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Where Do we Find Growth? - Financial Assessment and Models
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Full Disclosure – I am a bridge player and volunteer.  I have never owned a club nor directed a bridge game.  I write, blog here, and volunteer on my Unit 124 Board (Vice President) and District 11 Board, and am 2nd alternate to the Board of Directors for District 11, allowing me to serve on the Board of Governors.  I chair the Teachers and Club Managers Committee for the Board of governors.  I am also editor for the Unit 124 ALERT e-magazine quarterly, and am webmaster for Unit 124 and D11.  I receive 52 free plays from Unit 124 annually for my Editor role.  I never use them all.  I receive no other compensation and attend all Board of Governor’s meeting on my own dime, as others do. Please see my profile on Bridge Winners.   I hold two engineering degrees and an MBA in Marketing and Finance.  I am retired R&D/QAfrom Procter & Gamble after 41 years and 7 months service. These viewpoints are mine and mine alone - they do not reflect the opinion of any organization that I serve.  

Just Show Me the Money

We need to have a common understanding what growth looks like, feels like, and what it can never be. 

I continue to be amazed about how everyone sees finances in the ecosystem that is the ACBL. 

Have you ever read the children’s book The Seven Blind Mice”?  Each mouse encounter’s their own monster – It’s a giant snake! It’s a tremendous tree! A hairy rope! A leather kite!  Everyone knows their own personal experience and no one takes the time to compare notes – to see the whole picture.  They were touching an elephant for the first time.  We have an elephant in the ACBL.  No one knows with certainty the cash flows among teachers, clubs, Units, Districts, and the ACBL itself.  Non-profits are required to submit a form 990 to the IRS.  In Ohio they are required to provide detailed financials to any member of the public.  Don’t you think its about time we try to get a clear picture of what’s really happening? 

I do.

However, to span the knowledge vacuum we face we have to assess, interpolate, and model certain information consistent with published fact.  I will do that, open to your own sensitivity analysis.  You might not agree, but the order of magnitude we discuss will be about right.  

ACBL Financials

Let’s start with the ACBL.  The ACBL turns $18MM per year, and is roughly a breakeven proposition.  It spends $1.4MM on marketing and promotion (NABCs, Website, Bulletin, Longest Day, etc).  That’s $8.48 per member and $128 per new member.

The 2017 ACBL financials are available at:

Looking at the Balance sheet The ACBL has $9MM in liquid assets.


Cash                                          $1.73MM

Investments                                 7.12MM

Account Receivables – Net              0.53MM

Dues from Affiliates                            +

Prepaid Expenses                           0.47MM

Other                                                 -

TOTAL                                          $9.85MM


So you might see $9+MM and say, why doesn’t the ACBL spend that money on advertising and promotion?  Well, “that money” is accounted for elsewhere:


Accounts Payable                             -

Accrued Payroll                               $0.67MM

Accrued Expenses                             0.76MM

Capital Lease                                     -

Accrued Insurance – Retirees            0.12MM

Unredeemed Bridge Bucks                0.10MM

Deferred Membership Revenue         4.10MM

Deferred Revenue                            0.24MM

Unit Dues Payable                            0.52MM

Dues to Affiliates                              0.24MM


The Difference $9.85 minus $6.75 is $3.1MM, the cash balance.  This is barely 17% of one year’s expenses ($3/$18) and only two years’ worth of marketing expense ($3/$2.8).  Like it or not, there’s no meat nor fat on this bone. 

Do you really think that $3.1 MM is a war chest that can sustain an impactful advertising campaign across Canada, USA, and Mexico?  (Think ~484MM people). 

Advertising Costs /What Works?

In the USA alone, we expect the following costs for TV, Newspaper and Magazine advertising:

TV                    Up to $8MM set -up and $342K per 30 second ad

                        (per channel, per instance, etc).

Magazine           Up to $0.4MM set-up and $250K per (full Page) ad

                         per magazine. Each reaches up to 3-5 MM people. 

                        How many magazines do we need?

Newspaper        Up to $1.4MM set-up and $113 per ad per instance

                        per newspaper.  With 50 major markets, it gets

                        expensive quickly.  

Direct Mail and telemarketing are even more costly. 

Folks, the truth is, even with everyone’s income accounted for (ACBL, Districts, Units, Clubs, Teachers) we don’t command enough earnings to afford a standard ad campaign in the $10sMM or $100s MM such an effort would require. 

We have data that says: Clubs and Work of mouth are the sources of the overwhelming majority of new player referrals.  Teachers less so.  Ads are nonexistent.  Unfortunately we convert less than 10% of the first contacts. 

