September 8, 2008
Dear Mr. Menaker,
In the September 2008
Chairman's Report, you expressed concern about losing revenue to the “retail
sector”. I understand the American Kennel Club (AKC), like any organization, can
not sustain itself while hemorrhaging red ink. But your anxiety and resulting
philosophy concerns me greatly. I can’t imagine you are unaware that responsible
breeders never sell to retail outlets, even though they know well that the
returns on any given litter will never exceed the expenditures to produce it.
Yet they continue out of pure devotion to their breeds. The AKC, however, has
seemingly reduced the fancy to little more than figures on a balance sheet.
I’m sure you realize that producing quality puppies and chasing the marketplace
are not parallel directions, but rather, are diametrically opposed concepts; one
based on increasing quality, the other on revenues from greater volumes of
We all recognize fuel costs have soared, food prices have all but leapt off of
the countertop, and the whole economy is sluggish at best. But increasing
revenue is not the only option, as most financial challenges are best met by
cutting expenditures and offering a better product. Sadly, you seem to be
seeking the former with no reliance on the latter.
you say, “The declining registrations and associated core revenues, if
allowed to continue, will fundamentally change our organization going forward.
Make no mistake, the very future of the AKC and our sport is at risk.” Loss
of income and core revenues means only one thing; your customers are finding a
better product elsewhere. You state that the AKC was a premiere brand. Courting
the commercial market does nothing to restore your brand’s value. Walmart has an
enormous market share but you’ll never find Rolex watches at their jewelry
counter. If you want to restore the AKC’s reputation, you must support
superlative breeders instead of chasing the industrial market. Quality breeders
will never risk associating their reputation with the likes of Petland.
At one point, you state, “there are at least 30 All-Breed registries in
addition to the AKC, whose combined registration numbers exceed that of the
The truth is, there is only one other credible all-breed “registry” in the U.S.,
the United Kennel Club (UKC). The others are pseudo-registries, with nothing to
offer reputable breeders. Becoming like them only cheapens the AKC’s value. (See
“The Problem With Papers”.)
Yet you persist, “If this
trend is allowed to continue, if we do not stop the hemorrhaging of declining
registrations, we will no longer be the premier registry in the world, let alone
in our country.” I’m afraid you have misunderstood the public’s desire for
the quality superior breeders produce. If by “premiere” you mean being the
biggest registry in the world, then “hemorrhaging” is a problem. If however
“premiere registry” means being the world’s best, then the obvious conclusion is
that you can never also be the biggest. It’s a matter of quantity or quality. In
this market, you’re either the biggest or the best. That, sir, is your true
You said “Management has been directed by the Board to aggressively pursue
all dogs eligible for AKC registration. We intend to reach out, communicate, and
educate those in the retail sector as to why an AKC puppy is the gold standard
and why they should be registered with American Kennel Club. In achieving this
objective we intend to continue to ‘raise the bar’ by vigorously enforcing our
policies. This action is essential to protect and preserve our leadership.”
This is in fact, a complete oxymoron! The “retail sector” is the puppy mill
industry, noted for the least quality possible. You intend to educate THEM? I
believe you have tried ever since you became CEO but they have no interest in
AKC’s “gold standard”, which is bronze at best because of your unfettered
efforts to cater to them. They will never replace quantity with quality, and in
the meantime you have denigrated the work done by reputable breeders. As you
seek to enfold the pet production market, it signals the public and the
dedicated breeder that the AKC is not the Neiman Marcus of our sport, but rather
the canine version of K-Mart.
You can’t “raise the bar” by lowering it! AKC tried to woo back the industrial
pet market with special inducements not offered to show breeders. That too
backfired. The millers didn’t need AKC but your actions so soured premier
breeders that many left the sport. I know it is a quandary for AKC. If you
enforce policy and uphold commitment to the original
AKC mission statement,
registrations would reduce even more as many retail breeders would not be able
or willing to meet your requirements. But that also identifies the heart of the
issue. Will AKC be the biggest or the best?
You assert “As the pre-eminent and only not-for-profit registry, we live our
values everyday with our commitment to the integrity of our registry and the
excellence of our inspections program.” It appears that you intend to
register any dog that the owner states has an unbroken line to registered
ancestors. Where is the assurance of integrity in that? Can you not see that
once pups are placed, even reputable breeders have little to no control over
their future propagation? More than just a few of us have experienced situations
where someone has violated a contract, took their AKC registered dog(s) –
including those with limited registration – and bred them in a corrupt manner or
registered them with a puppy mill registry. Some even switch sires or add ghost
puppies to litter paperwork. I know DNA profiling was meant to prevent that, but
it occurs regardless. And once you open the door to puppies from unregistered
litters, then both Limited Registration and DNA profiling become
meaningless, along with the AKC stud books.
