Did this cost your salespeople money?
Wed, 05/25/2016 - 17:32 — Steve DeLay
Government move last week could cause a huge shift in how sports teams employee salespeople
If you've been in the sports business for a while, you know it's long hours for low pay.
I remember starting at the New Jersey Nets. Get in a 7:30am to start making calls. Appointments all day, leave at 5 or 5:30pm after a few late afternoon calls. If it was in-season, we stayed at the game and visited clients and prospects. I always felt game nights were a tremendous opportunity to strengthen relationships with prospects and encourage existing clients to buy more. It was one of the best angles for increasing my business.
These days, minor league teams use their sales staff for all kinds of activities, not just selling tickets but game night responsibilities. It's the mentality that you can work someone to death and there will be 10 more people in line to take their job. Let's be clear. I don't subscribe to that philosophy. If you work them to death and they leave in a year, you're starting all over with a new crop that has to be retrained. I'd rather have them work reasonable hours focusing on selling tickets, however they need to. It could be game nights, networking events or just getting in early to get organized.
Last week, the federal government changed the rules.
Previously, the threshold for having to pay overtime to someone was if they made roughly $23,500 or less. If you were a ticket salesperson with a base salary of $24,000 and earned commission, you could work as many hours as you wanted. And, your team could make you work more than 40 hours/week without paying you overtime. So, if you got in early to make calls or get organized, you could work late. Or, you could work game nights. There was also some minimal 'administrative, professional or executive' requirements that had to be met as well. That's all changed.
Here is the Department of Labor fact sheet for the new overtime rules. The new rule states that unless your total compensation totals more than $47,700, employers are required to pay you overtime for any work you do. 10% of that total compensation can be bonus or commission. The way I'm interpreting the rule throws salespeople in to a bit of a pinch. They can't 'volunteer' to work late or get in early. If you show up at 7:30am to start making calls, you're out at 3:30pm. The employer has to pay you overtime if you stay later. If you want to work games to visit with clients, that's fine, you just show up at 2pm that day so you can stay until the game ends at 10pm.
The law makes sense for fast food managers and others who's income isn't primarily based on commission. For a salesperson, especially at a sports team, this could cost a boatload of money. Teams will shift employees to hourly rates, clearly a downer of a feeling. Teams will force salespeople to leave the office. Salespeople won't be able to 'work' games if they worked the day in the office. Want a salesperson to go to a networking event in the evening to generate leads? They'll have to come in two hours later in order to be able to be held to the 40 hour work week. Have an evening meeting, even if the employee wants to come in at their normal 8:30am hour, they can't unless you agree to pay them overtime.
The paperwork for smaller staff teams could be insurmountable. Our team in Savannah, GA has seven full-time employees, three who are ticket salespeople. Every one of the seven employees save for possibly the team president are paid less than $47K. Keeping track of all the staff hours just adds additional work to an already overworked staff. Some might say just hire more people. That's not realistic as a business if that additional person makes a huge dent in to your already limited profit.
Ironically, the usually liberal media reporting has been focused on how this new law could negatively impact businesses. If you Google, 'new overtime laws 2016', most stories are about how this new law will hurt employees and businesses.
Here are a couple that are sports related.
I'd like to hear more about how your team is dealing with these new laws. Send me an email at email@example.com and I'll publish the best ideas and strategies.
Steve DeLay is the co-author with Jon Spoelstra of "The Ultimate Toolkit to Sell the Last Seat in the House" and "The Ultimate Toolkit - Sponsorships", complete strategy, tactics and training systems for teams to ramp up ticket revenue and sponsorship revenue. They are being used by more than 170 teams around the country to increase revenue and pay those salespeople big commission. You can reach him at firstname.lastname@example.org or follow him on Twitter @SteveDeLay2.