Want to see how Bain & Company conducts case interviews? Today is your lucky day.
In this session, you'll see how a Bain-style case interview is run and how a top candidate (who recently accepted a BCG offer):
- Builds and communicates a framework
- Works through mental math
- Answers brainstorming questions
- Drives to a strong final recommendation
AND, how a former Bain consultant:
- Leads a case interview
- Provides feedback and assesses candidates
Follow along:
4:34 - Case prompt
5:07 - Recap by candidate
7:01 - Case framework
24:58 - Final recommendation
27:07 - Feedback by the interviewer
Catch the case below and reach out if you have any questions!
Additional Resources:
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Work with Pranav via 1:1 case coaching
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Bain Private Equity Case Interview Example Transcription
Pranav Aggarwal
Just to give a brief introduction about myself, I'm from India. Right out of undergrad I worked with Bain India for a couple of years, about two, two-and-a-half years. My first year was spent doing some generalist cases across industries. My second year was spent mostly in the financial services space, where I delved deeper into it. And those were cases not just in India, but across the globe as well. We were working with partners and bringing the expertise in as well. Post that, I moved into my family business, which is in the financial services and hence the interest within financial services. We have an NBFC, which is like a specialty finance forum in India. I started the digital lending side for it and it's growing fortunately, right now.
Post that I decided I think the MBA might be a good spot to go to and good decision to go to, hence I'm at Cornell right now. And while I'm here, I thought doing a couple of years back at consulting and then heading back to India might make a little bit more sense. And throughout this process was fortunate enough to get an offer from BCG, interned with them over the summer in the SF office, and now heading back there in 2023. So that's my story. Taylor, would you mind giving a brief introduction and also telling us and the audience at large what was your strategy while tackling these cases, given you recently received a BCG offer?
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Taylor Robertson
Yeah, of course. Nice to meet you. Pranav. I'm Taylor Robertson. I'm a senior at the College of William and Mary, majoring in finance, so a non-target school. But I just recently accepted an offer to join Boston Consulting Group in Washington DC next year. When it comes to my background a little bit, I had my first internship this past summer at a small financial software consulting firm called SC&H. So this is my first time we're actually doing cases though, and preparing for strategy consulting interviews. I think I found out about MBB late June. I actually didn't know what BCG or Bain were in early June of this year and did all of my prep in the space of a month.
I did 25 live practice cases with other students at my college, about half of them, and half of them with professional consultants to prepare for my final round at BCG. So going into that I had about 25 practice runs. Since then I've done about five other cases, just like my actual interviews with BCG. I had interviews with EY Parthenon and got an offer there as well. So this this will be case number 30 for me. So if you all are measuring where you're at in your progress, just know that's where I've been to get me to this. And we all have different starting points and different ways of getting there. My big things with cases are looking at it very analytically.
What are the decisions that I'm going to have to make to push the case forward. I think there's four big things to understand there, which is one your clarifying questions. They really give you the information beginning that you need to push forward. Secondly, the types of questions you're going to get later. You're going to get qualitative questions and quantitative questions. And so the ways that you approach those are going to be a little bit different, and to really address them well, you've got to be able to recognize those and what kind of question you're being asked. And then finally, just that recommendation, and being able to bring in everything that's been told to you so far throughout the case, and really bring the critical information there to really seal the deal at the end of the time.
Frameworks are important, but I always come in with a customized one right then in there when I hear the prompt. I don't bring in any sort of framework that's been laid out, although those were helpful to study at the very beginning. And I found Management Consulted's YouTube videos really good preparation for me. But so happy to be here today to do a case with you, Pranav.
Pranav Aggarwal
Perfect, thank you for that. I think that's really good insight. I think personally, for me, as well, I did about 40 odd cases by the end of it that includes my interviews, my practice cases, etc. I was about the 30-32 case mark before heading into my first interviews. I think like you said, this gives a good benchmark for everyone as to what the timeline is, and how what preparation might look like. I do have a case ready for you. How I like to run these is we can run through the case, and I'll be taking notes in the middle. So don't mind me, if I'm looking down, during our chat. That's me taking notes. And at the end of it just run from the top and see the areas that we can improve on and you know, and then have a path forward. Does that sound okay to you?
Taylor Robertson
Sounds great, Pranav. Looking forward to it.
Pranav Aggarwal
So let me know when you're ready, and I can start with the prompt.
Taylor Robertson
I'm ready.
