit has increased the value of their Legacy inventory.

[jandax]

Even in a factory-direct market, WotC is losing tons of money on each Pro Tour. Each GP that breaks even is a good one, financially. However, they're a drving reason to play the game and it's one of the best business expenses they're making.

If SCG is making money on their circuit, they're doing it wrong.

The right play being to up the bar once things are stream lined. Multiply effort and stay in the red. Business will grow to support it. In the end, these cards are meant to be played. They're facilitating that end.

[Malchar]

People wouldn't show up to tournaments as often if there was a huge differential between the entry fee and the prize. The expected value of attending a tournament is such that you basically break even overall, which is the best SCG can do without actually flushing money down the toilet. As with tournaments at local game stores, the event is basically just a venue to sell other goods (or to buy up cards from players). Not to mention, while I've never been to an SCG event, I don't imagine the staff live in lavish luxury. Most of these people probably work at least partly as a labor of love for the game.

[dahcmai]

Really, another one of these threads?


lol of course.


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