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YEA suspends operations of Cadets 2 and Lays off 9 Employees


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2 hours 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.

 

Thank you sir. Well said!

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49 minutes ago, garfield said:

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.

I wonder if it's broken out that way by program, or if all membership fees from both corps, for instance, are lumped together so there's no way to tell.

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1 hour ago, garfield said:

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.

I don't see any breakout in their 2016 990 that breaks out income beyond events, USBANDS, program income and unrelated income.

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2018 is just more and more sadness in this organization. The previous leadership really screwed up everything. I surely hope this organization can get through this because it would be a shame to never see The Cadets on the field again. 

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14 minutes ago, troopers1 said:

I don't see any breakout in their 2016 990 that breaks out income beyond events, USBANDS, program income and unrelated income.

(Part III, "Statement of Program Service Accomplishments", page 2)

 

Edited by garfield
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2 minutes ago, 2000Cadet said:

2018 is just more and more sadness in this organization. The previous leadership really screwed up everything. I surely hope this organization can get through this because it would be a shame to never see The Cadets on the field again. 

I totally understand your, particular, heavy heart but I'd encourage you to look at all of this as being excellent and outstanding news for your beloved Cadets.

(psst, mine, too although I'm not a vet like you)

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1 hour ago, garfield said:

According to the 2016 990, revenue sourced to C-2 was $325,203, and expenses in that same program were $656,081.

Well, there's a quick savings of over $330,000 (in 2016 dollars) from shutting down C-2.

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From what I understand, this was more or less how it was the entire time they existed at YEA. A valuable experience for young people and an entertaining corps for audiences, for sure, but financially a loss for YEA each and every year. There have been rumblings about them being on the chopping block since year 1. I'm sad to see them go, but it really isn't much of a surprise, and considering YEA's current predicament, probably the smartest move.

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5 hours 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.

Yes, I believe that was one of the selling points of the organization when it was created- to provide the "Cadets Experience" to more individuals and help develop individuals up to Cadets level.

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