Pranav Aggarwal
So our client is a Private Equity firm that is considering buying the Philadelphia Phillies. The current team owners approached our client about purchasing the team for $1.1 billion. That's billion with a B. The Private Equity firm has engaged our consulting firm in a due diligence process and wants to understand whether they should make this investment or no.
Taylor Robertson
Sounds great. So just to clarify, we're working for a PE firm who's been approached to buy the Philly Phillies for $1.1 billion by the current team owners. Our clients are looking to us to do due diligence and advise them on whether they should make the investment or not.
Pranav Aggarwal
Yes.
Taylor Robertson
Okay. Just a couple clarifying questions for you. I'm curious if we have any benchmark for a rate of return or profitability that we're looking out of acquiring them, if we did choose to do it.
Pranav Aggarwal
Not as of now. So the motivation when purchasing this is the Private Equity firm is, and the Managing Director is an extremely avid Phillies fan. So that's the motivation behind it. But obviously, having said that, they don't want it to be a loss-making investment.
Taylor Robertson
Exactly. Exactly. I'm also curious if we know about any maybe recent sales, or any of the other minor league baseball teams that have been bought or sold recently, just to kind of get an idea of value.
Pranav Aggarwal
We do not.
Taylor Robertson
Okay. And I'm also curious, do we see this being a potential strategic buy for us? Would it fit into our PE forms portfolio, or do we have any synergies that we would realize with any of our other assets? Or would this purely be something that we keep hands off of most likely and just seek to find a return on through selling it later?
Pranav Aggarwal
We do have a few of our firm in general who specializes in operational efficiencies. And so we do have a little bit of those.
Taylor Robertson
All right. operational efficiencies, good to know. And I asked about rate of return, but are there any other metrics of success that I could be looking at in terms of whether or not we should make the purchase or not?
Pranav Aggarwal
Nothing as of now. It should be profitable, it shouldn't be a loss leading venture.
Taylor Robertson
Sounds good. If you'll just give me a minute to organize my thoughts then.
Pranav Aggarwal
Perfect.
Taylor Robertson
Okay, so in order to approach giving a recommendation to the PE firm we're working with on whether or not they should buy the Fightin Phils, I wanted to look at three main things. The first being profitability of the team, if we were to acquire. Secondly, the market right now for minor league baseball. And then lastly, the third thing, the operational efficiencies that we could contribute, if we purchase the team. So going a little bit more in depth to the profitability of the acquisition of the Fightin Phils. I mainly want to look at our cost and our revenues. The costs, you've already quoted a $1.1 billion upfront cost that we've been approached with by the current team owners, but I'm also interested in learning about those annual costs that would be associated. Fixed, like maybe stadium rental, but also variables like food that we sell at games, or also looking at the salaries that we pay players. And really trying to get a sense of those annualized costs that we would have every year as well.
Then when it comes to revenues, I'm really interested in looking at all the different forms of revenues we could see like tickets, merchandise, sponsorships, advertisements on in our stadium, selling the licensing to TV, food and drink within the stadium, all of those different forms of revenue. Next, looking at the market for minor league baseball right now, I'm really interested in seeing if this is an attractive market in terms of how many fans we have coming to the stadium, trends affecting this. What has it been like in Philadelphia and the past few years? Where do we possibly see this going? And also in other markets. Do we see minor league baseball teams being successful or increasing their fan base? What do we see our competitors doing.
Lastly, the operational efficiencies. You mentioned that the PE firms we work with a specializes in this. I'm interested in seeing what sort of resources we have to maybe cut down on labor, being really efficient with sourcing, merchandise, food, getting great deals on that. Also managerial, are we going to seek to improve the team and their performance in the minor league baseball league. And then lastly, PR. Do we have relationships right now that we could take over handling the PR of the players and of the team. Do we have the ability to really blow that up and really gain fans, gain profit. Out of this, I'm really most interested in looking at most likely our costs and revenues first, and really interested to see what kind of revenues they have, in order to see whether just $1.1 billion acquisition costs makes sense in the beginning.
Pranav Aggarwal
That makes complete sense. I think we do have some data for you, so excited to get into this. I'll be just giving you the other revenue data, we have both the revenue and the costs. Let's start with the revenue piece. I'll be shooting a bunch of numbers at you. I think you did a great job of breaking down the different types of revenue streams that we have. So we have five revenue streams: ticket sales, concessions, merchandise, media rights, as well as sponsorships. For ticket sales, we have a stadium of 50,000, of which 90% are standard seats, and 10% are premium seats.
