Questions are inevitable part of National’s bankruptcy issue

Two things are certain about the National Sports Collectors Convention. For one, the National is home each year to the most dazzling array of sports collectibles you’ll find at any one time. Second, there will always be people who have complaints with the way the National is run.

It’s a given that you can’t please everyone when running a show, especially one as large as the National. But one would have to assume there will be more criticism lobbed in the direction of the National this year in light of details that emerged during the National’s bankruptcy proceedings relating to the show’s financial dealings.

The issue that could raise the most controversy is the NSCC’s management deal with Sports Marketing Inc. (SMI). SMI is the company that oversees all operations involved with the show, from lining up corporate sponsors to negotiating contracts with convention centers and hotels, handling exhibitor contracts and more.

In exchange for these services, the three people who do this work for SMI divide up $225,000 each year, plus compensation for all expenses, plus all profits generated by the show.

I don’t feel comfortable telling people what is or isn’t an appropriate level of compensation, and I know the people at SMI are very dedicated to the National’s success. That said, the terms of this deal are likely to raise some questions among NSCC board members and table holders.

First and foremost, what is the logic behind giving all of the show’s profits to SMI? Are they really receiving the profits, or is this simply a bookkeeping technique to protect the National’s non-profit status?

If SMI is actually receiving the profits, the NSCC board will likely be asked for the reasoning behind that decision. Obviously, the show needs to be profitable to survive, but why give the profits away? I’m sure most tableholders would like to see that money reinvested into the show to keep costs down for exhibitors and attendees, or even underwrite expansion into new markets. While show management should reap some of the rewards for a successful show, do they deserve all of the benefits?

The terms of the National’s contract with SMI might also be questioned in the context of the cities nominated to host National Conventions in recent years. For instance, the National had never been held in Cleveland prior to the 1997 show (the first after the National sold management rights to the show). Since then, the show returned to Cleveland three times and will go back there in 2009. That’s five Nationals in 13 years for Cleveland (although SMI has not been the show manager each of those years).

Meanwhile, the National has never returned to cities such as St. Louis, San Francisco or Dallas – all of which hosted successful shows in the past – and has never been to an East Coast location outside of New Jersey. The main reason cited for not going to those cities has been the costs affiliated with doing business in some of those locations.

That might very well be the reason, but the question that could now arise is whether Cleveland is floated in front of the dealers as a possible location because it’s such a hotbed for collectibles or because it offers the best profit margins.

That’s a legitimate question, and one that doesn’t automatically imply something is amiss. The fact of the matter is, whenever a company, organization or individual files for bankruptcy, their financial history is likely to be questioned. The National won’t be
immune from those questions.
– Scott Kelnhofer

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