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Post by hostrauser on Dec 12, 2022 21:13:26 GMT -6
Rising costs and financial mismanagement has finally sunk one of DCI's main corps.
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It is with grief and sorrow that we must announce the cessation of operations for the Santa Clara Vanguard for the season of 2023. Throughout the past months, a multiplicity of financial stressors have culminated into an unavoidable financial shortfall. This shortfall has been made more insurmountable by lower than expected bingo earnings and the rising cost of summer travel and tour overhead.
Throughout the past months, the VMAPA board has worked very hard with executive leadership to explore creative financing options, drastic budget cuts, and creative fundraising options designed to bridge Vanguard into a more lucrative future. Each of these options had the result of lowering the quality of the member and employee experience, and leaving VMAPA in a far more vulnerable financial position after the tour of 2023. The summer of 2022 was extremely expensive throughout the entire drum corps activity. The cost of goods and services necessary for the 2023 tour have risen even higher than the costs of the 2022 tour. Without the ability to accurately forecast many of the variable costs (e.g. fuel, food, supplies) in the summer of 2023, the cost of 2023 promises to be more than we can accurately project. In addition, bingo is seeing substantial and sustained lower income as customers deal with the higher cost of goods and services in their own lives.
What We’re Doing About This
VMAPA is very close to opening a second bingo game that will provide much needed funding to right the current budget shortfall. This second bingo was scheduled to open in late 2021. Due to a complicated set of circumstances outside the control of VMAPA, this game remains dependent upon the Redwood City council adopting our proposal and passing a simple resolution. Twenty twenty three looks promising for this new location as we continue to lobby for this resolution. Additionally a special task force of volunteers continues to seek more gaming opportunities. The cessation of Santa Clara Vanguard this year creates solvency and time to restructure the VMAPA organization to meet the financial demands of the future. More efforts for financial development are also underway.
To The Members
The timing could not be worse for this final decision. Every single option available to avoid this resolution was explored. Each option available would have left the future of Santa Clara Vanguard in jeopardy. We realize this situation will have a major effect on your lives. For this, we grieve with you. This year will pave the way for the survival of SCV. Continuing with this year would endanger the ability for SCV to exist beyond 2023. Maintaining the foundation for SCV to exist beyond this year is the primary responsibility of the board and executive leadership. While this decision was difficult, there was no viable alternative. This decision ensures the financial health of SCV in time for auditions in the fall of 2023.
Vanguard will survive this setback and be the standard for excellence and performance once again soon. Unthinkable times demand unthinkable solutions. While this is a difficult time, VMAPA is not willing to leverage the future of the organization with hopeful financial projections that will not square with reality. While this decision may seem detrimental to the future of SCV, it serves to ensure the success of SCV in future years. With this in mind, we make the sacrifice of a single year to ensure a thriving future for Vanguard for many years to come.
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Post by abtwitch on Dec 12, 2022 21:14:09 GMT -6
Man.
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Post by dbalash on Dec 12, 2022 21:21:03 GMT -6
I don't think it'll be the only one either unfortunately.
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Post by hostrauser on Dec 12, 2022 21:34:49 GMT -6
I don't think it'll be the only one either unfortunately. The only surprising part for me is that they were the first. But SCV has been running in the red a long time now. They have quite a hill to climb to get back to DCI. DCI's current model is unsustainable. It is slowly suffocating all of the member corps. |
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Post by pitplayer19 on Dec 12, 2022 23:24:10 GMT -6
Well this sucks
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Post by statechamp1239 on Dec 13, 2022 8:17:06 GMT -6
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Post by philodemus on Dec 13, 2022 8:30:09 GMT -6
This hurts. Like... actually, really hurts. Probably more than any other corps would have.
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Post by thewho on Dec 13, 2022 9:17:42 GMT -6
This is pretty disheartening to read all on its own, but it's even more disappointing to know this was going to happen sooner or later. DCI is not a sustainable business for most the way the tour is set up and the support from the central organization.
