~ Unaligned News For The Dog Fancy ~
AKC ECONOMICS and WALL STREET
the economy worsens, AKC raises its Event Fees again!
Those fees come right off the top of every entry fee. With over $50 million in reserves,
why does AKC sock it to exhibitors with
a 300% fee increase!
Oct 01, 2008 | TheDogPress.com
Barbara J. Andrews, Editor-In-Chief
Update: As though this weren't enough, see Jan 2009 for news of the $25 per dog AKC Exhibition Tax.
For over a century, AKC relied on dog and litter registrations for fiscal health. That was AKC’s founding
purpose and it kept the AKC solvent. Astute observers relate the
unfolding financial crisis of September 2008 to those besetting
our sport. Warnings of looming disaster were ignored by
Congress, and that brought us to disaster. There have been
warnings that AKC is in trouble, even from AKC itself. When
banks and insurance companies took advantage of unthinking
consumers and a bloated, self-serving system, Wall Street
imploded. Only a few blocks away, AKC faces exactly the same
Dog shows were once small but self-supporting events.
They were to compare breeding stock, not to subsidize AKC.
Things changed as AKC became involved in the approval and
management of dog shows. Some would relate that change to the
growth of Wall Street itself. But times were good in the
fifties, business was booming and so were dog shows. AKC tacked
on a few cents for handling dog show paper work and that was
reasonable because all was well with the world and the sport of
forward to today. Watching the news, it’s hard to grasp the
enormity and personal implications of the global financial
crises. So let’s break down the AKC’s stability into something
that makes sense to every exhibitor. The AKC says event fees
don’t cover event expenses which, along with AKC’s increasing
involvement/control, have indeed increased. AKC now has over a
dozen primary departments relating only to dog shows, which
remember, were only peripheral to AKC’s original purpose. AKC
now oversees the clubs, as well as testing, approving and
monitoring Judges. Add to that cost, AKC Rep salaries, data
entry staff, and a hungry computer system to be fed.
Registrations generated a healthy (tax-free) income for the
better part of a century. Then along came merchandise and credit
card sales, endorsements, etc. and the AKC profited. For
example: AKC socked away $20 million bucks in the Endowment
Fund in just the last two years. And then there’s the $30
million Operating Reserve, which, when compared to the
$60 to $70 million dollar a year non-profit income, is probably
proportionate. We’re not sure what the $50 million-plus bankroll
is earmarked for but in view of the Wall Street crisis, let’s
hope it is safely invested…
Here’s why. Expansion based on sound business principals keep a
company healthy. Corruption and greed make it sick. Defrauding
stockholders is a terminal illness. Since so many of us have our
lives and our livelihood invested in AKC, we are stockholders.
So let’s look at the Event/Recording fee as a brokerage fee. In
January 2004, AKC effectively increased the recording fee from
50c to $2.00. The extra $1.50 was called an “Event Service Fee”
instead of a “Recording Fee” so it stepped outside the language
of the Rules, Chapter 11 but the result was the same –entry
fees went up 300% for each dog. There was some grumbling but
most dog people agreed that a “cost of living” adjustment from
the mid-1900s was appropriate.
But then in January 2008, AKC added an additional $1.50 to entry
fees. So after fifty years with no increase, and with clubs
struggling to stay afloat and exhibitors feeling the economic
downturn, a 700% increase per dog per entry hit
everyone below the belt. Superintendents, who depend on shows
having good entries, were less than thrilled. As entries
declined, they, along with the host clubs, were forced to act
like “tax collectors” and unfairly blamed for the higher entry
Our Delegates, the dog show world’s counterpart to
Senators and Congressmen, fearful of losing their position,
ignorant of, or complicit in the fees increase, kept silent. So
in June 2008, AKC proposed yet another incremental change to
Chapter 11. The proposal would have given the Board complete
authority to raise the Recording Fee by whatever amount the
Board decided at will and without Delegate approval.
It would have “legalized” what many, with 20/20 hindsight,
suddenly recognized as an incremental, illegal usurping of
Delegate authority that had been in motion since 2004. As one
judge remarked “just because someone robbed three convenience
stores and wasn’t caught doesn’t mean that he can get away with
robbing a fourth store.” Perhaps, like Mutual Fund reports, AKC
assumed no one would notice.
But ARTICLE XIX: RULES states “The Delegates to the AKC shall
have sole power to make the Rules governing dog shows and field
trials and the clubs or associations formed to conduct them.” So
the AKC Board put the change up for Delegate Approval. We’re
told the first vote was by a show of hands but the count was
challenged and a roll call vote was demanded.
Thus the Rule change was defeated by four votes! Close indeed
but every club whose Delegate voted against giving away their
authority can and should be proud. Who knows better than the
clubs themselves how much extra burden exhibitors can shoulder?
And it is the clubs who will lose the most if exhibitors walk
away. And walk they have! Update: January 2009, see new $25 Exhibition Tax, AKC calls an Annual Activity
We are learning a hard lesson today as Congress struggles to
save our economy. Hopefully, the growing demand that AKC
Delegates put their club’s best interest first will forestall
the collapse of our sport. AKC Clubs must insist that their
Delegates vote the will of the people. That is why checks and
balances were written into the democratic system, whether it
applies to the U.S. Constitution or the AKC Constitution and
Corporate Bylaws. Members of Congress who served their personal
political futures and “the party” instead of the people who
elected them will pay a steep price. Delegates, take note.
The solution for the AKC economic pinch is simple. Don’t bite
the hand that feeds you! Do like other service-based
corporations that can’t just pass the pinch along by raising the
price of their product. Do like our government must do to
prevent collapse and revolt.
Cut back on spending! That includes non-vital staff, travel,
entertainment, advertising, non-critical and uncommitted
donations, and lastly, do what your constituents wish they could
do - dip into that $30,000,000 Reserve Fund! What better purpose
for a Reserve Fund and who better to Endow than your core
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