CFC Fees Review

[Bob Armstrong]

Motion 2009-06 was passed by the Governors on December 8. This motion rescinded the July 2008 CFC AGM motion lowering annual memberships, and raising rating fees, among other things.

Earlier, in GL # 2, released about October 10, CFC President David Lavin, stated:

" A number of motions have been tabled in this Governor's letter. I support motions ...and 2009-06. I stated when running for the CFC Presidency that we need a holistic solution to the problems that the CFC is facing. These ad hoc motions moved by Barry Thorvardson and seconded by
Garry Gladstone [ these motions amended the July AGM motion; they were motion 2009-07 - elimination of the tournament playing fee ( popularly called the " tournament membership " ); motion 2009-08 - instituting a 40% annual membership discount to first time CFC 'ers ] do not take into account the overall operating budget of the CFC.
Financial decisions made in a vacuum are foolish in the extreme. Until the effect of the implementation of SwissSys, the outsourcing of the book and equipment business to FEN, and the implementation of the new ezine are clear, we lack the information required to make an informed decision on what membership and rating fees should be. ."

The Grassroots' Campaign partly agreed with David. They had sponsored the motions 2009-07 and 2009-08 , and also motion 2009-09 ( reducing the junior rating fee from $ 5 to $ 1 ). So they withdrew these motions, to clear the way for motion 2009-06 to be voted on, cleanly, without having to deal with amendments to it.

With the July AGM motion, and its fee changes slated for Jan. 1, 2009, now gone, there can be a full review of CFC fees, in the light of current CFC finances.

A number of the outstanding CFC financial issues David mentions in October, which he felt had to be known before CFC fees could be dealt with, have now been brought to conclusion, or are in process , close to being concluded ( implementing SwissSys; winding up the CFC Retail Business; establishing the new On-Line Chess Canada ).

So are we now in position to have the CFC do the needed " full review of CFC Fees , in the light of current CFC finances" ? Is this a priority with the Governors? If so, what form will this review take? Will it be Executive driven, with consultation only with the Governors? Or will it be broader, and involve receiving input from ordinary CFC members? These are important questions/decisions.

Some members have expressed their views on Canadian chess websites, that they feel their memberships were reduced in value with the termination of the print magazine Chess Canada, but there was no lowering of the annual membership fee ( and the anticipated lower fee under the July AGM motion is now gone ). Others have said that rating fees are a more acceptable way for CFC to raise revenue than high annual memberships. Others have seen the devestation of chess in Canada if tournament memberships are eliminated. Will this interest in CFC Fees be tapped by the Governors?

The Grassroots' Campaign, in sofaras it has dealt with CFC fees, wishes to make the following submissions to the review, if possible:

1. that the tournament playing fee ( “ tournament membership ) be eliminated;

2. that there be instituted a 40% discount on annual membership for first time CFC ‘ers;

3. that if CFC Junior rating fees are raised, they not go beyond a 100% increase ( that is, from $ 0.50 to $ 1 );

4. that in general, CFC Annual Membership fees be reduced, and rating fees raised ( this arises out of our original restructuring platform position that if finances supported it, we would seek reductions in annual membership and/or rating fees ). Given CFC finances currently, it would seem that the CFC cannot afford to lose revenue on fee changes, so the reduction of any annual fees must be at least offset by raises in the rating fees( a revenue neutral change ).

Will the Grassroots' Campaign be allowed to make these submissions within the context of whatever " Review " the CFC carries out?

Will this review be done in a timely manner, early in the new year?

A few issues and questions that now arise in the light of the passing of motion 2009-06 - they require answers.

Bob

[Ken Craft]

Re: CFC Fees Review

When I started playing CFC tournaments in mid-1970s, juniors paid the same rating fee as adults regardless of the composition of the tournament.

[Bob Armstrong]

Re: CFC Fees Review

Hi Ken:

But wasn't the " junior rating fee " introduced to encourage organizers to hold more " junior only " tournaments - since they had to pay lower rating fees for the juniors , than if the juniors were in a mixed adult/junior tournament?

Isn't this a good thing? There are now lots of " junior-only " tournaments.

Bob

[Ken Craft]

Re: CFC Fees Review

The real issue is the need for real cooperation between the CMA and CFC around junior chess. This regime like past regimes does not seem to want to do this.

[Larry Bevand]

Re: CFC Fees Review

Hi Ken:

But wasn't the " junior rating fee " introduced to encourage organizers to hold more " junior only " tournaments - since they had to pay lower rating fees for the juniors , than if the juniors were in a mixed adult/junior tournament?

