camel lips

YEA suspends operations of Cadets 2 and Lays off 9 Employees

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I didn't read the announcement until just now and here are a couple of thoughts:

Nowhere, in any way or any were, is there a box checked, a comment made, or a suggestion given that this $600m deficit is NOT made up entirely, or nearly entirely, of the overhanging potential liability of having to pay GH.  There is at least one sentence that could, possibly indicate that it IS the same $600m:

"What is known now is that on top of the financial shortfall that was inherited, and with the increased expenses incurred dealing with the previous leadership’s actions including legal fees, training fees, reductions in sponsorship and USBands participation, the organization now finds itself with an approximate $600,000 deficit."

If they were being careful with their words, and I'd bet they're insisting that their financial people are being very, very careful, and "deficit" is an operating income item that has not been converted to debt.  A potential liability would necessarily be addressed on the current financials, if even in the Notes to the financials according to FASB accounting standards.

It would, of course, also be perfectly appropriate to make 2019 expense projections with that deficit (or servicing its debt if need be) clearly in mind.

This very difficult decision says very clearly to me that this financial accounting and leadership is playing straight as an arrow by the book, making tough choices based on reality and not some pie-in-the-sky vaticination by a starry-eyed band geek.

Real business, finally.  Way to go, Cadets.  Great move.

 

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29 minutes ago, garfield said:

I didn't read the announcement until just now and here are a couple of thoughts:

Nowhere, in any way or any were, is there a box checked, a comment made, or a suggestion given that this $600m deficit is NOT made up entirely, or nearly entirely, of the overhanging potential liability of having to pay GH.  There is at least one sentence that could, possibly indicate that it IS the same $600m:

"What is known now is that on top of the financial shortfall that was inherited, and with the increased expenses incurred dealing with the previous leadership’s actions including legal fees, training fees, reductions in sponsorship and USBands participation, the organization now finds itself with an approximate $600,000 deficit."

If they were being careful with their words, and I'd bet they're insisting that their financial people are being very, very careful, and "deficit" is an operating income item that has not been converted to debt.  A potential liability would necessarily be addressed on the current financials, if even in the Notes to the financials according to FASB accounting standards.

It would, of course, also be perfectly appropriate to make 2019 expense projections with that deficit (or servicing its debt if need be) clearly in mind.

This very difficult decision says very clearly to me that this financial accounting and leadership is playing straight as an arrow by the book, making tough choices based on reality and not some pie-in-the-sky vaticination by a starry-eyed band geek.

Real business, finally.  Way to go, Cadets.  Great move.

 

Well put and I agree

ive read the statement and watched the video version a couple times now, also doing a bit of reading between the lines

they are seemingly taking a conservative approach and present a frank assessment of the situation

thinking long term vs quick bandaid solution

honest dialogue vs smoke and mirrors

its painful, very, to lose C2 - even short term

however the longer view they are apparently taking will serve the Cadets and YEA! best and is refreshing and reassuring to say the least 

 

 

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Best and smartest move they could make. Hopefully this will make the organization stronger and stable and run like a real company not some fantasy waiting for that big donation to keep them afloat for the season.

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27 minutes ago, cixelsyd said:

A few important details seem vague based on choice of words - maybe someone can clarify.

- Is the $600,000 really a "deficit" (a recurring shortfall in the annual budget), or a "debt" (a one-time thing)?  The YEA! announcement called it a "deficit", but many people use these two words synonymously.  The legal situation already led us to expect a $600,000 debt, but a budget deficit of that size would be extremely worrying.

- As others have asked, is the C2 corps gone or just sitting out temporarily?  The announcement used the terms "discontinuation", "eliminate", "suspension" and "end".  Three out of four sound permanent, but use of the word "suspension" clouds things.

- Has it been established anywhere that the anniversary corps is not paying its own costs, much less whether it had any impact on this decision?  Not one word of the YEA! announcement addresses the anniversary corps, which makes me think it is paying its own way.

Word last summer was that in the fall we would learn that the financial situation would be dire. It would be too large for people to expect donors would line up to save the corps but not something that with good budget folks and careful management that could not be solved. 

C2 had an incredible run, but it has always been a hotbed of speculation, much due to the former director’s ramblings. I see suspension as the word being used for “we don’t exactly know.” It can be temporary or permanent, and perhaps they cannot make a final decision now. They have to get the financial house in order.

I do not think the anniversary corps has much to do with the C2 decision, but if it is not paying for itself or at least has a donor or two willing to bankroll it. 

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1 hour ago, garfield said:

Wasn't part of the rationale of establishing C-2 to have feeder corps that soaks up demand to march with YEA!  I thought it was.

So, does this move indicate that said demand to march at YEA! has diminished?  If so, are there any prognostications of what that change might have been?