Our standard seat fill rate is 55.56, and standard seat price is $25. Our premium seat fill rate is 75%. And our premium seat price is $100. And we have 80 games in a season. So that's for ticket sales. For concessions, we sell about half a million per game. Half a million in concessions, again at home games. In merchandise, we sell a million units per year at $50 per item. But we only earn 20% in royalty from this. From media rates, we get about $120 million, and from sponsorships we get another $50 million.
Taylor Robertson
All right, just to clarify. Media rights you said were $120 million.
Pranav Aggarwal
Yes.
Taylor Robertson
Okay. And then one other clarify. The seat fill rate for the standard seats. Did you say that was 55%?
Pranav Aggarwal
55.56.
Taylor Robertson
55.56% fill rate. Okay, perfect. So lots of information here just to kind of bundle right off the bat. Media and sponsorship for a year, I can go ahead and call that $170 million. And I also have that concessions are $500,000 per game with 80 home games in a season, that's going to be $40 million in contributions from concessions, so looking at $210 million for sponsorship, media and concessions right off the bat. And now we can deal with the little bit more tricky items of merchandise and tickets.
Going into merchandise first, we sell 1 million units in a year at $50 per item, but we only get a 20% of that $50 item. So we're only getting $10 per item with 1 million units in a year we're looking at $10 million contributed from merchandise. We're looking at $220 million in a year, except for tickets. So now looking a little bit more in depth at tickets, we've got two types, our standard seats and our premium seats. So our standard seats we have 90,000 of, so we have 45,000 standard seats. Out of the 50,000 seats 90% of your standard. And then we have 5000 premium seats in the stadium. So looking at the fill rate for those premium seats, it's 75%. So that is going to be 3750 seats that are filled in an average game. And those all sell for $100, each of those seats. So we're looking at $375,000 per game from our premium seats.
And now I'm going to take a look at our standard seats. So out of our 45,000 seats that are filled standard, or sorry, out of the 45,000 seats that exist that are standard, we have a 55.56 fill rate, which to me, I'm trying to think of if I've got a fraction that is really close to that. That's right above half, but definitely less than, two-thirds definitely less than three-fifths even. So I'm looking at something in between one-half to three-fifths, so that's I think between five-tenths and six-tenths.
Pranav Aggarwal
Yeah, let's go with five-ninths on that.
Taylor Robertson
Five-ninth. Okay, that sounds great. So in the case of five-ninths of the seats being filled, that is just going to be 25,000 seats that are filled. And with each of those seats at a $25 cost, we're looking at 625. Let me check on that. Now that's going to be - so we've got 25,000 seats filled $25 per. That's going to be $625,000 per game. And that's from the standard seats. So now I can multiply by that 80 home games per year. I'm going to go ahead and add together my premium seat figure and my standard seat figure and that is going to be $1 million in ticket sales per game. With 80 games, that's going to be $80 million from tickets. So adding that to my $220 million in a year from all the other four types of revenue, we're looking at a total of $300 million in revenue per year.
Pranav Aggarwal
Yeah, that number sounds great to me. On the cost side, we have player salaries that are $110 million.
Taylor Robertson
Sorry, one second. We're going straight into cost, sounds good. I just want to say at $300 million per year, it's definitely going to depend on the cost, whether this is a good investment or not, and also how many years were willing to wait to get a return on it. But now I'm ready to go into costs. Sorry.
Pranav Aggarwal
So player salaries, which $110 million, front office costs that are 420 million, sales and advertising, which is $50 million, and stadium facility costs that are $20 million.
Taylor Robertson
You said that was the last one was $20 million for the stadium?
Pranav Aggarwal
Yeah.
Taylor Robertson
Perfect. So with salaries of $110, front office costs of $20, S&A, or selling administrative $50, and stadium of $20, that is going to be $200 million in costs annually. And we have a revenue of $300 million, so we're looking at an overall total annual profit of $100 million. So taking into account that upfront cost to purchase the team of $1.1 billion, it take us 11 years at the current profitability to pay off and make this be a sensible investment. So I'm interested to see if there's possible ways that we could either increase revenues or definitely decrease costs, because we have a specialization and operational efficiencies to really get this year figure down. The PE business is not in the business of waiting 11 years to see a return.
Pranav Aggarwal
Yeah, I think we agree with you on that. Would you mind valuing the firm for me at this stage? Is it any way that you can think of that we can value the Philadelphia Phillies right now?
