Running a Sports Facility – The Small Operator Guide (Part 2)

Pricing, Memberships, Staffing, and the Space Itself

In Part 1 we covered the five revenue drivers — rentals, leagues, instruction, events, and memberships — and the one KPI that matters more than monthly totals: revenue per usable hour per surface.

This post is about the four decisions that determine whether those drivers actually make money:

1. How to price each revenue stream
2. How to run memberships next to your a la carte business without cannibalizing it
3. Full-time vs. 1099 — how to staff coaches and desk without getting burned
4. How to choose a space and negotiate a lease

Part 1 was strategy. This one is arithmetic and paperwork. Less fun, but this is where small operators win or lose.

1️⃣ How to Price a Sports Facility – Start With the Surface-Hour

Most operators price by looking at the facility down the road. That tells you what the market will bear. It does not tell you whether you can survive at that number.

Start with your floor instead.

Take your all-in annual occupancy cost — base rent, NNN, utilities, insurance — and divide it by the surface-hours you can realistically sell.

A Worked Example

Say you're in 20,000 sq ft with one full turf field that splits into two halves.

• Base rent at $10.30/sq ft/yr — roughly the US national average industrial asking rent as of Q2 2026, per Cushman & Wakefield — plus about $2.50/sq ft in NNN = $12.80/sq ft all-in. (If anything this understates it. The national average includes a lot of new big-box, and the right-sized building for you sits in a tighter, pricier segment — more on that in section 4.)
• 20,000 × $12.80 = $256,000/year in occupancy cost
• You're open 90 hours a week: 90 × 52 = 4,680 surface-hours a year on the full field

If you sold every single hour, rent alone costs you $55/hour. You will not sell every hour.

At a 35% sell-through you have 1,638 sellable hours, and rent alone is $156/hour. At 50%, it's $109/hour. That is before you pay a single coach, a single front-desk shift, or yourself.

Now go back to the $130/hour field rate from Part 1. On this building, $130/hour covers rent only if you're selling about 42% of your hours. Below that, straight rentals don't clear the floor no matter how good your rate card looks.

That's the whole argument for utilization and for layering programming on top. The rental rate isn't the lever. The sell-through is.

(Note: national averages are a starting point, not your number. Spreads between metros are enormous — CommercialEdge's in-place rent series, which runs below asking, still ranges from about $4.50/sq ft in Memphis to nearly $18 in Orange County. Run this with a real quote on a real building.)

Pro Tip

Price prime and off-peak differently, and be aggressive about the gap. Pulling published turf rate cards from seven facilities across the Northeast, Midwest, mid-Atlantic, California, and Ontario, two patterns show up repeatedly:

• Off-peak rates run 30–45% below prime
• Half-field prices at 55–60% of full field — not 50%. Splitting a surface costs you flexibility, and operators charge for it.

Full-field indoor turf in dense metros (NYC, North Jersey) publishes at $350–$465/hr prime. Secondary markets publish $125–$250/hr. Courts cluster tighter — $100–$125/hr for a full basketball or volleyball court in most markets. Batting cages run $40–$50/hr, plus about $5 for the machine.

Find your comparable market, then price to your floor, not to the guy down the street.

Pricing Instruction and Programming

Here's the part nobody tells you: the lesson doesn't make as much money as the sticker price suggests.

A 2026 analysis of roughly 888,000 bookings across 327 facility businesses — published by one of the scheduling platforms in this space, so read it as vendor data from a self-selected customer base — found that the median trainer payout is 50% of the lesson price, with most facilities landing between 39% and 67%. Which means the house's net on a private lesson often lands close to what you'd have made just renting that space.

Run it yourself, using the $130/hr rental as the comparison:

• 12-player clinic at $40/athlete = $480 gross for the hour. Pay the coach a 50% split → $240 net. That's 1.8x the rental.
• Same clinic, coach paid a flat $60/hr as a W-2 employee → $420 net. That's 3.2x.

The difference between those two outcomes isn't the price you charge. It's how you structure the coach. More on that in section 3.

