In The Beginning . . .

Unless you’ve inherited a building with a very large room with lots of tables and chairs, ample electricity, a broadband connection with a fat pipe, and a ready-to-go local-area network, then you’re going to need some money to pay for these things. The obvious way to raise money for these things is to charge an admission price to attendees, but the owners of the things you need usually need either money up front or at least a contractual promise to pay immediately afterward—a definite Catch-22.

Sponsorship seems like it might be a good solution, but sponsors expect to get something in return for their investment, and most sponsors need a LAN party to reach a critical mass of attendees before they’ll even consider sending help your way. Catch-22 again. What to do?

We think these situations explain some common trends among LAN parties: They started small and were initially self-funded. Fortunately for their organizers, the small size makes self-funding manageable, but these are still money losers, at least initially.

“[NETWAR] started off small, with buying the equipment and charging a cover,” says Travis Kreikemeier, Internet coordinator for NETWAR Omaha (www.netwar.org), which now operates 26-hour-long LAN parties with attendance figures hovering around 200. “For the first three or four events,” he continues, “it was a total money loss. Now it’s sort of a ‘break even’ proposition. We’ve been doing it eight years now, and probably everything is now finally paid off.”

Harry Mason, convention organizer of the Aces High Players Convention for several years, agrees. “[Getting started is] the really hard part. [Initial expenses] are all really out of pocket to get things rolling.”

We’ve heard similar stories during informal talks with other LAN party organizers over the years. Most start with the organizer buying (or using previously purchased hodgepodge collections of) switches, Ethernet cables, power strips, and extension cords; hooking the network up to their existing router and broadband connection; and then setting up a few people in the garage, basement, backyard, or spare bedrooms.

“The nice thing about network equipment is that it all gets reused,” says Mason.

Charging a small cover charge to help defray costs is appropriate at this level of LAN party, but not if you’re asking attendees to bring their own networking and electrical equipment to piece the LAN together.

The other big LAN party expenses at this level are tables and chairs. These can be rented inexpensively at party/event supply stores, but like networking equipment, tables and chairs can be reused between events. Purchasing what you need to get started, and then adding as attendance grows, makes better financial sense in the long run.

Getting Bigger, Getting A Venue

The next stage of LAN party evolution involves getting more space for the party, and spaces tend to break down into two categories: improvised meeting spaces and purpose-built meeting spaces. Surprisingly, one isn’t inherently better than another, and also surprisingly, one isn’t necessarily more expensive than another when the party’s over. However, purpose-built meeting spaces tend to be located within hotels, and hotels are really set up to have people staying overnight (or nights) in hotel rooms, meaning that LAN parties at hotels tend to turn into conventions. But hotels have certain advantages over most improvised spaces, as we’ll soon see.

Improvised spaces tend to be cheaper initially, but they also tend to have less infrastructure in place for LAN parties. “The biggest pain when moving venues is power and connectivity,” says Kreikemeier, “but there can be other problems, too. Can we have an electrician come in? Can we add a junction box? We’ve had a lot of venues turn us away after all the requirements. [When venues are attached to restaurants], sometimes you need to make deals with catering.” Many improvised spaces don’t have a robust broadband connection either, so you need to either plan on bringing in connectivity on your own (at your expense, of course), or you need to plan on only running games that use a server that’s hosted on your LAN. At NETWAR’s current home, connectivity is supplied by three cable modems brought in by Cox Communications, which can be a significant expense, though in NETWAR’s case, Cox is a premiere sponsor. (We’ll cover sponsors in a little bit.)

Some improvised spaces work out pretty well, though. “Venues where bands play have the wiring all set up for what we need,” says Kreikemeier. “We’ve also done it at family fun centers, where they have ample power set up for arcade games.” One was located after hours at a McDonalds restaurant, where at least there were plenty of late-night snacks available.

Purpose-built meeting spaces at hotels usually have some sort of infrastructure (even tables and chairs) already in place, but it’s up to you to ensure that it meets your requirements. We’ve already covered the technical requirements for electricity, broadband connectivity, and the LAN itself elsewhere in this issue (see page 64), but the nice thing about most hotels is that these elements are normally included in the room price, or can be negotiated into the deal.

