Marketplace
Issue: 1976 March - Page 8
MARKETPLACE
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..
NEWSLETTER
PAGE 8, MARCH, 1976
Dverhead's
Eating
Us Up!
That's the cry heard 'round the na.tion - "Overhead's eating us up!" A cry that pours
forth from more and more operators' throats nationwide. A cry that has become so loud
and so frequent, many now wonder how many operations will be left to greet the '80s.
..
That's because many outstanding economists predict '76 will prove a good year - giv-
ing businessmen a chance to catch up - but that 1977 - because of all the huge deficits
created by gov't these past years and, furthermore, since the elections will be over and
politicos set for another 4 years
that 1977 will see a recession come into being that
will make 1974 and 1975 look like a picnic.
Once the polticos are set for another 4 years in office, these economists claim, taxes
will zoom. The picnic will be over. Price controls will again come into being. Unemploy-
ment will shoot up to new heights. In short, it isn't a pretty picture these economists
paint because, in addition, they foresee inflation reaching up into double digits in
1977 - as high as 25% - maybe even higher.
As taxes zoom, as prices go up to match higher taxation and, at the same time, to be
prepared should price controls come into being, overhead expenses will spurt to new
record high marks. Outstanding indicators - gasoline and oil - electricity and natural
gas - food - services of all kinds - labor's wages and fringe benefits.
,
..
"Overhead's eating us up" operators cry and continue doing the very same thing that's
causing this loud and wailing cry. Continue operating in the mid-'70s the way their
papas operated in the mid-'JOs. Giving 50% of the gross income from their extremely ex-
pensive games and music to their locations. Hurting for money - yet giving their money
away. Refusing to face up to the challenge of the new economy. Blanketing themselves with
fear they might lose a location or two •
Is it any wonder, then, that so many capable and intelligent operators have turned
to game rooms and mini-arcades, creating the biggest boom this field has enjoyed in
years? So doing they have rid themselves of locations where their chances for a decent
return on their investment continued to diminish because of growing costs and overhead
expenses. Locations where they couldn't arrange for the kind of minimum guarantee or
commission percentage they required to be able to continue profitably in business.
Business conditions are such today operators simply must change their methods. After
all, how long can operators cry, ''Overhead's eating us up", before inflated overhead
will actually eat them up?
..
..
NEWSLETTER
PAGE 8, MARCH, 1976
Dverhead's
Eating
Us Up!
That's the cry heard 'round the na.tion - "Overhead's eating us up!" A cry that pours
forth from more and more operators' throats nationwide. A cry that has become so loud
and so frequent, many now wonder how many operations will be left to greet the '80s.
..
That's because many outstanding economists predict '76 will prove a good year - giv-
ing businessmen a chance to catch up - but that 1977 - because of all the huge deficits
created by gov't these past years and, furthermore, since the elections will be over and
politicos set for another 4 years
that 1977 will see a recession come into being that
will make 1974 and 1975 look like a picnic.
Once the polticos are set for another 4 years in office, these economists claim, taxes
will zoom. The picnic will be over. Price controls will again come into being. Unemploy-
ment will shoot up to new heights. In short, it isn't a pretty picture these economists
paint because, in addition, they foresee inflation reaching up into double digits in
1977 - as high as 25% - maybe even higher.
As taxes zoom, as prices go up to match higher taxation and, at the same time, to be
prepared should price controls come into being, overhead expenses will spurt to new
record high marks. Outstanding indicators - gasoline and oil - electricity and natural
gas - food - services of all kinds - labor's wages and fringe benefits.
,
..
"Overhead's eating us up" operators cry and continue doing the very same thing that's
causing this loud and wailing cry. Continue operating in the mid-'70s the way their
papas operated in the mid-'JOs. Giving 50% of the gross income from their extremely ex-
pensive games and music to their locations. Hurting for money - yet giving their money
away. Refusing to face up to the challenge of the new economy. Blanketing themselves with
fear they might lose a location or two •
Is it any wonder, then, that so many capable and intelligent operators have turned
to game rooms and mini-arcades, creating the biggest boom this field has enjoyed in
years? So doing they have rid themselves of locations where their chances for a decent
return on their investment continued to diminish because of growing costs and overhead
expenses. Locations where they couldn't arrange for the kind of minimum guarantee or
commission percentage they required to be able to continue profitably in business.
Business conditions are such today operators simply must change their methods. After
all, how long can operators cry, ''Overhead's eating us up", before inflated overhead
will actually eat them up?
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