Where to Set Your Rates

Market ranges from published facility rate cards and pricing surveys:

• 1:1 private lessons: $55–$85/hr in mid-markets, $85–$160/hr in major metros. Soccer clusters at $60–$80. Baseball 30-minute lessons run $40–$75.
• Semi-private (2 athletes): $35–$55 per athlete mid-market
• Small group (3–6): $20–$45 per athlete
• Clinics (7–12): $15–$30 per athlete mid-market, $25–$50 metro
• Camps: roughly $225–$400/week full day, $125–$200/week half day
• Rec league registration: $60–$170 per player per season, with member/non-member spreads of 20–50%

The Package Discount That Actually Works

The discount ladder on most rate cards lands in the same place: 5-packs around 10% off, 10-packs around 15–17% off. Precision Baseball, for example, sells a 30-minute private at $40, a 5-pack at $36/lesson, and a 10-pack at $33.50/lesson — about 16% off at the top of the ladder.

That's the right shape. You're buying scheduling certainty and cash up front, and paying roughly 16% for it. Don't go much past 20%. At that point you're just discounting.

The Mistake

Pricing every hour the same. Your Tuesday 7pm field hour and your Tuesday 1pm field hour are completely different products with completely different scarcity. If you charge the same for both, you're leaving money on prime and leaving off-peak empty.

Seasonality compounds this. That same booking dataset puts February prime-hour occupancy at 33% versus July at 8% — a 4x swing. If your rate card doesn't move with your calendar, you're relying on February to carry July and never pricing either one correctly.

2️⃣ Memberships and A La Carte – Making Them Coexist

Part 1 called memberships the most misunderstood revenue stream in small facilities. Here's the specific way they go wrong: operators build a membership that discounts the inventory they were already selling at full price.

If your members get 20% off prime-hour rentals, and prime hours were your only sold-out inventory, congratulations — you just took a 20% pay cut on your best product and called it growth.

The Rule: Fence the Membership

A membership should sell things a la carte customers can't buy at any price, or things you couldn't sell anyway. Four fences that work:

• Time fence — member rates apply to off-peak only. Your 1pm Tuesday hour is worth more discounted than empty.
• Access fence — open play, member-only sessions, drop-in hours. Products that literally don't exist for non-members.
• Priority fence — members book 14 days out, public books 7. Costs you nothing and is worth a lot to a parent trying to lock a Saturday.
• Bundle fence — X clinics per month included. You're pre-selling programming capacity, not discounting space.

Discount-only memberships train your best customers to pay you less. Access-and-priority memberships get you paid for scarcity.

The Math You Need to Run Before You Launch

Part 1's example: 100 members at $75/month = $7,500/month. True — but only if you hold the 100. And you won't, so the only question is how fast you lose them.

Two benchmarks, and the gap between them is the whole lesson:

• The Health & Fitness Association's 2025 benchmarking report (2024 data, median across 175 companies and 17,000+ facilities) puts health club member retention at 66.4% a year — about 3.4% monthly churn, roughly a 30-month average tenure. That's the optimistic case, and health clubs skew toward annual contracts.
• Sports facility membership data — again from a scheduling vendor's own customer base, so weigh it accordingly — tells a harsher story for month-to-month plans specifically: roughly 35% still active at one year, with a median tenure of about 87 days among members who leave. That's closer to 8% monthly churn and a 12-month average tenure. Recurring-dues and unlimited-access plans hold up better, around 42–45% at one year.

Plan for the second number. A month-to-month membership at a youth sports facility is not a January gym contract. Which means:

• Depending on your plan mix, you lose 6 to 8 of those 100 members a month, not 3
• You need to sign 6–8 new members a month just to stand still — that's a real, ongoing marketing job, not a launch campaign
• A $75/month member is worth roughly $900 in lifetime revenue, not $2,200

That last number is the one that matters, and here's the trap: lifetime revenue is not your acquisition budget. Members consume staffed hours and facility time. If your contribution margin is 50%, your actual ceiling on customer acquisition cost is around $450 — and lower if you want to be paid back inside a year. Operators who budget against the gross number torch their marketing spend.