Isn't this a good thing? There are now lots of " junior-only " tournaments.

Bob

Hi Bob,

The junior rating fee was introduced to compete with the CMA rating fee. The CMA was offering ratings for youngsters at a reasonable price and the CFC wanted to compete in that market. Hence they cut their rating fees.

A simple business decision.

In the same way, that if the CFC felt another body was offering a National rating system at a lower price, they would feel the need to lower their rates. What one charges for rating an event is not related to the costs involved in doing so.

I have noted over the many years I have been involved in chess....that no matter how much the CFC screws up...the majority of Canadian players want it to succeed (including myself) and are willing to overlook things....

Larry

[Bob Armstrong]

Annual Membership or Rating Fee - Where Should CFC Revenue Come From?

One of the live issues, raised by the July 2008 AGM motion on CFC Fees ( now rescinded by Motion 2009-06, passed November 8 ), was the concept of CFC shifting the raising of general revenue from annual membership fees to rating fees. The July AGM motion had sought to do this. It lowered the annual membership fees ( adult - to $ 30 from $ 36; junior - to $ 20 from $ 24 ), but raised rating fees ( adult - $ 5 from $ 3; junior - $ 5 from $ 0.50 ). The Governors have now rescinded this, but are they in favour of the concept of shifting revenue raising toward rating fees? After all, there has been a lot of member criticism of the cost of annual memberships, especially after the print Chess Canada magazine for members got axed.

Reviewing the CFC 2007-8 finances is instructive in this regard. In CFC’s 2007-8 financial year, CFC took in from rating fees approx. $ 25,000. It was originally proposed by the Grassroots’ campaign that this be doubled to $ 50,000 [ adult rating fee would go to $ 6/ player/ event ( from $ 3 ); Junior rating fee would go to $ 1 ( from $0.50 ) ]. This was to shift CFC’s general revenue burden from membership to rating fees, as a more acceptable way to get general revenue – basically, a more “ user-pay “ system. This would give CFC an extra $ 25,000 revenue.

In the same year, CFC took in approx. $ 50,000 from membership fees of all kinds. With the extra $ 25,000 from increased rating fees, CFC would now have to raise only $ 25,000 from membership fees, or a reduction of 50 %. This meant annual membership fees could be decreased by 50% [ annual adult membership could go to $ 18 ( from $ 36 ) and annual junior membership could go to $ 12 ( from $ 24 ) ].

What happened at the Incoming Governors AGM in July, was that the annual adult membership was reduced, but only to $ 30 and the annual junior membership to only $ 20. However, the rating fees increase was greater than the membership decrease. This way, the AGM governors " increased " the overall revenue with these changes, which they thought was justified by the poor financial situation of the CFC. The Grassroots' proposal, on the other hand, was " revenue neutral " ( what was gained by the rating fee increase, was lost by the membership reduction ) .

It will be up to the governors in the full review to choose between these 2 models ( assuming they accept the general premise of shifting revenue from membership toward rating fee ). Can they live with a " revenue neutral " fees change in tough economic times, or do they feel they have to raise more money for CFC in making these changes?

And what are the arguments against raising rating fees?

What do you think the governors should do?

Bob

[Aris Marghetis]

Re: CFC Fees Review

When I started playing CFC tournaments in mid-1970s, juniors paid the same rating fee as adults regardless of the composition of the tournament.

In case anyone is interested in what I think, as an Organizer/TD, I support having the same fees (whatever they end up being) regardless of age, gender, whatever. This is not just a philosophical stand. More pragmatically, it is also so that when I am acting as an Organizer/TD, stuff runs more efficiently if all numbers are the same for everyone.

This applies ESPECIALLY to any proposed first-year membership discount. I really don't want to be trying to figure out onsite whether someone really qualifies for a first-year membership discount or not. If tournament memberships are no longer available, you can bet that inactive players will feel right in trying to take advantage of such a discount.

Therefore, I am against any discounts of any kind, and as I have indicated before, I am also against eliminating tournament memberships, as that would drop my numbers by between 10% and 15%. In the current chess climate, why would we want to risk that?

Best regards, Aris Marghetis, Organizer/TD in the Ottawa(ONT)-Gatineau(QUE) area.