Taylor Robertson
Sure. Do you have any possible multiples for other minor league baseball firms? That could be one way.
Pranav Aggarwal
Yeah, we usually use a 10x multiple.
Taylor Robertson
A 10x multiple, okay.
Pranav Aggarwal
Yeah, on profit,
Taylor Robertson
On profit. In that case, then the current valuation would be just $1 billion. Which is $100 million short of that $1.1 billion figure that the Phillies current owners are looking for.
Pranav Aggarwal
Yeah. What do you think could be some of the ways in which we can improve this valuation?
Taylor Robertson
Of course. So looking at our specialization and operational efficiencies, I'm really interested in looking at these costs, when it comes from front office S&A. Our selling administrative expenses are $50 million, and outside of salaries, that's our biggest line item, I'd be interested to see if we can cut down on the number of people we have working and selling administrative, or also just combining it with our other current portfolio, the current employees we have maybe in some of our other portfolio companies, see if we get that down.
I'd also be interested in seeing about salaries. Are we paying what other teams are paying? Are we paying more or less. Are we overpaying possibly our players and seeing if we could cut down there. And when it comes to the stadium, as well, we might be able to negotiate better than the current team has on that annual rate of $20 million. I'm also interested in looking at increasing our revenue. So I'd be interested in looking at can we get the seats filled more, can we make more premium seats. It seems like our premium seats are filled more, at 75%, as opposed to 55%. So I'd be interested in converting some of those standard seats to premium seats, and be interested in talking to the stadium about that, and maybe we can split costs on them installing that, and ultimately it paying off for us in the long run on the amount of revenues we see out of those seats.
I'd also be interested in looking at our concessions pricing. It seems like $500,000 per game is quite a bit for the amount of seats that are filled, which is about 28,000, or right around there. It's 28,750 in a game. So someone is spending quite a bit of money just on concessions. Are they willing to pay more and are there ways that we can get that royalty up higher on the merchandise as well.
Pranav Aggarwal
I think those are all great suggestions. So our analysts did some analysis and we have something for you to look over.
Taylor Robertson
All right. Okay, so I'm taking a look right now at synergy analysis, which was pretty in line with operational efficiencies that as a part of my framework, I'm looking at potential boosts to total revenues and team cost comparison. My eye is immediately drawn towards the team cost comparison where it looks like we're quite similar to the league benchmark, and the only area where we have much variance at all, are those sales and advertising. So I was right in saying there's probably some operational efficiencies we can seep out of here and decrease that $50 million S&A cost. And then, taking a bigger look at potential boost to revenues, this is where we could really see some good growth here. Revamped concession offerings is just a 1% total boost, which is something I mentioned, but it seems like dynamic ticket pricing is going to have the largest contribution with renegotiating our local media deal. So our tickets of 80 million, that's what we have currently, as a big line item for us, but also that media deal of $120 million is actually bigger. So we're making more money off of our media deal than we do off our tickets. So a 3% increase on our media deal seems to be very lucrative. I'd like to go ahead and calculate this potential total boost revenues, if we did all four of these changes. Does that sound good?
Pranav Aggarwal
That sounds okay, but just to call out that this would, these numbers are to total revenue, and not just that particular line item.
Taylor Robertson
Okay. So in that case, the dynamic ticket pricing is actually going to be the biggest contributor to increasing our revenues. And so that's not changing the layout of the stadium, that's just having seats fill at different prices, depending on whether someone buys two weeks before or buys with the group or buys day of, hour before, comes midway through a game offering a really range of prices, where someone could be paying $5 more than the person sitting next to them. So yeah, so to take this figure of $300 million in revenue that we have currently, and add a 4% dynamic ticket pricing increase, if we were to institute this, that's going to be an extra $12 million in revenue from dynamic pricing. From renegotiating the local media deal, we're going to see a 3% increase, so that's going to be a $9 million increase in revenue.
From attracting higher value sponsors, right now we have a sponsor deal of $50 million. But our total revenue is at $300 million, and we're doing a 2% increase, that's going to be a $6 million increase in revenue. And then when it comes to revamping our concession offerings, that looks to me like a 1%, which is interesting, this graph is doubled up. So I am kind of curious, we go to the top line of each of them. So I assume that, am I talking about four-and-a-half percent, or am I talking about 4%? It is 4%. 4%. Okay, sounds good. So then these revamped concession offerings at 1%, that's just going to be an extra $3 million in revenue. So altogether, this will be $30 million in extra revenue. So that's a 10% increase in total revenue from the previous year. And then we'll have a profit margin of $130 million.