“Everything is negotiable,” says Mason, “even things such as the bar rate, (that is, the price attendees pay for food and drink at the hotel bar), service fees, and security.”

Meeting rooms (even ballrooms) are generally priced against “room-nights.” In other words, renting a ballroom (and its infrastructure) might cost $4,000 all by itself, but the price goes down for every block of guest rooms that are booked by attendees. For example, this hypothetical ballroom price might drop to $3,000 if your attendees book a total of at least 40 room-nights, $2,000 if they book 75, $1,000 if they book 100, and totally free and clear if they book more than 120.

As you can see, creating a multiday event is a little like playing chicken. The larger the event with a greater attendance, the more likely it will actually cost less in the end. But if enough people don’t come out, or stay at the hotel, you’re on the hook for potentially thousands of dollars because you’ve planned too big. Usually, the combination of registration fees and a venue discount for achieving some of your room-night goals results in a positive money maker, but you need to be prepared for things going wrong.

“You better be ready to take a bath,” advises Mason. “You make commitments and sign contacts, and you’re responsible for it. You’ve got to be ready to lose some money, and you can never go into [organizing a LAN] thinking you’re going to make money. [This past year], with expenses running several thousand dollars [for our three-and-a-half-day convention], we actually made $285 overall.”

Ultimately, knowing what your attendees want to experience should help when selecting a venue. If people are simply looking to play a game as much as is humanly possible in one stretch, a single-day LAN party using an improvised space usually makes the most sense. If people are looking to socialize with each other and catch up with people they only see once a year (or less), then the purpose-built meeting space of a hotel could be the right choice.

Get The Ball Rolling: Covering Startup Costs

With mention of how organizers should be ready to “take a bath” financially, you can probably guess how the vast majority of LAN parties get their seed money: Organizers usually pour in their own money.

“Getting started—that’s the really hard part,” says Mason. “It’s all really out of pocket to get things rolling.”

So what are some typical avenues for initial financing? There are several common ways: plowing in your own money or credit, finding several partners with whom you can pool resources, and requiring the paying attendees to prepay early during the planning stages. All of these require doing some basic math and following a plan to avoid a financial disaster.

Although you shouldn’t count on making money with LAN parties, you should still try to determine if breaking even is even remotely possible. Some “back of the envelope” calculations usually suffice, and using other LAN parties as a guide is also helpful. NETWAR Omaha, for example, has around 200 attendees paying either $25 (if preregistered) or $40 (at the door). If half preregister, then the basic budget you have to work with is $6,500 ($2,500 + $4,000), which seems like a lot until you realize you need to rent a venue that holds 200 people, get broadband connectivity for 200 users, build a LAN that supports 200 computers, and find tables and chairs to seat 200 people.

The Aces High Convention has similar math: About 50 people paying $125 registration comes up to $6,250 for a four-day event at a hotel. Each attendee needs to stay over three nights, but some are locals or shared rooms, so figure 25 room-nights a night for 75 room-nights total. Because a hotel generally includes the entire infrastructure in its ballroom price, you need to calculate how 75 room-nights bring down the cost of the ballroom. Is it low enough that registration fees will cover it? Knowing the number of local attendees, who won’t need a room, vs. out-of-town attendees, who will, can help you determine the amount of the hotel discount you can expect.

If you’re reasonably confident that registration fees will come close to covering costs, then there’s a chance you’ll be able to recoup your initial seed money, which you’ll need for things such as buying the LAN hardware (which is, of course, reusable), paying deposits on venues, prepaying the broadband supplier (if necessary), food or catering you may supply to attendees, and so forth. Even if suppliers don’t need large deposits up front, doing this math should at least ease your mind when you’re signing contracts committing to pay.

Having partners helps dramatically, especially when starting out with a new event. You divide up areas of responsibility (John handles the venue, Mike deals with the LAN, Bill handles the money and credit card processing, Pat takes care of the food, Chris gets the broadband, etc.), and everyone chips in startup monies to divide the risk. As a bonus, you won’t be responsible for every single thing and might actually have a chance to enjoy the LAN party yourself.

