danielray Posted March 25, 2013 Share Posted March 25, 2013 Characterize the income statement correctly, and you'll see that "net" is what's left over after paying the corps. But, recall that the Seven charged DCI with building a $500m war chest, towards which they are about $250,000 to the good. So many corps and boards are focused on salvaging the situation because none of them suggest that the situation is tenable. Everyone is working on a solution that nobody completely likes (likely the best solution), and the Seven have put the activity in a situation where, instead of committing to work together, they've threatened to blow it up. The immediate result is that none of them trust one another enough to sign on to long-term commitments and, instead, are moving year-by-year with no actionable requirements laid down that would represent progress towards a shared goal. You, yourself, admit that there is no metric for success, and that the Seven don't even agree among themselves what a solution might be. Such a nebulous definition of "success" makes it nearly impossible to make progress towards any goal, much less the one that will preserve the activity as one. The Seven had such definitive demands not long ago. What happened to those and why were they replaced with "something bold"? If an organization can't iterate where it's going, it makes no difference what route they take to get there. "Something bold" is an even weaker goal than some here claim the 5-year plan represented. Yet it's OK for the Seven to lay down ridiculous expectations while Dan and the other directors are chastised for being "weak". It seems the only actual goal the Seven have in mind is to be put in charge, something the rest of the directors are not willing to do. If "success" is based on that demand alone, then I agree with you that the Seven will be disappointed, the activity will split, and the Seven will blithely stand by and blame the others for not acceding to their demands. Anyone paying attention can see the set-up and how the Seven intend to play the blame game. Something bold is simply my interpretation of the situation. The 5 year plan was weak man.... be real. It was designed to upset the least amount of people, while really doing nothing. It was also a lot of statements, but no follow on action plan for how to get there. Again, there needs to be a different kind of leadership at this stage or it is more of the same. That is entirely my own opinion, nothing else. There is just a reality here that management is dramatically underperforming on the potential here. How many real sponsors does DCI have? There is loads of money there.... yet sponsorship revenue is pretty much next to nothing. 1 Link to comment Share on other sites More sharing options...
cixelsyd Posted March 25, 2013 Author Share Posted March 25, 2013 If you don't get that $100k is a simply a rounding error on $10M ... we certainly do have a bit of a gap. $100k is not real money (less than what DCI spends on unnecessary printing). Okay, then, since $100k is not real money, how about we cut DCI payouts to each G7 corps by $100k in 2013? Then we will see who thinks $100k is real money. The FIRST purpose of DCI is to remain in business. In order to assue that, they need cash on hand, just in case. Those mentioning being able to hang on to $100k or even $300k as being a success... it is possible that an unplanned change in vendor or shift in market price of essential goods/services could put DCI well in the red when riding the margins that close.If the corps need more money and DCI exists to provide for the corps... DCI needs to go out and make/find more money... while at the same time keeping more in reserve. DCI could be making considerably more money than it currently is. It's like their milking the cow from only one teat. Let's put it like this... Let's say you make $100,000... and at the end of the year, after all your bills are paid, you have only $1,000. If any prices go up, or god forbid you have some sort of unplanned emergency over the next year... you're ####ed. To make your comparison more accurate, say I did make $100,000, and at the end of the year, after all my bills are paid, I have $25,000 left. I am supposed to pay any money I have left over out to my 7 ex-wives, but then a financial advisor suggests I should have a $5,000 reserve fund. The ex-wives are particularly belligerent this year, though, threatening to get me fired if I skimp on my payments to them, so I pay out $24,000 and only put $1,000 in reserve. Link to comment Share on other sites More sharing options...
Slingerland Posted March 25, 2013 Share Posted March 25, 2013 (edited) It's a little interesting to see a few of you commenting on the payouts to the corps as if that was somehow a sign of DCI's largesse. Paying the corps for their work is the primary reason for DCI's existence. End. Of. Statement. If only 24 cents out of every dollar created by the corps' efforts are going back to the corps, it makes me wonder if the G7 weren't correct in believing that another entity might be able to do this more efficiently. If DCI's current Board and staff can't find a way to justify growing the brand, the other option would be to specialize even more, which would allow for a greater focus on fewer activities. For example, DCI could limit themselves to producing one big contest every year (Finals) and producing the video content, and leave the rest of the season's shows up to other organizations. I'd imagine that some regional corps might be able to get together and produce the regionals on their own dime and time, which would remove DCI from doing anything except worrying about publicizing and selling the Finals week events. This would allow them to move some of the marketing expenses out of house, and let the corps who produce the events themselves utilize their larger volunteer pools (DCi doesn't get anywhere near the volunteer support that most of the corps themselves do). Either they need to step up to being able to produce on a bigger scale, or they need to be honest about their limitations and just do a better job of one or two big events. But at present, there doesn't seem to be any movement one way or another, and the current mix of activities doesn't seem to be able to generate nearly as much income for the producers of the product as one would think it should. Edited March 25, 2013 by Slingerland 3 Link to comment Share on other sites More sharing options...