[Bob Armstrong]

Re: CFC Fees Review

Hi Aris:

1. 40% discount for first time CFC'ers -

For players who are playing in their first serious rated tournament, the registration fee may be seen as high. When they are advised of the added cost of the CFC/Provincial membership fees as well, they may balk. The discount is specifically to entice them into becoming CFC members and playing. I agree that it makes organizing somewhat less efficient, but this may be necessary if we are to attract NEW players. Former CFC members, who have been inactive, will not qualify for this discount. Do organizers normally NOT have access to the CFC website when registering players, so they can immediately see whether someone qualified for the discount? I would think that would not be too hard as a part of registration for those requesting the discount.

2. Tournament Playing ( " Membership " ) Fee Elimination -

I can see that certain players might refuse to play if asked to take out an annual CFC membership ( despite the fact that members are paying to run the CFC ). But maybe you overestimate your losses. I believe that some current tournament membership players will agree to take out annual memberships when faced with it, because they want to play competitive chess, and want a national rating. The drop in players may be less than projected by some. I agree that any drop is unfortunate, but it is also important that one type of membership ( annual [ paying $ 36 ] /life ) not subsidize another type ( " tournament membership " [ paying $ 10 ] ). There should be a level playing field as to paying to run the CFC.

Bob

[Kerry Liles]

Re: CFC Fees Review

In case anyone is interested in what I think, as an Organizer/TD, I support having the same fees (whatever they end up being) regardless of age, gender, whatever. This is not just a philosophical stand. More pragmatically, it is also so that when I am acting as an Organizer/TD, stuff runs more efficiently if all numbers are the same for everyone.

This applies ESPECIALLY to any proposed first-year membership discount. I really don't want to be trying to figure out onsite whether someone really qualifies for a first-year membership discount or not. If tournament memberships are no longer available, you can bet that inactive players will feel right in trying to take advantage of such a discount.

Therefore, I am against any discounts of any kind, and as I have indicated before, I am also against eliminating tournament memberships, as that would drop my numbers by between 10% and 15%. In the current chess climate, why would we want to risk that?

Best regards, Aris Marghetis, Organizer/TD in the Ottawa(ONT)-Gatineau(QUE) area.

I agree with what Aris has written, and I would like to add that I favour a relatively low, across-the-board fee for CFC membership (I would be willing to consider 2 tiers: Junior and Adult). For example: $25/year - BUT this includes rating fees period... no more nickel and dime hassle for tournament ratings... You don't get a lot for the fee - if the online magazine takes off the fee could be marginally increased (say an extra $5/year).

Tournament memberships could be $10 with no benefits attached; if you play less than 3 events a year, I suppose the tournament membership is the way to go... whatever.

I would also like to see the kickback to the provincial associations be normalized across the country: no more bizarre fee structure based on geography... Provincial affiliates/associations would get about $3/member based on the amounts above ($0 for tournament memberships).

So, overall:

Adult $25/year ($3 to province of residence)
Junior $15/year ($1.50 to province)
Tournament $10/pop ($0 to province)

Ratings included!!

After online magazine presence and content is up to snuff, add $5 to adult, $3 to Junior.

No more LIFE memberships; FIDE fees paid by individuals not CFC;
Honourary membership to IM and up (? an idea to promote participation?)

Numbers subject to tweaking perhaps, but not up by much if at all!

[Kerry Liles]

Footnote

I haven't seen the latest financials nor GL#3 yet, so this is all based on wishful thinking... perhaps we cannot afford this plan, but I like the simplicity of the fee structure. No more 'family' or 'multiple sibling' discounts or whatever else we have on the go at the moment... too complicated for no good reason.

[Bob Armstrong]

Re: CFC Fees Review - Lowering without Raising

Hi Kerry:

I think there are some severe money problems with your proposals.

Based on the 2007-8 financials ( to the best of my calculations ):

1. dropping the adult annual membership fee from $ 36 down to $ 22, and junior from $ 24 to $ 13.50, will lose at least $ 19,500 revenue;

2. eliminating the rating fees will lose $ 25,000.

3. Total lost revenue in the first year = $ 44,500.

CFC has had 3 consecutive years of significant deficits ( last year - $ 33,000 ). Your one year drop in CFC revenue is bigger than last year's loss.

You either have to come up with a new source of revenue, or you have to slash expenses ( like severely ) to balance the books.

A problem.

Bob

[Kerry Liles]

Re: CFC Fees Review - Lowering without Raising

Hi Kerry:

I think there are some severe money problems with your proposals.

Based on the 2007-8 financials ( to the best of my calculations ):

1. dropping the adult annual membership fee from $ 36 down to $ 22, and junior from $ 24 to $ 13.50, will lose at least $ 19,500 revenue;

2. eliminating the rating fees will lose $ 25,000.