From a business perspective, it would make sense to me to funnel all the demand into Cadets to put the supply/demand equation back in relative equilibrium.  Is that a fair assessment, or part of one?

 

Was there ever a rationale for starting C2 that was consistent? Since the corps’ founding,  GH claimed the feeder aspect, claimed drum corps was out of reach for the best musicians and C2 was part of the solution, age outs wanted a better drum corps experience than what DCA offered and he was going to raise the standards, C2 was the beginning of rejuvenating DCA, it would give him the freedom to do what DCI would not...there were also hints, maybe even specific statements that I don’t recall, that C2 would eliminate those not eligible to march in DCI, compete in OC, and beat BDB and SCVC at their own game.  C2’s success was probably more in spite of things rather than fulfilling a clear purpose. I think for many reasons it was important for C2 to march last summer, especially where many thought it would be a casualty of the GH departure, but moving forward if the corps is fielded again, to have a clear purpose. 

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17 minutes ago, Tim K said:

Was there ever a rationale for starting C2 that was consistent? Since the corps’ founding,  GH claimed the feeder aspect, claimed drum corps was out of reach for the best musicians and C2 was part of the solution, age outs wanted a better drum corps experience than what DCA offered and he was going to raise the standards, C2 was the beginning of rejuvenating DCA, it would give him the freedom to do what DCI would not...there were also hints, maybe even specific statements that I don’t recall, that C2 would eliminate those not eligible to march in DCI, compete in OC, and beat BDB and SCVC at their own game.  C2’s success was probably more in spite of things rather than fulfilling a clear purpose. I think for many reasons it was important for C2 to march last summer, especially where many thought it would be a casualty of the GH departure, but moving forward if the corps is fielded again, to have a clear purpose. 

It was never their “overflow corps” although  few cut from cadets went there, it seems like just a few 

boston, etc were the cadets overflow corps when C2 was formed 

it was YEA wanting to serve more students with a weekend format and yes an opportunity to gain experience 

cadets never had thousands trying out or the most talent, they’ve just worked hard 

in their most competitive years they had a real issue with kids cutting themselves before ever trying out - that happens with a lot of top corps

seems impossible 

Edited by George Dixon

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Oh, and the other thing is picking a nit, maybe...

The "...10% of total budget" that the $600m represents is using total revenue of YEA!, which includes total revenue brought in by C-2 (and, specifically, not "profit" from C-2).  With C-2 gone, that revenue is no longer included in the $6mm "budget" used in the announcement.  I don't know exactly but, if revenue from C-2 was $500m, then the $600m debt would be closer to 11%, for example.

Again, nits are important sometimes, and this one might emphasize the size the of deficit more accurately.

If I have time later, or if someone looks at Guidestar before I do, it would should in YEA!s income statement what the total revenue contribution of C-2 was.

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Cuts are the first necessary step to addressing YEA’s current situation however all other challenges pale in comparison to the need for funding to keep their doors open and accomplish their mission. This is the challenge that all Drum Corps face in 2018.

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I'm making an exception of my absence and withdrawal by posting these, but the situation warrants it. And yes, I'm feeling ok but new round of cancer treatments begin next week.

At least one member of current BoD, perhaps two, is the parent of C2 alumni; the decision was not made lightly and has NOTHING to do with Alumni corps which is only a speculative possibility at this point with no performance appearances announced.  It is more the influence that "Giving Tuesday" was not that giving. Monies aren't there for C2 budget, a Hopkins product. Other DCA corps are local for those who wish to march weekends only.

I am surprised this article from yesterday's Allentown paper was not previously cited in the thread. Mr. Rutherford gives further comments. I won't, other than to cite that BD, SCV, and other major corps have cut back on their programs; BAC now has most expensive costs to mms. Times are $$$ tough for all corps.

 

 

Edited by xandandl
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40 minutes ago, Tim K said:

Was there ever a rationale for starting C2 that was consistent? Since the corps’ founding,  GH claimed the feeder aspect, claimed drum corps was out of reach for the best musicians and C2 was part of the solution, age outs wanted a better drum corps experience than what DCA offered and he was going to raise the standards, C2 was the beginning of rejuvenating DCA, it would give him the freedom to do what DCI would not...there were also hints, maybe even specific statements that I don’t recall, that C2 would eliminate those not eligible to march in DCI, compete in OC, and beat BDB and SCVC at their own game.  C2’s success was probably more in spite of things rather than fulfilling a clear purpose. I think for many reasons it was important for C2 to march last summer, especially where many thought it would be a casualty of the GH departure, but moving forward if the corps is fielded again, to have a clear purpose. 

Speaking of unclear purpose was C2 still operating with a maximum age limit? Think it was 25.

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