The flip side: churn this front-loaded is also the most fixable kind.

The Cheapest Retention Lever Nobody Uses

A meaningful share of membership cancellations aren't cancellations at all. They're expired and declined cards. The member never decided to leave; the payment just stopped and nobody followed up.

Automatic card updating, retry logic, and a dunning sequence that emails a member before you cancel them will save more memberships than any referral program you can design. Make sure whatever you run memberships on does this — Fieldspace does, and if your system doesn't, that's a real and very fixable leak.

And that 87-day median tenure points straight at the other lever: onboarding. In the same dataset, better than half of the cancellations that weren't just a program finishing happen in the first 90 days. The first booked session, the first clinic they actually show up to, the first time a coach knows your kid's name — that's where retention is won or lost, and almost nobody works it deliberately.

Why Memberships Matter More Than the Revenue

The strongest argument for memberships isn't the $7,500. It's what they do to your volatility.

In that same booking dataset, facilities with 0–3% of revenue from memberships saw roughly 48% month-to-month revenue variation (measured across 140 facilities). Facilities where memberships made up 51%+ saw about 30% — roughly a third less swing. Rentals move violently with the season. Memberships barely move at all.

That stability is what lets you sign a lease, hire a full-time person, and sleep.

3️⃣ Full-Time vs. 1099 – Staffing Without Getting Burned

Quick disclaimer: I'm not a lawyer or an accountant. This is a summary of how the rules work, not legal advice. Before you set up your coaching staff, spend the money on an employment attorney in your state. It's the cheapest insurance you will ever buy.

Almost every small facility starts the same way: pay the coaches on a 1099, split the lesson revenue, keep it simple.

And a lot of them are wrong about whether that's legal.

The Federal Rules Are in Flux — and It Matters Less Than You Think

Where things stand as of August 2026:

• The DOL's 2024 independent contractor rule remains on the books, and courts may still look to it
• DOL investigators were told in May 2025 to stop applying it and use the older economic-reality factors instead
• In February 2026 the DOL proposed rescinding the 2024 rule and replacing it with a revised economic-reality test that elevates two of five factors — control and opportunity for profit or loss — to core status. That rule is still proposed, not final

So the federal direction of travel is more contractor-friendly. Great. It doesn't help you much, because:

1. The IRS test hasn't changed at all
2. State law hasn't changed — and state law is where facilities actually get hurt
3. Private FLSA plaintiffs and the courts apply their own circuit's economic-reality precedent regardless of what a DOL regulation says
4. The realistic risk to a small operator isn't a DOL audit anyway. It's a former coach filing for unemployment, or getting injured

The Test That Actually Applies to You

The IRS looks at three buckets: behavioral control, financial control, and the type of relationship. Applied to a coach at your facility, ask yourself honestly:

• Do you set the schedule and assign the coach to time slots?
• Do you set the price the customer pays?
• Does the customer pay you, and you pay the coach a cut?
• Do you provide the turf, the balls, the machines, the booking software?
• Does the coach wear your logo and appear on your website as "our staff"?
• Is the relationship open-ended rather than a defined engagement?

If you answered yes to most of those, you probably have an employee. It doesn't matter what the contract says or that you filed a 1099.

And inside that third bucket sits a question that's brutal for this industry: is the service a key activity of the business? Coaching is the business of a coaching facility. That one is hard to argue around.

State Law Is Where It Gets Expensive

More than 25 states use some version of an ABC test, at minimum for unemployment insurance. Under ABC, the worker is an employee unless you can prove all three prongs — including that the work is outside the usual course of your business. A coach at a coaching facility fails that prong. Full stop.