But I'm interested in seeing if we can decrease our sales and advertising costs to the league benchmark, or even possibly below it, because I'm going to assume that not every team in the league is owned by a PE firm as great as our client. And so they're not going to have access to the operational efficiencies we have. Kind of taking a look at that graph there, it seems like it goes from about 125 to maybe 180. So for a 180, yeah, 175. That'd be the 50 million for us. But then it looks like it's maybe like $10 million dollars less. So they probably have S&A of 40 million, I'd be interested in seeing if we could get it down to 30. Does that sound reasonable?
Pranav Aggarwal
Let's take the lead benchmark for now.
Taylor Robertson
Sounds great. So then we're going to have a decrease in S&A, sales and advertising administrative of $10 million. So that's going to get us to an increased profit margin of $140 million annually. Yeah, so taking a look at that, that's a 40% increase on our profit before.
Pranav Aggarwal
What does that bring a new value to?
Taylor Robertson
That will bring our new valuation at a 10 times multiple to $1.4 billion, which is higher than the $1.1 offer price by the current team owners. But I am really interested in looking at our metric as a PE firm on the years required to return because for me, this also seems like it's still going to be likely over five years to make a return.
Pranav Aggarwal
Yeah, I think that's a great call out and that's something we can look into as we delve deeper into these due diligence. But as of now the CEO of the private equity firm is about to roll into office. Do you mind just wrapping it all up for us and presenting the recommendation to them?
Taylor Robertson
For sure. Can I get 20 seconds?
Pranav Aggarwal
Sure.
Taylor Robertson
Okay, so I would recommend to the CEO of the PE firm, who is a big fan of the Fightin Phils, that he gets to purchase them. And I recommend that he does. So currently the team has approached us to purchase at $1.1 billion. Doing evaluation, I've found that they're worth $1.4 billion. And we're able to see this value based on some operational efficiencies and synergies that we can apply, like dynamic ticket pricing, renegotiating sponsorship deals, media deals, and then revamping concessions, and also decreasing the current S&A costs of the Phillies to the league benchmark. And by doing this, we will see that valuation of $1.4 billion.
Currently, as it stands, the valuation of the company is below $1.1 billion, at $1 billion. So what we can offer by purchasing the team is going to make it valued higher and is worth the investment for us, especially as a big fan. But there are a couple of risks here. And that would be that the dynamic ticket pricing doesn't work out the way that we expect, that has the largest contributed to increasing our revenues. And if that doesn't work out quite as well, then we could see that we don't see the revenues that we expected. And I'd also be worried that we get outbid. I'm not the only one that can do this calculation and the valuation of $1.4 billion, only being offered to buy at 1.1 billion, there could be other interested competitors here.
So I'd also be interested and also doing the next steps of studying this due diligence quite quickly and purchasing as quickly as possible. But also, I'd look at what kind of year return are we looking to see, because you are a big fan. But if our other portfolio companies are making returns in four to five years, then why would we accept this company if it's going to be on a longer time span to get us a return.
Pranav Aggarwal
Thank you. Yeah, how do you think you did before I start?
Taylor Robertson
I don't have too many issues with my performance. I appreciate you giving me the five-ninths. My fractions maybe aren't absolutely amazing, but I felt good about it. I thought it would go on maybe a little bit longer, but I'm happy with where I ended up.
Pranav Aggarwal
Yeah, no, I think you did a fantastic job. I think this is as close to a great case as one can have in an interview. So I think you did a bang up job overall. But let me start from the top. And again, this is, at this point, I'm just nitpicking the take it from that grade to the absolute perfect piece, which at least I never had a perfect case.
Taylor Robertson
I don't think anyone has. You can always be better, so I appreciate all the advice you've got.
Pranav Aggarwal
Yeah. So again, starting from the top, I thought your prompt and your recap was great. Your clarifying questions. I loved how you kept emphasizing on the ROI because you were trying to solve for something, and you wanted that exact figure. And when I didn't give it to you, you took it in your stride, and were like Okay, fine. I've asked twice, let me move on from this. Profitability is like the only thing, your questions are on point, trying to value what the other purchases are your synergies. I liked it. I liked it. I think for private equity cases, especially for this case, I think these were extremely strong questions and a great starting point for you. On your structure, I think the overall structure was brilliant. The way you deliver it was great.