garfield Posted March 25, 2013 Share Posted March 25, 2013 (edited) It's a little interesting to see a few of you commenting on the payouts to the corps as if that was somehow a sign of DCI's largesse. Paying the corps for their work is the primary reason for DCI's existence. End. Of. Statement. If only 24 cents out of every dollar created by the corps' efforts are going back to the corps, it makes me wonder if the G7 weren't correct in believing that another entity might be able to do this more efficiently. How about DCI limit themselves to producing one big contest every year (Finals) and producing the video content, and leave the rest of the season's shows up to other organizations. I'd imagine that some regional corps might be able to get together and produce the regionals on their own dime and time, which would remove DCI from doing anything except worrying about publicizing and selling the Finals week events. This would allow them to move some of the marketing expenses out of house, and let the corps who produce the events themselves utilize their larger volunteer pools (DCi doesn't get anywhere near the volunteer support that most of the corps themselves do). If DCI's current Board and staff can't find a way to justify growing the brand, the other option would be to specialize even more, which would allow for a greater focus on fewer activities. But either they need to step up to being able to produce on a bigger scale, or they need to be honest about their limitations and just do a better job of one or two big events. But the current mix of activities doesn't seem to be able to generate nearly as much income for the producers of the product as one would think it should. Over $2mm paid out to corps is certainly not largesse. But net of that, and the couple hundred thousand it left in reserve leaves them a "net" zero, and a few of you here suggest that the "net zero" part is a sign of failure. You conveniently forget about the payout to corps in that statement. I included a metric of "efficiency" for every corps based on management and general expenses as a percentage of gross expenditures. There were only a couple of corps that had a higher efficiency than DCI (not coincidentally, they were mostly non-G7 corps), but you intimate that "another entity" (come on, you mean the Seven corps themselves, right?) would do better. It's a pretty well-known fact that the average musical performance NPO produces only about 30% of its revenue from the gate. The rest comes from public support. DCI is not far off that mark. DCI does a pretty good job of running a 105 show tour. Your suggestion is to let the corps run the tour, but not because they are "better" at it, or more efficient. Your suggestion is built around the thesis that "local", non-corps-run shows steal money from the corps pockets, and they want those profits (local school music programs be-darned. You can't claim that "another entity" (the Seven) are more efficient at running a tour and generating profits when their own balance sheets prove the contention wrong. Just look at the Crown or Phantom or Cadets income statements and explain how your contention can possibly be true. Edited March 25, 2013 by garfield Link to comment Share on other sites More sharing options...
garfield Posted March 25, 2013 Share Posted March 25, 2013 This would allow them to move some of the marketing expenses out of house, and let the corps who produce the events themselves utilize their larger volunteer pools (DCi doesn't get anywhere near the volunteer support that most of the corps themselves do). I thought the premise is that corporate finance and underwriting is the future of the activity. Now you're talking about a solution built around a larger volunteer base? Jeesh, I wish you'd pick a solution that you like... It's not hard to imagine that the Seven are not in unison on a solution when there are so many potential solutions being bantered around (corporate finance, volunteers, "efficiency", the Seven running the whole tour except finals... If DCI picks just one of these, would that be "bold" enough to the Seven? If DCI focused on doubling their volunteer base, would that be bold enough? Jeesh, I wish they'd pick just one solution they like... 4 Link to comment Share on other sites More sharing options...