Three that matter right now:

• California — ABC test under AB5, and there is currently no exemption for coaches at commercial facilities. Worth knowing: SB 527, which failed in February 2026, wouldn't have helped you anyway — it only covered coaches paid by private schools and local education agencies, never commercial training facilities.
• New Jersey — the state DOL's final worker classification regulations take effect October 1, 2026. They make clear that a 1099, an IC agreement, a business registration, or an insurance policy are not individually sufficient to establish an independent business. NJDOL will look at whether the coach actually runs a viable business serving other customers.
• Massachusetts — the strictest in the country. Prong B has no alternative escape route.

What Misclassification Actually Costs

• Federal payroll tax: under IRC §3509, you owe 10.68% of wages if you filed 1099s, 13.71% if you didn't — and if the IRS finds intentional disregard, that relief disappears entirely and you owe the full employer and employee share plus penalties
• California: for willful misclassification, Labor Code §226.8 carries $5,000–$15,000 per violation, $10,000–$25,000 for a pattern or practice, plus a mandatory notice posted on your own website for a year stating you committed a serious violation. For a youth sports business, that's worse than the money. (Good-faith mistakes don't trigger §226.8 — but they still trigger the back taxes above.)
• Workers' comp: this is the one that ends businesses. A "contractor" coach tears an ACL demoing a drill and files a claim. If the state decides they were an employee, you were uninsured. In New York, failure to secure coverage is a misdemeanor at $1,000–$5,000 with five or fewer employees and a Class E felony at $5,000–$50,000 above that.

DOL has enforced this against facilities exactly like yours. In September 2021 it cited three New Hampshire ice rinks for a combined $42,921 in penalties and $13,125 in back wages — two of the three had misclassified minors as independent contractors, on top of child labor and recordkeeping violations. The classic small-operator failure: treating the 15-year-old skate guards as 1099s.

The Two Clean Structures

There are really only two defensible models. Pick one and commit.

Model A — W-2 employee coach. You set the schedule, you set the price, you collect the money, you pay an hourly wage. You control the customer relationship and the brand experience. You pay payroll tax and workers' comp, and your effective cost per coaching hour goes up roughly 15–25% depending on your state's comp rates for athletic instruction. In exchange, you own the client, you own the quality, and you sleep at night.

Model B — true renter-coach. The coach rents space from you at your published rate, sets their own price, bills their own clients, carries their own liability insurance, and works at other facilities too. You are a landlord for that hour. This flips the control and independent-business prongs and gives you a real shot at the third.

The trap is the middle. Facility sets the price, facility collects the money, facility owns the client, coach takes 60% on a 1099. That's the most common arrangement in this industry, and it's an employee wearing a contractor's paperwork.

Most operators won't accept Model B, because giving up pricing and the client relationship is giving up the business. Which is the honest argument for just running W-2.

Pro Tip

If you're already worried about your setup, look at the IRS Voluntary Classification Settlement Program. File Form 8952 at least 120 days before you reclassify and you pay roughly 10% of one year's employment tax at reduced rates — no interest, no penalties, and no audit of prior years.

Two catches. You're ineligible once an audit opens, so this only works if you move first. And you must have filed all required 1099s for those workers for the past three years — if you were paying coaches cash, VCSP isn't available to you.

Staffing the Rest of the Building

Coaches are the hard part. The rest is simpler than people make it:

• One full-time operations person — opens, closes, handles the phone, chases the schedule, manages the coaches. This is your first real hire and it should come before your second coach.
• Part-time hourly desk for prime blocks. Nights and weekends only, because that's when you're busy.
• Yourself, for as long as you can stand it.

For context on the coaching market: BLS puts median annual pay for coaches and scouts at $45,920 (2024 data), with projected employment growth of 6% through 2034. Note that BLS doesn't publish an hourly figure for the occupation, because most coaches don't work year-round full-time — which is exactly why this is a hard problem.

The best lever on desk hours isn't scheduling — it's self-serve booking. Every rental a customer books themselves is a phone call you don't take. That's the single biggest reason to run software instead of a spreadsheet and a phone.

4️⃣ Choosing a Space and Negotiating a Lease

Your lease is the largest fixed commitment you'll make, and you make it before you have a single customer. Get it wrong and no amount of good programming saves you.