In terms of timing, I thought it was spot on. I would love to start with an answer first though. Like given how hypothesis-driven both Bain and BCG are, unlike EYP and other consulting firms. I would love to start with that. So what I would have done in this case is I would have said after coming back, after taking some time, I would have probably gone like my initial hypothesis here, or my initial for answer here would be that we go ahead and buy the Fightin Phils given you're an avid fan, but obviously in order to validate that hypothesis, I'd love to look at three broad areas, or four broad areas. In your case, three broad areas. I thought the buckets made sense. You went about it right. You went horizontal and then vertical within each bucket. You were MECE within each bucket as well and across. So I enjoyed that. I loved the drive.
A lot of people forget that once you're done with the structure, the case isn't over. The case is just begun and the structure is just your roadmap. So I love that you drove to profitability, and that's your first bucket. So that first bucket, which is the most important one, you drove that building, do you have data for that. And that's great that I had, but even if I did, I liked the way that you were driving. Moving on to the valuation calculation, I thought you did a bang up job. Your math was on point, it was structured. I think one thing I'd love to see here though, is before you get into the math,
I'd love for you to just chat with me and tell me your strategy as to what you want to do with the numbers. I love that you went for the low hanging fruit first. Like calculating everything apart from tickets because those are the straightforward numbers. You had a number set aside and you were confident with those numbers. It gives you confidence as well that you have done the math right for 90% of it. It's only one piece that's left. So I thought that was a great strategy. But even within the tickets, I would have loved to see, like a layout first, approve that layout, because at the end of the day, it's a conversation. I think that engagement was slightly missing on the ad revenue piece.
But like you did a bang-up job with your math I thought it was structured, it was spot on without any errors. And that five-ninth didn't throw you off. You took it in your stride and was like it's 55.56. Let me see what's the closest fraction I can get to, and in 90% of the cases, interviewers will just give it to you, if they see you're trying to get to the number making life easier. And that's usually a hint as well that like it's 55.56, it's usually a hint that this is going to be a fraction which will make my math easier. Yeah, so I thought you did a great job on that. You took the guidance when I gave you to calculate the valuation because ultimately look for any P, you're going at it with the right way with the breakeven stage. But you took the guidance, saying Okay, let me let me calculate the valuation. So I love the overall piece on that.
Moving on to the exhibit, I think I'd love for you to takes maybe 10 seconds, 15 seconds, when you see the exhibit at first, digest the data, and then come out swinging. And then come out with that insight or whatever, the so what of the exhibit is. I think if you would have done that, you would have been a lot more structured within the exhibit itself. It came across that you were explaining the exhibit to me as you were going through it. That's the understanding I got. I don't know, was that the case that you felt as well<
Taylor Robertson
Yeah, I would say that like in terms of calculations, and also just seeing those different individual items, and you definitely pointed out to me that it contributed to total revenue, and not specific revenue for those line items. So that was something that I missed, it was like, good to pick up on from you. I definitely knew where I was going with like the cost side and the decrease and S&A. But in terms of the revenue side, I mean, I wasn't fully sure that I was going to get to a calculation on total revenue until I started talking about it, just because I didn't know if we were going to maybe go a bit more in depth on any of those, or whether we were only going to do one or two. So I wasn't going to recommend off the bat, let's do all four. Because I also didn't know if we had the capability to do all four, that kind of thing. But I definitely think it would be helpful if I came in swinging it away with knowing like, I would like to do all four. And I can lead us into a calculation on the additional revenue contribution, that would be very strong for sure.
Pranav Aggarwal
Yeah, usually how I tackle an exhibit is, I'll take about 10-15 seconds, depending on the difficulty of an exhibit. Obviously, if it's just like numbers written on a table, I might not take that much time. But if it's like a two by two, where you have a two-sided chart where you have graphs, as well as some other nuance going on, I take some time. How I come out is my I give like a one-line summary. So in this case, it could just have been this is ways in which we can improve evaluation, both on the revenues and the cost side. On the revenues, I can see the dynamic pricing will contribute more store revenues, actually leading down to a few other options. And on the cost side, I can see that we're spending a little over the league benchmark. And advertising piece, I'd love to understand if we can bring it down to the league benchmark or even lower, as you were saying.
I think while you were speaking, I love the second level insights that you were giving. But I would have loved it if this was slightly more structured. Again, your math, in general, the calculation was really quick. I think it could have been overall faster, given these are percentages, and the number that we're multiplying it to is the same. So we could have added all the percentages up and multiplied it just at once. So if you just would add all of that, that's 10% multiplier, that's 30 million, you're all of the way.