Slingerland Posted March 25, 2013 Share Posted March 25, 2013 (edited) There were only a couple of corps that had a higher efficiency than DCI (not coincidentally, they were mostly non-G7 corps), but you intimate that "another entity" (come on, you mean the Seven corps themselves, right?) would do better. Actually no, I'm not suggesting that the G7 should do it. However I do think a case could be made that the Southeastern regional might be better produced by Spirit & Crown plus whoever else, the Eastern show by a group of Eastern corps, etc, etc, etc. If you want to look at this in terms we might be familiar with from our political discourse, it would allow the regional associations to be the laboratories of new ideas and approaches. Let four or five groups/associations try different approaches to how they sell the events, and see what comes out of it. I guess my overall sense is that DCI's been hit by a major case of mission creep over the years, and as usually happens, new projects got put on the the boards without necessarily creating the funding mechanism to underwrite those new projects in a way that would make them profitable. Perhaps if they had to go back to just focusing on the one big event, and doing a spectacular job of producing that, they could increase their overall financial impact by being able to cut back on a lot of other expenses that are duplicating efforts from the corps themselves. Devolve the financial and marketing responsibilities of the regional shows to regional associations made up of the corps themselves, and focus on the Big Ticket event, and they might be able to a good enough job there that Finals once again becomes a big thing, both from a publicity and from a financial standpoint. But right now, it's neither. Edited March 25, 2013 by Slingerland 2 Link to comment Share on other sites More sharing options...
Slingerland Posted March 25, 2013 Share Posted March 25, 2013 (edited) It's a pretty well-known fact that the average musical performance NPO produces only about 30% of its revenue from the gate. The rest comes from public support. DCI is not far off that mark. ???? DCI makes almost 100% of their revenues from the gate. They make almost nothing from charitable support. If they HAD a base of support besides ticket sales, none of this conversation would be happening. No major sponsors, no major donors. Selling the corps' performances are about the only source of revenue DCI has. And for providing that sellable product, the corps get back 24% of what their work brought in. That doesn't strike me as a particularly great deal for the corps. Edited March 25, 2013 by Slingerland 2 Link to comment Share on other sites More sharing options...
cixelsyd Posted March 25, 2013 Author Share Posted March 25, 2013 Actually no, I'm not suggesting that the G7 should do it. However I do think a case could be made that the Southeastern regional might be better produced by Spirit & Crown plus whoever else, the Eastern show by a group of Eastern corps, etc, etc, etc. If you want to look at this in terms we might be familiar with from our political discourse, it would allow the regional associations to be the laboratories of new ideas and approaches. Let four or five groups/associations try different approaches to how they sell the events, and see what comes out of it. I guess my overall sense is that DCI's been hit by a major case of mission creep over the years, and as usually happens, new projects got put on the the boards without necessarily creating the funding mechanism to underwrite those new projects in a way that would make them profitable. They are profitable, to the tune of the $2.5 million per year they give back to the corps. 1 Link to comment Share on other sites More sharing options...
Slingerland Posted March 25, 2013 Share Posted March 25, 2013 (edited) I thought the premise is that corporate finance and underwriting is the future of the activity. Now you're talking about a solution built around a larger volunteer base? Jeesh, I wish you'd pick a solution that you like... It's not hard to imagine that the Seven are not in unison on a solution when there are so many potential solutions being bantered around (corporate finance, volunteers, "efficiency", the Seven running the whole tour except finals... If DCI picks just one of these, would that be "bold" enough to the Seven? If DCI focused on doubling their volunteer base, would that be bold enough? Jeesh, I wish they'd pick just one solution they like... I stated a fact - that the corps' themselves have a much larger base of volunteers than DCI does. If you'd like to refute it, go ahead. Purely from a Board of Director levels, if there was an average of nine Board members for every World Class corps, that's 200+ adults with business experience or other related skills who are already involved in operations for drum corps. Each of those corps runs shows now, so they have people who know how to market and sell tickets. The skills for selling a regional show are already in the hands of the corps themselves, so an argument could be made that DCI is simply duplicating those efforts, but with paid staff members in their headquarters. DCI's either got to focus on doing a better job with a smaller number of projects, or get big enough to do a better job with the workload they've got. But the current situation isn't tenable. There simply isn't enough money coming in to make it work. Edited March 25, 2013 by Slingerland 3 Link to comment Share on other sites More sharing options...
Slingerland Posted March 25, 2013 Share Posted March 25, 2013 They are profitable, to the tune of the $2.5 million per year they give back to the corps. They don't "give back" anything to the corps anymore than your employer "gives you back" money when they pay you a sales commission you earned. 3 Link to comment Share on other sites More sharing options...
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