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Post by philodemus on Dec 13, 2022 9:50:45 GMT -6
I have no idea if this was a major issue in this particular decision, but I have wondered for years now if touring drum corps might have been a phenomenon of 'peak oil.' That is, the notion of moving teams of hundreds of people across a continent for months at a reasonable cost would have been ludicrous at any other time in human history... save the mid to late 20th century when cheap gasoline & diesel made it momentarily not-ludicrous. Perhaps gasoline is only tangentially related to this particular decision, but I wonder if long-term that is the stressor that will kill our beloved activity. There will be fluctuations, but the fundamental reality is that no more dinosaurs are dying, and the finite supply of portable, liquid energy will only go up in cost.
Perhaps if drum corps can hold on long enough for cheap electricity and better batteries, it could be revitalized... but even as I type that, it feels forlorn.
The gut punch is that the regional drum corps model would be more sustainable... but it was killed off by the elite groups who didn't have time for it any longer.
The first summer with no tour is going to feel like a family member has died, and I'm afraid it's going to be sooner rather than later.
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Post by OldSchoolTrumpet on Dec 13, 2022 12:24:05 GMT -6
This is very sad. I only follow drum corps peripherally these days as most of the programming is not so much to my liking any longer. But SCV was one of my favorites from the days when I followed closely, the late 1970's through late 1980's. It's almost impossible to imagine DCI without SCV. I hope they can return in 2024.
An aside, I fear that we'll be seeing more of this. The current DCI model seems almost unsustainable for more than a select few corps, though until yesterday I'd have put SCV among those. And to be a Johnny Raincloud about it I see HS marching band following the same path. But, there's no putting the genie back in the bottle.
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Post by dbalash on Dec 13, 2022 13:07:37 GMT -6
I don't think it'll be the only one either unfortunately. The only surprising part for me is that they were the first. But SCV has been running in the red a long time now. They have quite a hill to climb to get back to DCI. DCI's current model is unsustainable. It is slowly suffocating all of the member corps. Their financials are no bueno. Losing one of your main money makers in bingo due to COVID certainly doesn't help. As of 2020, they were ~$1.8M in the hole. In 2019, they paid out $1,919,975 in salaries, which is ridiculous. Crown, by comparison, paid out $322,233. |
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Post by dbalash on Dec 13, 2022 13:39:59 GMT -6
Let's look at the 2003 World Championships, held in Orlando. Out of 33 Division II/III corps, 3 remain: Blue Stars, Spartans, Jersey Surf. Out of the 23 Division I corps, we fare a little better, with 17 fielding in 2023 (Vanguard, Pioneer, Kiwanis Kavaliers, Glassmen, Magic of Orlando, Capital Regiment having folded/taking a year off.) Right now, we're at 33 corps fielding this year, 12 Open Class and 21 World.
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Post by Shroom on Dec 13, 2022 18:21:40 GMT -6
Let's look at the 2003 World Championships, held in Orlando. Out of 33 Division II/III corps, 3 remain: Blue Stars, Spartans, Jersey Surf. Not to mention that one of these three, Jersey Surf, was barely able to finish the 2022 season due to finances and needed a ton of donations to keep the ball rolling. |
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Post by trombonium on Dec 13, 2022 21:38:39 GMT -6
What do we think guys -- does SCV return in 2024 or are they boned for good? If they really are ~ $2 million in the hole then I think it's a pretty grim outlook, even taking 2023 off. Hoping I'm wrong of course; I don't know much about DCI finances anyway.