The Clear Height Trap

Clear height is measured to the lowest immovable obstruction — sprinkler heads, joists, ductwork, light fixtures. It is not ridge height, and listing sheets very often quote the latter.

What you actually need:

SportMinimum clear heightBatting cages12 ft minimum; 20 ft+ preferred for real ball flightVolleyball23 ftBasketball25 ftIndoor soccer / turf25–30 ftFootball35 ft+

Now match that against what's on the market. Light industrial and flex space runs 18–24 ft clear — exactly the band that fails basketball and barely clears volleyball. It's also the cheapest space and the space a first-time operator can afford.

What you want is 1980s–2000s mid-bay warehouse at 24–28 ft. Be warned, though: that's the tightest part of the industrial market right now, not the loosest. One Q2 2026 read puts vacancy in buildings under 50,000 sq ft near 4%, versus about 7.5% for everything larger. CBRE tracks a similar "shallow bay" category — under 50,000 sq ft with 14–28 ft clear, almost exactly the building you're hunting — and has consistently found it running well below the overall industrial vacancy rate, with very little new construction adding to it.

In other words, the soft vacancy numbers in the headlines live in new big-box distribution — buildings too tall, too big, and too expensive to be any use to you. Expect less leverage on the right-sized building than the national numbers suggest.

The Parking Math Nobody Sees Coming

This is the single most common deal-killer on a warehouse conversion.

Houston's parking code is a good illustration, and most municipalities look similar in shape:

• Bulk warehouse: 1 space per 7,000 sq ft of warehouse, plus 2.5 per 1,000 sq ft of office
• Sports club or health spa: 5 spaces per 1,000 sq ft of gross floor area

Run it on a 20,000 sq ft building with a typical 10% office finish. As a warehouse, it was built to need about 8 parking spaces. As a sports facility, the code wants 100.

Pull the actual parking table from your municipal code before you sign anything. And ask whether shared or off-site parking agreements are permitted — youth sports peaks nights and weekends, exactly when your 9-to-5 industrial neighbors sit empty. That's often the fix.

Zoning and Occupancy — Ask Before the LOI

Indoor recreation is frequently not permitted by right in industrial zones. It commonly requires a conditional use permit, which means public notice, neighbor notification, and a planning commission hearing — budget 2–4 months for that alone.

This is changing, slowly. The town of Matthews, NC voted in July 2026 to allow indoor racket sports by right in its light industrial district, dropping the CUP requirement. But you can't assume it.

Then there's the building code. You're almost always converting from Group S-1 (storage) to Group A-3 (assembly), and a change of occupancy triggers a full code review: exit count and egress width, emergency lighting, fire alarm, and a much higher plumbing fixture count than a warehouse ever needed. On sprinklers, don't think of the thresholds as triggers you might avoid — A-3 requires them once fire area exceeds 12,000 sq ft or occupant load hits 300, and any real turf or court facility clears both automatically. If you add fixed spectator seating you may land in A-4, which brings its own fixed-seating egress requirements and higher fixture counts.

Call the planning department before you sign an LOI. Ask specifically whether your use is permitted by right, by CUP, or not at all — and get the answer in writing.

What the Market Looks Like Right Now

As of mid-2026:

• National average industrial asking rent: about $10.32/sq ft/yr NNN, with vacancy at 6.9% (Cushman & Wakefield, Q2 2026)
• NNN adds roughly $1.50–$4.00/sq ft on top of base rent
• Asking rent growth reaccelerated to +2.9% year over year, up from 2.1% the prior quarter
• Vacancy fell 10 basis points in Q2 and is expected to tighten further in the back half of the year as demand outpaces new supply
• Leasing volume hit its strongest pace since mid-2022

Translation: the tenant-favorable window is closing. If you're shopping, you have more leverage today than you're likely to have in 2028 — but less than you would have had a year ago. Don't plan around a soft market that's already turning.

(You'll see different vacancy numbers depending on who you read — CommercialEdge puts it closer to 9.1%. Different providers track different property universes and define vacancy differently; the 2-point spread is methodology, not disagreement about the market. Pick one series and stay in it.)

