For-Profit Drum Corps

[Jeff Ream]

it probably makes taxes a lot trickier for an organization of that size to have that many paid employees

[vferrera]

Just to clarify, by "for-profit" I'm not talking strictly about legal status but about a business model in which expenses are covered by performance-related activities (ticket sales, merchandise, etc).

Expenses could include performer salaries.

Did Blast! lose money? I know their B'way run was rather brief. Less than a year. They never re-opened after 9/11. But I believe their total box office was about 8M.

I think DCI's revenues are about 8M/yr.

[Stu]

University athletes have the opportunity to continue their trade as paid professionals well into their mid-life through Professional Baseball, Professional Football, Professional Basketball, ad infinitum. The draft for rookies combined with a certain length of time before players are eligible for free agency and salary caps all keep young prima donnas in check; and product endorsement combined with souvenir marketing and ticket sales pay their salaries. The ultimate question here is this: Can the overall DCI audience and product support actually financially uphold World Class Drum Corps as becoming a professional outlet for marching musicians? By the way, major Symphony gigs like the CSO and BSO are full time paid gigs for the musicians, so paying marching performers in corps is not that far fetched.

[azul]

When there's an audience to support it--in other words, when pigs fly.

that happened this summer if we all remember

[mobrien]

Just to clarify, by "for-profit" I'm not talking strictly about legal status but about a business model in which expenses are covered by performance-related activities (ticket sales, merchandise, etc).

One of the things that would change is that you would lose volunteers. People understand the point of volunteering their time to help a charity, but most aren't interested in volunteering their time and efforts if they know that another group of people at the back end are making a profit off their efforts. So your payroll costs go up automatically, since you're now paying for kitchen crew, drivers, people to work the souvie wagon, etc.

Most moms and dads won't let their kids perform for free for a for-profit company, much less let their kids pay for the privilege. If you're paying the performers even a $300 per week salary, you're talking about $50,000 per week in payroll for the performers. Over a 12 week move-in and tour period, that's another $600,000.

Let's say that adds $1,000,000 to your annual expenses. Assuming that the change in status doesn't ALSO change the level of sponsor support they get, that puts a corps like Cavaliers at a $2.6 to $2.8 million annual budget. If they did 40 shows per year, they'd need to be grossing $65,000 per performance in order to break even, much less show a profit. If a show sponsor has 7 corps at their contest, with each making $65k, the sponsor's gross for the gate will need to be $455,000 in order for HIM to break even just on the performance fees, not even taking into account the costs of marketing, venue rental, etc, etc. Can someone sell 5,000 seats at $120 each for a non-world championship event? Maybe, but it's not likely.

I don't see it as a viable option. Blast! likely made some money in the long run, but if the producer of the show (Bill Cook) was having to rely on outside funds rather than his own money to produce the show, it's less likely that he would have been able to round up additional funds necessary to keep the show alive long enough to turn a profit.

Edited May 11, 2010 by mobrien

[Dave]

Just to clarify, by "for-profit" I'm not talking strictly about legal status but about a business model in which expenses are covered by performance-related activities (ticket sales, merchandise, etc).

Expenses could include performer salaries.

Did Blast! lose money? I know their B'way run was rather brief. Less than a year. They never re-opened after 9/11. But I believe their total box office was about 8M.

I think DCI's revenues are about 8M/yr.

I'm still confused as to this discussion. To use the example in this discussion, symphony orchestras pay all their performers, ranging from smaller ones that pay anywhere from $12,000 to $30,000 depending on position, to the best orchestras like NY and LA that pay their principal performers around $120,000 per season, so being non-profit doesn't preclude a drum corps paying performers--it would just mean that they stop being groups that exist to educate youth, and become professional groups. Even the most profitable (because remember, non-profits can make a profit--they just don't have to turn around and give it to a group of investors) and well-paying orchestras still run fundraisers and have donors, even though they make money on their performances.

So I guess my ultimate question is still, "What advantage would designating a corps 'for-profit' bestow on them that they don't have as non-profits?"

[Walter]

Can the activity survive as a non-profit venture funded mainly by performers, parents and alumni?

FOR PROFIT drum corps, tickets prices are high enough now. What will the ticket prices be if it goes to FOR PROFIT ??

Was Blast! an interesting experiment or a harbinger of things to come?

Blast! still is, a very good venue for the age out who still wants to perform. Do they get paid ? Why not !!

This may be a thing of the future if DCI screws up some how and the day of the field show dies.[/font]

Does a night of drum corps not provide the same entertainment value as going to the movies, a concert, or a sporting event?

I think if you have the right corps and a big enough show yes it does.

When does it become the norm for drum corps shows to play in major venues instead of h.s. stadiums?

Don't count your chickens or hold your breath.

When do corps performances become year-round?

This will never happen as long as the main performers, the kids, still have to go to school and people still have to go to work !!

[Dave]

FOR PROFIT drum corps, tickets prices are high enough now. What will the ticket prices be if it goes to FOR PROFIT ??

Ticket prices have nothing to do with for profit versus not for profit. Once again: NON-PROFIT DOES NOT MEAN "DOESN'T MAKE A PROFIT." A good non-profit DOES make a profit, it just means that the profits go back into the business rather than going to benefit a set of investors.

[jpaul]

With the current formula (by current I mean the past 25 or so years) of drum corps, never. Not enough local members to sustain a year-round performing group. Heck, Cavaliers had an Open class drum line in WGI with most (maybe all) members NOT in their corps. Membership comes from all over the country (world for some groups), and with that member base there's no way to have year-round performance dates.

Green Thunder ≠ The Cavaliers Winter Drumline. Green Thunder was started as a training program for Chicago area percussionists with the hope that some would eventually choose to join the drum corps. That's exactly what's happening.

[Stu]

Ticket prices have nothing to do with for profit versus not for profit. Once again: NON-PROFIT DOES NOT MEAN "DOESN'T MAKE A PROFIT." A good non-profit DOES make a profit, it just means that the profits go back into the business rather than going to benefit a set of investors.

While that is true, non-profits have to be very careful where they garner their revenue. For example, they cannot develop an outside business in which employees are paid to generate corporate income; the IRS views that as non-related business income. So, non-profits are relegated to raising funds strictly through patron donations, through thrift stores, through membership dues, through ticket and souvenir sales, or where legal through Bingo. However, a for-profit company can diversify by owning various outside franchises, like Fast Food Restaurants, to generate great amounts of revenue from outside of the activities it supports. Jerry Jones, owner of the Dallas Cowboys, also owns a multitude of shopping complexes in which he funnels revenue into the Cowboys. That process is illegal in the world of non-profit.