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Post by N.E. Brigand on Dec 13, 2022 21:48:56 GMT -6
I don't think it'll be the only one either unfortunately. The only surprising part for me is that they were the first. But SCV has been running in the red a long time now. They have quite a hill to climb to get back to DCI. DCI's current model is unsustainable. It is slowly suffocating all of the member corps. And since DCI is the corps, that means they're committing financial suicide. |
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Post by Subito Fortissimo on Dec 13, 2022 22:50:56 GMT -6
What do we think guys -- does SCV return in 2024 or are they boned for good? If they really are ~ $2 million in the hole then I think it's a pretty grim outlook, even taking 2023 off. Hoping I'm wrong of course; I don't know much about DCI finances anyway. Its going to be very difficult to climb out of the hole they're in. It will definitely take some massive fundraising efforts and help from some creditors willing to rework their debts for them to return at all, much less in 2024. But we will see what happens with drum corps in general. This has clearly shaken a lot of people much more than when an Open Class or lower end World Class corps goes inactive or folds, as it really should. The 2023 season seems to be pretty set in stone at this point but we may see some drastic changes for the 2024 season that may make it more feasible for SCV to return. Ultimately DCI is the corps so if the corps wish to survive then they need to force the necessary changes to happen. |
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Post by paddy on Dec 14, 2022 8:47:47 GMT -6
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Post by N.E. Brigand on Dec 14, 2022 13:15:40 GMT -6
Thanks for sharing those links. I'm not an accountant, but at a quick glance: SCV had $2.4 million in net assets as of October 2020, losing abut $1.3 million that fiscal year when they were just keeping relatively minimal operations going during the first year of the pandemic. And they haven't yet filed their 990 (or ProPublica doesn't yet have it: there's a note about how the IRS has been "substantially delayed" in making this information available) for the fiscal year ending October 2021 -- with the longest possible extension, that ought to have been filed by Sep. 15, 2022 -- when they did some sort of virtual video production, as I recall; curious about how that year compared. It's the fiscal year that just ended that probably shows the big hit, and those tax filing aren't due until as late as next September, and might not be available to the public for a while after that. I finally looked up a point that's nagged at me once each year for the past decade (thinking to myself, "Why are they asking us this?"): Why is there a question about tanning services on the 990? The answer is Obamacare, the "Snooki tax," and social clubs. BD's net assets held relatively steady at $1.6-$1.9 million for a while, but fell by $700,000 in 2018 -- does anyone know why? -- then improved slightly in 2019 and then were cut to less than $500,000 in 2020. That's not much of a cushion. BD's fiscal year ends in December, so their 990 for 2021 might have been filed less than a month ago. (I argued about ten years ago that drum corps needed to fundraise for endowments from which they could spin off revenue. That's far easier said than done, of course, since it would in addition to their regular fundraising efforts. And it's unlikely that any efforts that started then would be yet ripe to pay out much. The non-profit arts organization I work for has been trying to build its endowment for decades, and it's now just about the size of the operating budget, which means that it contributes about 5% to operating income each year. I've heard it said that a performing arts organization should have an endowment worth two to three times the annual budget. If BD and SCV have $4-$5 million in annual expenses, a $12 million endowment would generate $600,000 for operating expenses each year (at least, after you've had it in place for three years: draws are typically based on the average over the previous twelve quarters). On the other hand, even if you're in a position to raise $12 million, not everyone agrees that putting it toward an endowment rather than current and near-term operations is the right way to go.) |
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Post by paddy on Dec 14, 2022 15:29:52 GMT -6
Thanks for sharing those links. I'm not an accountant, but at a quick glance: SCV had $2.4 million in net assets as of October 2020, losing abut $1.3 million that fiscal year when they were just keeping relatively minimal operations going during the first year of the pandemic. And they haven't yet filed their 990 (or ProPublica doesn't yet have it: there's a note about how the IRS has been "substantially delayed" in making this information available) for the fiscal year ending October 2021 -- with the longest possible extension, that ought to have been filed by Sep. 15, 2022 -- when they did some sort of virtual video production, as I recall; curious about how that year compared. It's the fiscal year that just ended that probably shows the big hit, and those tax filing aren't due until as late as next September, and might not be available to the public for a while after that. I finally looked up a point that's nagged at me once each year for the past decade (thinking to myself, "Why are they asking us this?"): Why is there a question about tanning services on the 990? The answer is Obamacare, the "Snooki tax," and social clubs. BD's net