Asking the ACBL to disgorge its cash turns a needed balance sheet asset into a one time cash source. Turning balance sheet assets into yearly spending is beyond wrong-headed, it ignores what successful advertising requires. Ads have to reach the target audience without waste. The audience need to experience the ad 4-8 or more times before the intended action occurs. The intended action must be within reach of the customer and must be of sufficient quality to deliver on the promise of the ad. There can be no empty shelves when the new customer goes to the store to buy. Finally, the product or experience advertised must provide an experience that keeps the customer coming back. Do we have that in place throughout the zone now? Really??? All of this makes advertising a long-term market development expense. An expense means they money to pay for it must be available year on year. How many years? Not less than 5. One Super Bowl ad does not a campaign make.

Data and subjective experience suggests ads in newspapers magazines and tv are less likely to reach new members than word of mouth. Club contacts and word of mouth are the lion’s share of new contacts. They are not recorded so they get no structured follow up. The customer experience is not assessed (no data, no post experience questionnaire) so no continual improvement plan gets developed. We convert less than 10% of our initial contacts because there is no formal lifecycle management process and no sense of shared responsibility. (That new customer is MINE. What would be different were s/he OURS?). On line ads hold some promise. They work differently. They are data driven and they appeal to a web savvy demographic. 

Anyone can make a video ad for their bridge club or bridge class and post it to You Tube. They are free (use your iPhone and edit on available video software). How many ads do you see there? Are there any good ones? There are over 2800 clubs. How many You Tube ads should we expect online?? Thought so. 

Units, Districts and Clubs – Margins and Earnings Estimates

Units and Districts are non profit. Cash accounts exist for risk mitigation reasons. Liquidating them works one time for one year. The number of tables in clubs is triple the number of tables in tournaments. Club table counts are declining 2%. Tournaments 5-15%. What’s wrong with this picture?

Clubs have business independence, pricing authority, operation control, and jurisdiction on disciplinary matters. Club owner margins are already far greater than the sanction fee they pay. On a $7 entry fee in Cincinnati, $0.25 goes to the ACBL and 3.75 to rent (space and ALL equipment needed to run a modern game included), netting $3 per person for profit (and snack costs). Tell me please where the margin is. Our teachers spend on promoting their games to existing players, not on recruiting. Why? They want immediate return.

Tournaments (Units and Districts) have higher margins still.  In Cincinnati a week-long venue in June can cost %7K to $20K.  Directors $15K to 20K.  At $52 a table we have to clear 450 to 800 tables just to break even.  We can’t afford a 20% tax for clubs and teachers.  (Cincinnati’s Unit 124 operates a Regional delegated from D11.  This minimizes the district’s financial risk and maximizes local knowledge and volunteer support). We could afford to increase table fees to $14 and contribute $1 of that to a growth fund.   

Clubs can do the same.  Of course if clubs are priced in their market where they have to absorb all higher table fees, then that’s a different issue – one of strategic choice made by the club. 

There are clubs who work hard at recruiting new players to bridge. There are those who are content to earn table fees and leave the heavy lifting of recruiting to others. Who should get the support??

If you haven’t yet read the children’s book The Little Red Hen, I suggest you do so now. Leadership is hard work.

Collaboration – the Missing Ingredient

We cannot have the degree of infighting I see and expect to turn around our current situation. To club owners I say there is no free lunch. To Units and Districts I say you need to support recruitment (Workshops, methods sharing, new member events, and results based financial support come to mind). To the ACBL I say you need to adopt a 10 year growth strategy, fund it from all operations adequately, organize around it, and reward accomplishment, not COMPLAINT nor empty ACTIVITY.

Key Thoughts:

  1. All efforts across ACBL, Districts, Units, Clubs, and Teachers must be aligned, coordinated and transparent if we are to create a successful growth engine. 
  2. Growth costs money. Success based incentives, not fiats.  
  3. Growth requires CHANGE, and takes exponential (not marginal) effort.
  4. There Is no free lunch in the current ecosystem.  No free money lying around to be redirected.
  5. Information is free, and if we share information about new prospects (via a centralized Customer Relationship Management system free to Districts, Units, Teachers, and clubs) and share best recruiting practices, we have a chance at growing everybody’s business. 
  6. Develop the activity-based information necessary to support tangible growth based on superior results.  This means including table fees in sanction data, and tracking games played by club and member.  We must do a better job targeting existing members to increase demand.  

We are not competing against one another.  We are competing to attract more people to play bridge at all levels.  Growth must include ACBL, Districts, Units, Clubs, Teachers, and members. 

“The height of stupidity is repeating an action and expecting a different outcome.” – A. Einstein.

“All organizations are perfectly designed to get the results they are now getting. If we want different results, we must change the way we do things.” – Tom Northrup

Good news - there is a BoD workshop on Thursday in Atlanta led by Paul Cuneo to address the path forward. He has also submitted a useful motion, a start toward building the funds necessary to grow members.

If any of you can provide objective costs to recruit new people to membership that would be a big help. We all need to know the size of the prize.

These viewpoints are mine and mine alone - they do not reflect the opinion of any organization that I serve.  

Submitted Respectfully, Steve Moese

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