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TWHBEA Discusses Budget Concerns




 
by Linda Scrivner

 

            Charles Wharton began the meeting with the statement that the financial condition of the TWHBEA was not good and that revenues were off $1,000,000. Wharton thanked Chuck Cadle and Kristi Lane for their assistance this year. He stated, “It’s been a difficult year and Chuck has voluntarily taken a look at the situation and said that TWHBEA can’t afford him with the present condition.”

            Cadle then spoke and said that it had been a difficult year and he’d like to discuss the root cause. He had that for the last three years the association has never had $5,000,000 to operate on and yet 2007’s budget was set at $5,200,000. When the budget was made, they didn’t address the declining economy and declining revenue. “It was a spend-first, collect-later strategy. We jumped into programs that we could not back out of.” He stated that they were $988,000 off the projected revenue and they couldn’t do more cutting because of the programs.

            He said that all possible cuts had been made. He said they were going into the year with 14 staff members doing what 29 had been doing. He said that Nancy Lynn Green had organized the staff and things were going very well. Cadle concluded, “We now have the accounts reconciled and we’re going into next year with our eyes open.”

            Kristi Lane opened her presentation with slides and opened with, “This is the fiscal program we looked at 40 days ago and Charles Wharton challenged me with ‘Get it right, get it right’ and we now have the projected budged. Salaries had been adjusted because of the staff reductions. Lane said that these slides were the worse case scenario and that anything better than this is gravy on top. 

            The first slide showed the Breeding Report vs. Registrations for 1999 through 2007. In 2005 there were 27,031 mares on the stallion report with 13,341 2006 registrations, which represented 49.4%. In 2006 there were 23,569 mares on the reports with 9,300 2007 registrations at 39.5%. In 2007 there were 15,567 mares on the report with projected registrations at 7784 in 2008, a 50% projection. This is a total decrease of 16.3%. The problems causing this were debated by those present and the presentation went on.

             One of the slides showed 2008 financials based on projected revenues, current staff, Voice and program spending with a base line to the total loss in 2008 without changes of $1,073,683.

            The Voice Magazine was discussed at length and the true loss of the magazine, according to one of the slides, was $296,348 in 2007. Voice recommendations to compensate for this were to reduce expenses by transitioning from 11 magazines plus one Sire Summary (total 12) to reduce it to six magazines and four special editions (total 10). The new format will be a bi-monthly membership magazine with significantly improved features about performance, breeding and mare care, reining, plantation, practical horse care and much more. There would also be four coffee table Special Editions: the Sire Summary, Pre-Season, Pre-Celebration and Year End highlights. The Voice financial projections for the special editions was be a gain of $73,000.

            A slide showing registry assumptions with improvements that excludes Voice Magazine and programs showed the projected income before programs to be $133,767.

            At one point committee member Mike Inman asked if there was a budget, not just a proposed one since the national board would be voting on the 2008 budget tomorrow. He was expecting to see a finished budget. Lane explained that this was what was available now.

            The slides continued and one contained the Tennessee Walking Horse Industry issues. These were: This industry is not growing much to introduce new customers to the walking horse market. (Best of America By Horseback was a long-term brand building strategy that TWHBEA cannot sustain). Without a national and international show circuit, registrations and transfers are and will probably continue to fall year after year for the Tennessee Walking Horses. There are too many “gaited competing breeds that are capturing walking horse registrations and thus marketshare (i.e. NWHA, United Mountain Horse, Rocky Mountain Horse, Kentucky Mountain Horse, Spotted Saddle Horse, Heritage Horse, etc.) TWHBEA does not have the ability to get corporate sponsors because of the lack of a solid, consistent show circuit and negative publicity. In the pleasure/versatility segment of the business we are not providing incentives to our horse to excel in any particular discipline thus we are unable to compete in the open market. According to Lane, customers of Tennessee Walking Horses for the trails are not seeing the need to have registered or properly transferred horses and the registry lacks the ability to execute short-term or long-term strategies for the industry due to fragmentations in the marketplace.

            The financials summary stated that we need to be: Developing a show circuit in 2008 will afford the opportunity to meet with corporate sponsors to generate funding for the 2009 fiscal year such as John Deere, Ford Motor Company or General Motors, Wrangler Jeans, Purina, Millworks, Tucker Saddle and National Bridle Shop, Developing a show circuit in 2008 will build a platform for continued expansion in 2009 and beyond, developing a show circuit will fuel registrations, transfers and membership in the long-term, with the breed registry building a solid show circuit it will begin to minimize the fragmentation that exists in the TWH industry in 2009 and beyond, With a significant portion of the TWHs going to the trails, the TWHBEA  must focus resources to develop this consumer into a member, interest in the TWH must be generated at the local, state level and the TWHBEA must support the state associations through trail ride initiatives, The Voice magazine should become a membership focused magaxzine as opposed to an “advertising” editorial. Risk associated with publication must be minimized. Conclusion of the NWHA lawsuit is important.

            One slide summarized: How Do We Ensure Longevity of the TWH. It stated that we should build a solid show circuit nationally and internationally and simultaneously focus on the trails and the trails consumer.

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