THB Headline: Academy Membership Event 2 - Unanswered Questions

Given that Pete Hammond was clearly given access to the slideshow for the Academy Membership meeting before Academy members saw it (the 10:30am time stamp for an event that ended at 10am kinda makes anything else impossible), I don’t feel bad in any way for getting into the meeting in some depth.

And I shall (in Part 3)…

But let me start with a baseline and the big questions, most of which were referenced in the meeting, but which were given To Be Announced answers this morning.

Working backwards from the percentages offered this morning, Academy annual revenues were about between $150 million and $160 million last year. ($450 per member x 10669 members = $4.8 million. The Academy says that membership dues are 3% of the annual revenue, aka $159.8 million total revenue.)

1. Why does The Academy have an $68 million a year administrative/personnel budget?

This was not even brought up… but it does boggle the mind. I don’t know what ABC ended up paying The Academy for the Oscars this year, but according to The Academy’s napkin math, it was likely $120 million last year. Academy CEO Bill Kramer laid out expenditures for the organization and 43% was for personnel and administrative costs, with over 450 employees according to the Academy website. That’s more than 1 Academy employee for every 25 worldwide members.

As a result, even as the new administration is searching for a more balanced revenue stream, the TV show - Oscar - is still a dangerous addiction for AMPAS.

The Academy numbers suggest that The Museum generated $43 million in revenue last year. I’m not completely sure what that figure represents, but the Museum retail store and ongoing fundraising were highlighted.

If The Academy has a purpose, it’s in Programs & Operations and Museum Operations. They moneys spent by the 2 line items combined last year were about $48 million.

So what do you do with a business that has staff costs of 43% more each year than the money spent on its core mission?

I don’t have an answer, as 50% - 60% of revenues spent on staff is not, it seems, all that unusual amongst not-for-profits.

The Academy is unusual in that it is so singularly focused on Oscar as a revenue stream. The show is paid for separate from salaries, to the tune of $43 million in and of itself.

So one has to seriously consider whether the tail wags the dog.

The Academy got lucky and their stock portfolio exploded in the good way a few years ago. They had over $100 million in value on stock. That seems to be down to $650 million. But it still creates safe space for the organization… as long as the next Oscar show deal doesn’t take a giant step back.

2. Why has The Academy raised dues on membership when they are an invitation-only organization?

Member dues were noted as 3% of revenue last year or about $4.8 million a year.

Why?

Yes, the $450 a year means almost nothing to much of the membership. But if the organization has $68 million to spend on salaries and administration and are looking to the membership to generously donate as well, why pick the pockets of membership for $450 a member each year?

If any dues are necessary, at $100 a member annually, the organization would still generate over $1 million a year and leave members more inclined to give to their organization with an open heart than feeling like they already paid at the office.

For still-actively employed members, the $450 can be written off as a business expense and never even noticed. (This is true of newsletters like this one as well… hint, hint.) For those less active, the write-off is likely of less value.

Of course, one of the rarely discussed biases of The Academy since 2016 has been against aging members. It would be grotesque to call the membership fees a poll tax. The Academy is not a government trying to shut out an unwanted group.

But again… $68 million in salaries. This is a financially successful not-for-profit and increasing expenses for membership while paying out this much on salaries seems misguided. Who is The Academy? The Members or The Staff?

3. The new hires for the Oscar shows are, wonderfully, experienced TV people. But once again, Academy leadership, where’s the beef?!?!