The Comparison Mistake

Do not compare a $10.00 NNN quote to a $13.00 gross quote and conclude the first is cheaper. Add the NNN load and they're roughly the same deal. Always get the estimated NNN per square foot in writing before you compare anything.

And be aware: a sports facility drives far more water, HVAC, and parking lot wear than the warehouse tenant whose CAM history you're being shown. Historical CAM is a floor, not a forecast.

The Clauses That Matter Most

• Use clause — draft it broadly. "Indoor sports and recreation facility" beats "indoor soccer training." If you want to add pickleball, birthday parties, a pro shop, or a café in year three, a narrow use clause blocks you and hands the landlord leverage.
• Zoning and permit contingency. Make the lease contingent on obtaining zoning approval, permits, and a certificate of occupancy for your use — with a walk-away right and your deposit back. For a warehouse conversion this is the single most important contingency in the document.
• Restoration obligation. The most-missed clause for sports tenants. If the lease requires you to rip out turf, courts, netting, and lighting and restore to warehouse shell at your cost, a successful seven-year run can end with a six-figure exit bill. Negotiate it out, cap it, or get written landlord consent that improvements may remain.
• TI allowance scales with term. Expect very little on a 3-year deal and meaningful landlord capital on a 7–10 year commitment. Get contractor bids before you negotiate, so you're arguing over a real number instead of a guess.
• Free rent should cover your build-out. Align abatement with your construction window so you're not paying rent on a job site. Note that abatement usually applies to base rent only — you still owe NNN. Confirm it in writing.
• CAM cap. Negotiate a 3–5% annual cap on controllable expenses and demand audit rights. Landlords won't cap taxes and insurance, and that's fair.
• Escalations. Push for a fixed 3–4% annual bump rather than CPI indexing. If the landlord insists on CPI, cap it and make it non-cumulative so a skipped year doesn't compound forward.
• Personal guarantee. A PG doesn't pierce your LLC — it's a separate personal contract that sits alongside it, with the same practical result: your house and personal accounts become collectible. It's negotiable. Ask for a dollar cap (6–12 months' rent), a time cap, a burn-off that steps down after 24 clean payments, or a Good Guy Clause that releases you from future rent on a responsible surrender. Also worth knowing: deposits and guarantees are interchangeable forms of security. Offering three months up front can sometimes eliminate the guarantee entirely.
• Renewal at a fixed or capped rate, never "fair market value." You'll have spent real money improving that space. An FMV renewal lets the landlord price your own improvements back to you.

Two Physical Items to Verify

• Power. A warehouse baseline of 400–600 amps at 480V may not cover sports lighting, HVAC for an occupied assembly space, and a café. Service upgrades are expensive and slow — quotes vary enormously, but expect months, not weeks, once utility engineering and permitting are included. Find out before you sign, not after.
• Column spacing. You want a genuinely clear playing surface, and about 70 feet column-free per batting cage lane. Columns in the middle of a field are not a design feature.

Putting It Together

The four decisions in this post compound on each other:

• The lease sets your occupancy cost, which sets your pricing floor
• Your staffing model determines whether instruction is a 1.8x on a rental hour or a 3.2x
• Memberships cut your revenue volatility by roughly a third, which is what makes the lease survivable
• And pricing by surface-hour is the only way to see whether any of it is working

Which brings us back to the metric from Part 1: revenue per usable hour per surface. Every one of these decisions moves that number. Track it weekly, by surface and by time block, and the answers to most other operating questions get a lot more obvious.

In Part 3

We'll cover the other half of the equation from Part 1 — marketing. How to actually get people through the door:

• Local SEO and getting found by parents searching "indoor soccer near me"
• Building coach and club relationships as an acquisition channel
• Turning birthday parties into a customer list
• What to do with your off-peak hours
• Referral and retention loops that don't cost anything

Fieldspace helps sports facilities manage rentals, memberships, leagues, and instruction in one place — including scheduling for basketball, baseball and batting cages, tennis, and more.