The new registration service offers absolutely nothing to your core breeders.
Instead, it drives us away from AKC. Do you then plan to replace us with the
people who bought pet puppies with no papers? You will undermine the only thing
that makes an AKC registration worthwhile, the purity of your studbooks, and
that is the unmitigated surrender of your integrity, and ours.
As to requiring adherence to your “compliance and inspection programs”,
again, you speak of elevating the quality of AKC puppies. You do realize if you
truly held to a strict quality assurance program, you would lessen the number of
registrations? Again, it’s either quantity or quality. You can not escape this
principle. Your largest producers will deem AKC too restrictive and be unwilling
to submit to your inspections. You are an astute businessman. So let me ask you.
Will they loose income by lessening output or spend money to raise the level of
I doubt you will be able to suddenly turn the commercial market into a front
from which happy and healthy show quality puppies spring forth. The commercial
market that you seek doesn’t care about puppy socialization, genetic health
screening, exercise requirements, grooming, and least of all, adherence to breed
standards. It cares only about hard, cold cash, which is alarmingly close to the
core value that seems to fuel your most recent efforts.
Then you assert, “The American Kennel Club provides what no other registry
provides" I’m not sure what the AKC is able to give us that the UKC can’t
provide. You speak as if the AKC is the only venue exhibitors have. Granted, an
AKC championship still outshines nearly all other titles. But in most breeds it
is also less difficult to obtain than a UKC Grand Championship, and the UKC
shows are more fun to attend. They are far less stressful, wonderfully informal,
have no professional handlers, and use many of the same judges as does the AKC.
UKC also offers something your registry does not, the Total Dog title, which
requires qualification in both performance and conformation on the same day. UKC
dogs are required to do much more than just look the part; they must also be
able to perform. So as exhibitors, we are already experiencing, “the same
joys and passions we have so fortunately enjoyed for more than a century,”
and are doing so at considerably less cost.
When you talk about a
“staggering 53% decline” in registrations, this has little to do with other
registries. Are you oblivious to the fact that those of us in the show fancy
often have multiple registrations on our dogs? My own are AKC and UKC
registered, with conformation and performance titles from both. When the UKC
invited the nation’s most respected single-breed and all-breed registries to a
summit, it was the AKC who declined to attend. By acting as a separatist, AKC
cut off potential allies and breeders who would have benefited through dual
registration. And let’s not forget the firestorm that arose over your decision,
now reversed, regarding judges holding dual approvals.
All of this leads me to wonder if you are seeing this situation correctly. Maybe
the reason AKC registrations are falling is because of brand value. The AKC must
become something more than just an advertizing tool in the local classifieds.
You will never be able to hold sway over the likes of the American Pet Registry,
the National Kennel Club, the Universal Kennel Club Inc., or any of the paper
mills. They will always be the darling of the commercial market, and in the eyes
of many – if not most of us within the sport – they are spouses within a
marriage made in Hades.
unscrupulous will always take the track of less effort. So compromising your
standards for the sake of increasing revenues should work. For example,
AKC's Deal With Petland would have clearly padded your bottom line. But as we made
abundantly clear, it would have sold out we who hold our reputations in the
highest regard. You surely would have increased your commercial share, but the
AKC brand would have been trashed.
So maybe this isn’t about the sport. You say that, “as we lose registrations,
we also lose our core revenues, our ability to generate alternative revenues and
our legislative influence.” Is it really all about “core revenues”? You say
you want to, “get back on track growing our influence as the premier registry
in the world.” I grant you, the AKC was the premiere pride of our sport. But
the reason you have lost standing is because you sold out chasing those “core
revenues”. You should be striving to ensure that the buyer of an AKC puppy
owns something above those bought in pet stores, flea markets, and back alley
parking lots. By your present policy, the next door neighbor’s sex education
project for their children is suddenly placed on the same level with our highest
show champions. To have an AKC registered dog means little, if anything, these
days. And this is all because of your focus on fiscal returns over the quality
of our Best In Show specials.
You say, “AKC puppies and our breeders are the best”; that, “they are
the ‘Gold Standard’ in the marketplace.” Reading this makes me wonder if you
have been out in the trenches as of late. The average person sees no difference
between AKC and the Continental Kennel Club. In the near twenty years I’ve been
a breeder, an AKC registration only meant the dog was purebred, not that it had
any inherent quality. And the reason the other “registries” are weakening your
position is because you are seeking to emulate their practices. You are not
bringing the sport up to a higher standard, but rather, you are sinking the
AKC’s reputation to a much lower one.