3. Total lost revenue in the first year = $ 44,500.

CFC has had 3 consecutive years of significant deficits ( last year - $ 33,000 ). Your one year drop in CFC revenue is bigger than last year's loss.

You either have to come up with a new source of revenue, or you have to slash expenses ( like severely ) to balance the books.

A problem.

Bob

Yes, there is a shortfall of course. I think the lower fees and the elimination of the rating fees will result in higher membership renewals and possibly new memberships. We all know the production of ratings doesn't require the fee structure there is now. With the sale of the office we can adopt Gary Ruben's model of administration being done from wherever there is an internet connection etc.

I don't see a lot of people renewing at the current rate - I know the only reason I renewed was because I am a Governor and I want to support the CFC's recovery...

I'll wait to see the current financial statements and then perhaps revisit the numbers, but something has to be done to jump start the renewal of the CFC.

[Aris Marghetis]

Re: CFC Fees Review

Hi Aris:

1. 40% discount for first time CFC'ers -

For players who are playing in their first serious rated tournament, the registration fee may be seen as high. When they are advised of the added cost of the CFC/Provincial membership fees as well, they may balk. The discount is specifically to entice them into becoming CFC members and playing. I agree that it makes organizing somewhat less efficient, but this may be necessary if we are to attract NEW players. Former CFC members, who have been inactive, will not qualify for this discount. Do organizers normally NOT have access to the CFC website when registering players, so they can immediately see whether someone qualified for the discount? I would think that would not be too hard as a part of registration for those requesting the discount.

2. Tournament Playing ( " Membership " ) Fee Elimination -

I can see that certain players might refuse to play if asked to take out an annual CFC membership ( despite the fact that members are paying to run the CFC ). But maybe you overestimate your losses. I believe that some current tournament membership players will agree to take out annual memberships when faced with it, because they want to play competitive chess, and want a national rating. The drop in players may be less than projected by some. I agree that any drop is unfortunate, but it is also important that one type of membership ( annual [ paying $ 36 ] /life ) not subsidize another type ( " tournament membership " [ paying $ 10 ] ). There should be a level playing field as to paying to run the CFC.

Bob

Hi Bob, I don't want to go round and round on this, so I need you to accept that what I'm writing here is my experience. You might disagree, but these are my actual observations.

1) the first-timer membership fee
This is not necessary if you still have a tournament membership available. And the latter would be so much easier to administer. You might not think the first-timer discount "would not be too hard", but it will not be easier! Who wants to be "carding" returning members?

2) the tournament membership fee
I am not exaggerating. At my last weekend event, 8 of the 65 players were willing to play ONLY if they could pay the tournament membership. I based my numbers on historicals, and I was there, and sure that NONE of those players would consider full membership!

One more thing. Ever since I have been Organizing/TDing more, and especially since the election of our current executive, I have been hearing that we need to listen more to Organizers/TDs, that we are the backbone of OTB chess, that we are important to bringing Canadian chess back from the brink. However, many times when I express an opinion that is different from someone's analytical conclusion, I receive feedback that I must be mistaken, that I am exaggerating, or some other judgment of my actual observations.

I just don't get that. As an Organizer/TD who works his ass off to get more and varied players to a second-tier population region, including a big yet largely untapped FQE market, I need the tournament membership option. As an Organizer/TD who works his ass off to ensure that the first round always starts on time, I need as few membership discounts as possible, and I suspect the first-timer option will be the worst for my onsite effectiveness.

I don't know what else to say. I'll cast my Governor votes, and respect the majority results.

Best regards.

[Ken Craft]

Re: CFC Fees Review

Kerry Liles wrote: I would also like to see the kickback to the provincial associations be normalized across the country: no more bizarre fee structure based on geography... Provincial affiliates/associations would get about $3/member based on the amounts above ($0 for tournament memberships).


Provinces don't receive kickbacks, Kerry. Provincial Federation's set their own membership fees. These fees are collected together and remitted to the CFC. The CFC rebates the provincial portion back to provincial federations on a regular basis.

I believe BC has decoupled its provincial fee and has decided to charge a per event fee rather than a per year fee for its members.

[Brian Raymer]

Re: CFC Fees Review

I agree with Aris. The tournament membership is necessary to ensure participation of those not willing to join the CFC. No tournament membership = less participation. Membership fees should be designed to encourage participation and bring in a reasonable amount of money. The annual membership should be encouraged, not imposed.