US Chess Discussion

Welcome! This blog has no connection with the USCF. It's a blog where I provide chess fans with general information about US Chess as well as the USCF. It's also a site where everyone can productively discuss or ask questions about various USCF issues! Your contributions and comments are welcome! PLEASE KEEP IT CIVIL & RESPECT OTHERS! Enjoy! All posts that do not meet this guideline will be deleted -- WIN WITH GRACE, LOSE WITH DIGNITY!(TM) --- 2006 Susan PolgarĀ©

Tuesday, May 06, 2008

The financial crisis finally hits home


Bill Goichberg just sent the following:

A NEW PLAN FOR USCF

USCF has struggled financially in the 2008 fiscal year, mainly due a substantial decrease in membership revenue. Adult membership, which declined on the average by about 1000 members per year in 1995-2006 (except by 3000 members in 2003 after the dues raise), has apparently relapsed to losing about 1000 members again in the fiscal year that will end May 31. We cannot continue simply hoping for things to turn around, but must take action.

Adult memberships have been contributing an average of about $24 each toward our fixed overhead, and attempts to increase this net by raising dues have failed. The various junior classes contribute only about $9 to $9.50 toward fixed overhead per member. Fortunately, we are able to increase the net towards fixed overhead from all members while at the same time lowering the fee that most of them must pay for annual memberships to play in rated tournaments.

The internet has been the root cause of our problems, hurting chess clubs and making our magazine less valuable as a news source, but we can also use the internet to help solve our problems, and we must do so.

Following are some possibilities Bill Hall and I have been discussing. Not counting fixed expenses, it currently costs us about $15 per year to print and mail 12 issues of Chess Life, and probably about $4.50 per year for 6 issues of Chess Life for Kids. The $13 per member we can save on those who choose the bulletin plus online Chess Life option is the major factor that enables this plan to turn USCF finances around. My estimate is that its effect will be to improve the Federation's net income by about $200,000 per year, though we won't see the full benefit in the first fiscal year starting 6/1/08, as much of it can't be implemented until midway through that year.

1) Originate a quarterly bulletin so we can offer a reduced dues option for several classes of membership while maintaining contact with these members. This would be a low cost publication, probably with TLAs and a few annotated games and costing USCF about $2 per year. It would be intended largely to remind members about chess and the availability of their online publication.

If we are provided with an email address we can send emails as well with links to the online magazine, but some players will just pay the cheapest rate without being online much if at all, while others may not notice the chess emails among all their spam. "Economy Adult" and "Economy Scholastic" memberships have not been successful in recent years, but with online magazines, and emails and quarterly bulletins to remind members about them, we expect more interest and a greater renewal rate than we had with the economy memberships.

2) Young Adult memberships for 25/below at expiration. Now $25 with $2 affiliate commission and receiving monthly Chess Life. Suggest replacing with two new options:Youth membership, with monthly online Chess Life and quarterly bulletin. 1 year $22, 2 years $39, 3 years $55, each with $3 commission.

Premium Youth membership, with hard copy Chess Life. 1 year $32, 2 years $59, 3 years $85, each with $3 commission.3) Youth memberships for 16/below at expiration. Now $19 with $2 affiliate commission and receiving bimonthly Chess Life. Suggest merging this class with Young Adult into the new Youth classes.

4) Scholastic memberships for 13/below at expiration. Now $17 with $2 affiliate commission and receiving bimonthly Chess Life for Kids. Suggest replacing with two new options:

Scholastic membership, with monthly Chess Life for Kids online and quarterly bulletin. 1 year $16, 2 years $27, 3 years $37, each with $3 commission.

Premium Scholastic membership, with bimonthly Chess Life for Kids. 1 year $23, 2 years $41, 3 years $58, each with $3 commission.

5) Regular memberships. Now $41 online, $49 by mail or phone with monthly Chess Life. $4 affiliate commission on mail or phone memberships, no commission for those paid online, but affiliates can sell these at clubs or tournaments for $49 and submit payment to USCF online, in effect creating an $8 commission.

As most adults and seniors (unlike juniors) come in directly rather than through affiliates, an online discount as we have now for the dues sale works better than an affiliate commission, as it allows direct marketing of the lower rate in Chess Life and renewal mailings. Suggested rates:

Regular membership, with monthly online Chess Life and quarterly bulletin: Paid online: 1 year $29, 2 years $52, 3 years $74.Paid by mail or phone: all $7 more.

Premium membership, with monthly hard copy Chess Life. Paid online, 1 year $42, 2 years $78, 3 years $113.Paid by mail or phone: all $7 more.

6) Senior memberships. Now $36 with a $2 commission and monthly Chess Life. This small but growing category has high interest in the hard copy magazine and a separate rate without it doesn't seem necessary; they can pay the $29 regular rate. Suggested rates:
Senior membership, with monthly hard copy Chess Life.Paid online, 1 year $36, 2 years $65, 3 years $93.Paid by mail or phone: all $7 more.

7) Other categories.

Raise Family type 2 from $35 to $45. Raise Prison and Blind from $12 to $18. Sustaining should be abolished. We might end the selling of new Life memberships too, and offer a 10 year membership instead for Regular $220, Premium $310, with its deferred revenue going to the LMA. The Premium 10 year membership would include a USCF option to give a proportionate refund of the balance in the event that Chess Life becomes an internet only publication.

8) Membership cards.

These cost us about 50 cents each to distribute, and many players don't carry them. We should save this money by allowing members who want a card to print one out online, and mail cards only on request (probably few will ask for them).

9) Rating service.

For a rating fee of $2 per player, maximum 6 games, we can rate scholastic tournaments for under 1000 or unrated in our quick chess system without the usual membership requirement. I don't think this would work for regular ratings as we would lose too many full members, but there is much less interest in quick chess. We would encourage (but not require) affiliates to send us player email addresses, and could send the players member and tournament info and a password to read a magazine free online, maybe for two months.

There is hardly any interest in quick ratings in the scholastic community now, so this experiment seems worth a try. It will appeal only to those running events with many non-members, as with enough members, paying the rating fee will cost less.

Such events could also be held online. Online events can currently be rated in the quick chess system without a TD present.

10) Regular rated online play.

ICC leaders told me years ago there was a big market for this; we need to announce rules and encourage not only membership required events held by ICC and other services, but also by affiliates using these services. Especially, there is potential in matches or leagues involving chess clubs or schools.

The big problem is the perception of cheating, and a lesser but significant problem is actual cheating. Our scholastic leaders are strongly opposed to allowing internet play to influence World Youth invitations and the like, but that can't be allowed to prevent adult amateurs from playing for regular ratings online with a TD present. I suggest the following requirements for regular rated online play:

A. Limited to players over age 18 rated under 2000, and under 18 rated under 1000. The USCF office has the right to approve exceptions.

B. Must be at least four players on each side (usually a team event but could be part of some sort of large individual tournament).

C. A certified TD must be present at each end, who is not part of the immediate family of any player.

D. An additional witness is also required, not part of the immediate family of any player.

E. There should be an overall Director available by phone in case of dispute, at least a Senior TD.

F. For over 1000 play, the event must be open to the public and be announced at least two weeks in advance in either uschess.org or Chess Life. An online TLA would be acceptable; if the event is not suitable for a TLA because it's not seeking players, there could be a special page for online events open to spectators.

Bill Goichberg
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