Taylor Robertson
I definitely could have done that. I think that one thing I was also interested in seeing is like if there were like information that I didn't have. Like implementing each of these different things, what if there was a $25 million startup cost implementing a dynamic ticket pricing, like we have to purchase an app or something like that. So I definitely think I was interested in looking at each of these segments as well on their revenue contributions, because I wasn't sure whether I was going to recommend that we do all four. Because one of those four might have had a really high investment cost to institute.
Pranav Aggarwal
I get what you're saying. I think that's a brilliant call out. I think that'd be the place where you just ask the interviewer upfront, just ask them and get that out of the way. If you have an assumption, state it out. It just makes life easier for the interviewer because I've been in your shoes as well. And I've been like because you've done so many cases, you can in another layer that this is very much a possibility where you're like, Okay, these are my four options, but then they have costs associated with it so you don't know which one you would like to do. So that's a great point. But I would just clarify with the interviewer. I think you're right. Yeah. But otherwise, I thought, overall, it was it was fine. It was just things you could have done faster/better.
I think on the recommendation piece, you started strong. But in the middle, I think I got lost at some point between your risks and your next steps. So we spoke about dynamic ticket pricing, we spoke about the returns, like is this comparable to that. I didn't particularly hear of mitigation for the risks that you were testing, as well as what concrete next steps should be. I think a great recommendation is just simple like how you started. Yes, we purchase it because that's the original question. Why should we purchase it, which is because it's above the valuation that they are asking for, given operational efficiencies. Great, that's out of the way. What are the risks involved with it? So that's you say dynamic ticket pricing. We might not be able to achieve the same figures that we are estimating. How do we mitigate that risk in this case would be let's run a pilot program for a few games. Let's see how that works. Does it match up to our estimates. So that becomes a mitigation. And a next step could be let us run that pilot program for fall. It's simple.
Taylor Robertson
I think I dropped the risk on the dynamic ticket pricing. I think I mentioned that if we got outbid and that my next step was that we should bid quickly and do this due diligence quickly. But I did drop the dynamic ticket pricing one. I think partly was because I wasn't sure whether that analysis had been done by us or by someone else. And I could have asked, but it wasn't a time to ask in a recommendation. If we had done it I going to assume we did it right as a firm. But if someone else did it, then I'd recommend that we should do it again.
Pranav Aggarwal
Yeah, that's fair. That's fine. But usually I'd stick to like one or two risks, but I'd give mitigations for all. Yeah, but I think overall, you did a bang-up job. This would have this sort of flown by for sure. No, for sure. Like on the revenue side, you gave me all the revenues that are already there. Otherwise, that's a question. Usually people stop at tickets and beverages, like tickets and concessions, which tells me that you grasped the problem, and then you've contextualized it. So I think your structure was really strong.
Taylor Robertson
Yeah, thank you so much. It was great to do with you. But yeah, just critiquing myself a little bit more too at the end, I think that one thing I could have done maybe even more so if it was more complex, like mentioned other valuation strategies. I assumed it was going to be a multiple that we were going to use, but it could have been, it wouldn't be a DCF. But I could have looked at it a different way as well, like a precedent transaction where you're just looking on the last three weeks to sell based on their fill rate of seats, or things like that. But that was just a small thing. Overall, I felt like it was a good one. I enjoyed doing it. And yeah, I guess my advice for anyone else who's doing cases right now would be to recognize some of those asking I think about the ways the different costs, like the different revenues. I think I've already mentioned them all. But that was probably a qualitative question, too, on like, what different ways are we making revenues. And then also, you asked about the synergies I believe. I don't think I sorted all that much.
Other than I definitely sorted out the revenues, or sorry, I think I sorted out the revenues. Yeah, I definitely think if you can push forward as the interviewee it's always helpful to do so. If I take the question out of your mouth, and I think that's a good point for you, as the interviewer, or as the interviewee, one could say, Yeah, I definitely think also, this case had a little bit less clarifying information that I think I normally get out of cases. I don't know if maybe I just didn't ask the right questions. But you definitely need to be prepared for that if you were hoping for information you didn't get. So I'm glad that you mentioned I kind of asked twice to see if probing around if there was going to be a rate of return. But I was also curious to know if there was like a timeline and didn't get that either. That ultimately didn't come up, which you think you might know how a PE case runs and that those were like integral parts of it. In this case, it wasn't.