Encouraging early registration is a good way to scrape together startup funds, and doing things to ensure you reach the maximum capacity of your venue helps the bottom line overall. A healthy early registration discount is one good way to get registration fees early. (Note NETWAR’s 37% discount for early registrations.) Offering prizes to registrants drawn at random (either among early registrants and/or from anyone who registers) is another way to entice registrations. Sponsors can help with this in a major way, and in other ways, too.

The Benefits Of Sponsors

Sponsors are companies (or, once in a great while, individuals) who agree to give you and your LAN party their products, services, or monies in exchange for something that will increase their own business or brand awareness. Sponsors can help ease some of the financial burden of paying for a LAN party, but usually only indirectly.

“[These days], I just try to get a certain level of prizes [from our sponsors] so our attendees have something to look forward to,” says Kreikemeier, which is a sentiment repeated by everyone we spoke with, and which jives with our personal experiences.

Is it possible to get a direct financial contribution from a sponsor to help out with costs? Well, anything is possible, but such gifts are extremely rare, especially today. “Larger events may request a (sponsorship) fee, says Zak Wood, director of global marketing at Trendnet, which sponsors dozens of LAN parties and gaming conventions every year. “They’ll sell sponsorship levels, ranging from $3,000 to $10,000, and we generally stay away from that.

“Generally, we’re happy to send items for prizes and swag, though we have also had people borrow equipment [for a LAN party], too.”

When asked what he thinks TrendNet gets out of sponsoring LAN parties, Wood says, “That is a very good question. Networking isn’t a field you’d think would want to sponsor a LAN Party. Mainly, we do it to capture the attention of early adopters, and we think LAN party folks are the early adopters we’re looking for.”

Wood might be on to something, as Kreikemeier told us stories of attendees winning items they never knew existed but came away impressed with once they were opened and played with.

Requirements for sponsorship, at least from TrendNet, aren’t insurmountable. “The screening is pretty simple: Anything above 50 [attendees] is likely to get sponsorship,” says Wood. “[LAN parties] with fewer [attendees] have less of a sponsorship chance. Actually, we establish contact with maybe 70% of the events we sponsor.”

Regarding other requirements, Wood says, “We require proof that the [Trendnet] logo is posted on the LAN party’s Web site before stuff gets shipped out. And following the event, photos and pictures are appreciated, both of the event and of prize winners.”

We didn’t ask Wood these questions so that everyone reading this can hit up Trendnet for sponsorship but rather to get a sense of what you and your LAN party can offer a potential sponsor in exchange for some of its products. Namely, if your event is large enough, it can present a good opportunity to expose trendsetting users to new equipment or brands. Getting products to offer as raffle prizes or contest prizes is very possible and can help bring event excitement and attendance levels up. Borrowing a sponsor’s equipment for the purpose of both running the event and demonstrating its abilities and qualities is a distinct possibility. But no matter what their level of involvement may be, sponsors expect you to actively promote the brand and its products to attendees.

Contacting potential sponsors can feel a little like asking someone on a date, but our experience shows that taking a personal risk when contacting sponsors out of the blue yields better results than a relatively riskless email or Web page form. Keeping in mind that the worst that can happen is that a company politely tells you “no thanks,” we suggest the following tips when contacting potential sponsors. First, get your act together: Have your LAN party’s Web site up and running and make sure it works fine and looks good. Second, make a phone call to a potential sponsor and ask to speak with someone in public relations, gamer relations (if it’s a company that sells gaming products), or marketing. Third, politely and clearly identify who you are, what your event is, and what you would like in the form of sponsorship (items to raffle or offer as prizes, items to borrow or demo at your event, or, if you’re feeling lucky, funding). Fourth, explain what benefits a sponsor would enjoy by helping you. And, finally, regardless of their response, thank them for their time, leave your contact info and Web site address, and ask them if you can contact them for a future event. They could very well monitor your event’s Web site after the fact to determine if you’re worthy of sponsorship in the future.

Experience Counts, But It Isn’t Everything

We know this can all seem daunting, so we have one more tip: If you can partner up with someone who has financed, planned, or even just helped with a LAN party before, do it. Misery may love company, but stress loves partnerships.

Still, there have been plenty of successful LAN parties started by inexperienced individuals, and you really can do it, too. Let us know how it goes.

by Warren Ernst