Then, when you say, “No one is suggesting we lose sight of our rich heritage
and traditions,” sir, it has never been part of our rich heritage or
traditions to supply fodder to the pet market! Have we not always been dedicated
to producing only the highest quality and most healthy specimens our kennels can
generate? “Pets” come from sorting out the exceptional, and then placing the
rest into the homes of average pet buyers who should have a puppy that is, in
nearly every aspect, the equal to our champions. Again, you have contradicted
the very direction you now propose.
I also beg to differ that the millions of registration dollars you collected
from AKC pet owners, “overwhelmingly subsidized our sport.” Other than
sanctioning events, and the AKC Canine Health Foundation (CHF), what services do
you really provide? Ironically, when we send information to help identify puppy
mills, we are told that you are just a registry and that it is not your function
to police the breeding community.
When I was on the board of a breed club, AKC never once sent us a check to cover
any of our expenses. We expended our own club’s resources for our events. The
judges pay for their required seminars and other education. The clubs pay the
judges, pay for the facility, the superintendent (if one is used), the
equipment, food, advertising, printing, postage, and in the end, when all of the
entries fees are collected, we send a check to you!
You say, “let me make it clear to all, that the AKC will continue to
enthusiastically support the Parent Clubs' Codes of Ethics including, as it
relates to their members' sale of puppies through commercial entities.” But
wait, isn’t that the very market you intend to pursue? Or are you looking to
make headway with the backyard breeders, who are equally as abhorrent to your
AKC member clubs? I’m not sure how you can reconcile your concept, as even local
breed clubs have stipulations that members can never sell puppies to brokers or
In the end, I guess the most telling aspect of your report is as follows:
“If the current trend
continues and dog registrations decline to 250,000 over the next several years,
AKC will face an annual revenue shortfall of $40 million. To put this in
perspective, if this scenario occurred, and we relied solely on raising the
event service fees to make up for this revenue shortfall, the fee would be a
staggering $20 per entry. Our preference would be to grow our registrations to
the point that we could lower, not increase event fees. Some would say the
obvious solution is a significant reduction in expenses. However, a $40 million
revenue shortfall would necessitate a reduction of our expenses by two-thirds.
This is totally unrealistic.”
Either way, you lose market
share. And the question begs an answer as to why you have such high expenses.
Yes, you reduced the number of employees but AKC still resides in some of the
country’s most expensive real estate. Shouldn’t you have moved your entire
operation to North Carolina where the cost of living is so much lower? AKC may
well have a revenue crisis, but you also have a serious expenditure problem.
I do believe our sport faces great risk, but I dare say it is not from lost
revenue to any single registry. We are in far greater danger from Breed Specific
Legislation (BSL) than from the fiscal trials facing the AKC. By fostering
commercial breeders, you actually feed into the pet overpopulation hysteria.
Your desire to increase funding is the very attitude that puts the sport in
greater peril! Embracing the commercial market ushers in the likes of Petland,
Jack’s Pets, and the whole of the Midwestern milling industry. They flood the
country with countless hoards of substandard pups – complete with genetic and
health problems – lending credence to PETA, the Humane Society of the U.S., and
even such fanatical groups as the Animal Liberation Front. If you succeed in
this unholy alliance, these organizations will gladly push us over the edge to
My advice is to simplify your operation and cater to those who will bring you
the most honors. Our future should never include legitimizing industrial puppy
breeding! It should remain as the home-spun sport we, the reputable breeding
community and the astute puppy buyer, have supported for ages. Our sport should
not be professionalized to the point where it turns off the average
breeder-exhibitor. AKC must address the puppy mill problem, not contribute to
it. And most of all, it should protect us against the ravages of BSL by uniting
with other organizations dedicated to our cause. Do this, and we will gladly
bring our registrations to AKC.
If you truly want to regain being the “Gold Standard” of our sport, then give us
a registry whose aim is to follow your own mission statement. If you continue to
chase after market share in place of strengthening your bond with us, AKC will
shrink to nothing more than a top-dollar pet registry, with little support or
respect from anyone. Backing the mills means abandoning us, along with your own
parent clubs. My hope is that you will listen to us, lest you find in the end
that the AKC has traded its status for money without value, such as is
exemplified by the collapsing banking and insurance industry. As the CEO of AKC
and someone formerly in the banking business, you should know this principle
better than anyone. You should also recognize the greatest treasure of all is
the ability to validate our fine and noble breeds.
I guess the Bible says it best, "No one can serve two masters. Either he will
hate the one and love the other, or he will be devoted to the one and despise
the other.” ¹ In the end Sir, whom will you serve?