Pranav Aggarwal
Yeah, you're absolutely right. I think it's because looking back at my experience, every time I asked for one, I never got a number. I never got a number. It was always, if it's about profitability, they'd be like, the more is better. So just be prepared for not getting a number and not having that thing in your head be like, Okay, I have to reach $200 million, I have to reach 20%. It just like flow. If you, if you work better with a number, write the number on top of your page, and just assume that's the number and go with it. If you're okay with abstract, that's fine as well.
Taylor Robertson
And I will say that to the people listening as well, the more cases you do, the more familiar they get. So I haven't done this case before. But I've done ones that are very similar to it. So I'm not a sports fan, I've maybe seen five or so baseball games in my life. So being able to say things like concessions, sponsorship, merch, tickets and advertising, that doesn't come from your own knowledge. Half the time, it's case knowledge, because you've done enough cases to see that those kinds of line items come up. You definitely want to bring in your personal knowledge whenever you can. But the more cases you do, the more familiar you get with what kinds of costs and revenues are going to come up. And then that really can help you push forward on what the key things are.
If you didn't mention that the ticket sales and beyond ticket sales and concessions, a couple of the major things to renegotiate that came up in the graph were the sponsorship, the media. So if you can bring those up, and really do enough cases to get all this kind of items just in your brain and be able to whip them out, then it's going to really help you to focus on the important things and be able to get those second level insights as opposed to asking what's the difference between sponsorship and an advertisement or not being sure about the different items.
Pranav Aggarwal
No, 100%. I think that's an integral part of it, especially for anything that's B2C. The interviewers will just expect you to be a little bit familiar, be it airlines, be it retail, be it sports, movie theaters, anything that's B2C, I think he expectation here becomes that it'll be slightly more tailored. And at least if it's a profitability base or revenue growth, there'll be more than just price into quantity, or more than just fixing the variables.
Taylor Robertson
Now, do you have any information on whether this was more of a first round case or a second round case? Because it felt to me like it was more of a first round, but I could see someone getting this in the second round, especially maybe if they're applying as an intern or something like that.
Pranav Aggarwal
This is a second round. It's a second round, but again, I call with it, it'll be like a first round or a second round. With either Bain or BCG more the interviewee-lead pieces. But I think it'll be either a round one or a round two. It's definitely slightly easier for a round two, but maybe slightly harder for round one. You did a bang-up job. You flew through this case. When someone sees you doing this, I don't think they'll think this case is hard.
Taylor Robertson
Yeah, maybe that was just me. I don't know. I definitely came in here today a little worried, like, Oh, what if I trip up and wanting to do a good job of modeling for people, like the kind of skills that they can learn and implement. But also not trying to be cocky about it, I definitely still can get tripped up on a case. I haven't done that in the last few. But especially financial services. I looked you up on LinkedIn, I saw you had done some stuff in industry. So you could have given me something with a hedge fund that might have had a couple of terms out of left field for me or something like that. I am a finance major, but I won't claim to know all that much about some esoteric parts of finance.
And so if you had asked me to calculate a rate of return, I think that is rare in a case. I've only maybe seen one set of maybe like 50 cases or so I've looked at. But it could have happened, or you could have asked me to do like a net present value of future cash flows and that could have made the case a little bit trickier. That's the other thing I would say too, is that you can do a lot of cases that are similar. Ultimately, they're all different. You're not going to get a case from a partner in a second round that looks exactly like something you've seen before. But 50% of it is probably going to share the exact same structure as another case you've done, if you've done enough
Pranav Aggarwal
Yeah, but I think on that, if you get something that you haven't done before, don't be scared and work with your interviewer. I think that really helps. Even on the job there's no way you can know everything. If you have that mindset where you know everything, you're not a good team player. You're not a good fit for any firm. So it has to be open minded. It has to be an open mind. It has to be okay I will work with the person who knows best and let me see where they take me I think.
Taylor Robertson
You should be excited that you're getting something different. I feel like I wouldn't want to walk into an interview and get a case exactly like one I've seen before. It takes maybe a little bit of the fun out of it. And the partners definitely want to see some excitement from you and eagerness to get to the, not just to get to the answer but the process, the journey along the way. If it's enjoyable for you, I think they really enjoy seeing that.
Pranav Aggarwal
100%, 100%. Thank you so much. Bang up job.
Taylor Robertson
Thank you so much.