assets held relatively steady at $1.6-$1.9 million for a while, but fell by $700,000 in 2018 -- does anyone know why? -- then improved slightly in 2019 and then were cut to less than $500,000 in 2020. That's not much of a cushion. BD's fiscal year ends in December, so their 990 for 2021 might have been filed less than a month ago. (I argued about ten years ago that drum corps needed to fundraise for endowments from which they could spin off revenue. That's far easier said than done, of course, since it would in addition to their regular fundraising efforts. And it's unlikely that any efforts that started then would be yet ripe to pay out much. The non-profit arts organization I work for has been trying to build its endowment for decades, and it's now just about the size of the operating budget, which means that it contributes about 5% to operating income each year. I've heard it said that a performing arts organization should have an endowment worth two to three times the annual budget. If BD and SCV have $4-$5 million in annual expenses, a $12 million endowment would generate $600,000 for operating expenses each year (at least, after you've had it in place for three years: draws are typically based on the average over the previous twelve quarters). On the other hand, even if you're in a position to raise $12 million, not everyone agrees that putting it toward an endowment rather than current and near-term operations is the right way to go.) In the 2018 filing, BD had an increase in liabilities of $400,000 in accounts payable and $340,000 in unsecured notes/loans which meant decrease in assets. In the most recent Vanguard filing there was an increase in liabilities of $1.4 Million labeled "Federal Taxes" on Schedule D Part VIII which seems concerning to me. |
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Post by hostrauser on Dec 14, 2022 19:42:02 GMT -6
I have no idea if this was a major issue in this particular decision, but I have wondered for years now if touring drum corps might have been a phenomenon of 'peak oil.' That is, the notion of moving teams of hundreds of people across a continent for months at a reasonable cost would have been ludicrous at any other time in human history... save the mid to late 20th century when cheap gasoline & diesel made it momentarily not-ludicrous. Perhaps gasoline is only tangentially related to this particular decision, but I wonder if long-term that is the stressor that will kill our beloved activity. There will be fluctuations, but the fundamental reality is that no more dinosaurs are dying, and the finite supply of portable, liquid energy will only go up in cost. Perhaps if drum corps can hold on long enough for cheap electricity and better batteries, it could be revitalized... but even as I type that, it feels forlorn. The gut punch is that the regional drum corps model would be more sustainable... but it was killed off by the elite groups who didn't have time for it any longer. The first summer with no tour is going to feel like a family member has died, and I'm afraid it's going to be sooner rather than later. Travel/Fuel, Food, and Staff are the three biggest financial sinks for every corps. I personally believe a regional drum corps model is one of several mandatory changes DCI has to make if it wants to survive. That would mean Championships week would be the first and only time all season that corps would be together, but that's not necessarily a bad thing: it's just not what we've gotten used to. SCV will not be the only World Class member to fold or go on indeterminate hiatus in the next couple of years. They might not even be the only one to do so this offseason. June 2023 is a long ways away. As with most things (it seems), DCI has had their head in the sand and have taken virtually no steps to mitigate this inevitability. |
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Post by hostrauser on Dec 14, 2022 19:48:10 GMT -6
What do we think guys -- does SCV return in 2024 or are they boned for good? If they really are ~ $2 million in the hole then I think it's a pretty grim outlook, even taking 2023 off. Hoping I'm wrong of course; I don't know much about DCI finances anyway. I have been told that changes over the past year or so enabled SCV to whittle their debt down to around $500,000, which I believe is where it currently sits. When planning for 2023, Vanguard executives forecasted a shortfall of an additional $1.0 to $1.5 million had they gone on tour, basically erasing what progress they had made (and bringing their debt back up towards $2 million total), so they decided to sit out 2023. This is all well and good, but Vanguard has a revenue stream problem. They are planning on opening another bingo hall in Redwood City and expecting that to be their savior, but I think that's foolish. Bingo halls are the past, not the future. The Blue Devils have at least taken steps to diversify their revenue (BD Entertainment and taking over the Western Band Association and running a high school marching band circuit are two that come to mind), but Vanguard has not done that. And, admittedly, it is much easier to raise this question than to answer it. But without striking new frontiers in earning money, I think the long-term financial outlook of Vanguard (and, honestly, every other DCI corps) is very fragile. |
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Post by dbalash on Dec 14, 2022 20:11:34 GMT -6
You know what the weirdest thing about this is? I had staff member friends from several marching bands sharing their students posts about being contracted by Vanguard this past weekend, and then, boom.
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Post by trombonium on Dec 14, 2022 21:17:00 GMT -6
You know what the weirdest thing about this is? I had staff member friends from several marching bands sharing their students posts about being contracted by Vanguard this past weekend, and then, boom. I've got a friend who's been in audition camps for some other DCI corps the last few weeks and was on SCV's mailing list. He was getting e-mails notifying him of a few more open spots at SCV as if everything were normal just a few days ago. I hope it's not too late for people who auditioned for SCV to jump to another corps, given that they had literally no warning. |
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Post by Subito Fortissimo on Dec 14, 2022 21:32:39 GMT -6
I have seen some discussion over the last couple days about the suddenness of this while SCV had been holding camps and contracting corps members. A lot of "who knew what and when" and whether higher-ups in the corps knew this was coming earlier but allowed the corps to continue holding camps to collect camp fees from people who thought they were being given the opportunity to march with the corps when in reality that opportunity was never going to exist. It's a big can of worms but some questions definitely need to be asked. These financial issue are definitely not something that just suddenly arose in the last week.
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Post by N.E. Brigand on Dec 14, 2022 22:01:52 GMT -6
I imagine SVC's leadership has known that canceling 2023 was a real possibility for some time, but I can't fault them too much for continuing to plan on a season until that was a certainty. Possibly they had some requests out to key donors for support to bridge the gap and it was only after those solicitations fell though that the made the hard call.
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Post by boahistorybuff on Dec 15, 2022 20:54:44 GMT -6
Also have to mention that SCV has been the only corps to be in DCI Finals every single year. I hope they can come back, but this is very big. Certainly an end of an era moment. Looking through the history of drum corps, it seems that inflation and high gas prices took their toll on a lot of corps in the late 1970s and early 1980s.
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Post by bigblue2019 on Dec 16, 2022 12:48:45 GMT -6
Most of what has been said isn't surprising and I've thought it. Just a few thoughts.
This didn't happen over night.
SCV spent themselves into this.
How does one have $3 million in expenses in a non competing year?
The "Salaries & Wages" holy cripes. Don't get me wrong. People should get paid. Having S&W at almost 2 million?? that's 40 staff at $50,000 (just being hypothetical).
Someone correct me if I am wrong on this, "DCI" is run by the Board and the Board is primarily corps directors? So when people lament DCI needs to change, well the BOD needs to make those decisions, but the BOD is basically the corps directors.........seems like an endless merry go round. BUT Correct me if I am wrong. I've been wrong once...it was a thursday..LOL
The fact that other corps are reaching out and saying oh you can audition with us and what not, tells me they aren't even at the 165 threshold.
Is this the beginning of the end?
Is drum corps dying from the inside out?
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Post by hostrauser on Dec 16, 2022 22:23:48 GMT -6
I imagine SVC's leadership has known that canceling 2023 was a real possibility for some time, but I can't fault them too much for continuing to plan on a season until that was a certainty. Possibly they had some requests out to key donors for support to bridge the gap and it was only after those solicitations fell though that the made the hard call. Let's not forget that SCV has had a ton of leadership turmoil recently, with three corps directors in four years (including a new one just announced in September) and three executive directors in five years (with the newest only being in the position for a year). I get the feeling the new people in charge have had their hands full cleaning up the messes left behind and yes, I would assume they waited until the absolute last possible moment to finally pull the plug on 2023. |
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Post by N.E. Brigand on Dec 19, 2022 0:22:53 GMT -6
The "Salaries & Wages" holy cripes. Don't get me wrong. People should get paid. Having S&W at almost 2 million?? that's 40 staff at $50,000 (just being hypothetical). For those who haven't checked the links (and rounding to the nearest thousand): ProPublica's 990 summary for FY 2019 shows SCV's figure for non-executive salaries at $1,920,000. Plus another $152,00 for executive compensation. That's up significantly from $1,340,000 + $155,00 the previous year. By contrast, BD in FY 2019 listed other salaries and wages of $1,322,000 and executive compensation at $364,000. The prior year, BD showed $233,000 for executive compensation but zero for other salaries. Which may be a useful reminder of the limitations of these documents. Obviously, BD must have spent a similar number in 2018 to what they spent in 2019. But either they listed it someplace else on their 990, or ProPublica's way of collating the data didn't put it in the right place that year. |
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Post by dbalash on Apr 26, 2023 9:04:21 GMT -6
Vanguard is in delinquent status with the state of California as a charity. They have not provided audited financial statements (having been requested since 2020), which means they are not (and have not) allowed to solicit donations.
There's a fascinating 25+ thread on DCP.
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