Just like her ratings, Miss America's bank balances falling fast Source: http://www.newsday.com/ By JOHN CURRAN Associated Press Writer September 1, 2005, 2:38 PM EDT ATLANTIC CITY, N.J. -- The Miss America Organization lost $1.7 million last year, its fiscal fortunes plunging due to less television revenue, according to the annual tax return of the organization that stages the struggling beauty pageant.
The pageant, which cited fiscal troubles last week in announcing plans to move the contest out of Atlantic City, took in $3.2 million from former network sponsor ABC, compared with $5.6 million the year before. Its net assets, meanwhile, dipped to $3.6 million, from $5.7 million the year before, according to the return, which was released Thursday.
"There's really one major difference between this tax return and last year's, and that is the difference in television income," said Art McMaster, CEO of the Miss America Organization. "That just flowed all the way to the bottom line."
The Miss America Organization, which employs less than 20 people but uses a vast network of volunteers and sponsors to stage its pageants, is exempt from federal income taxes as a non-profit, social-welfare organization dedicated to awarding scholarships. But it must file tax returns outlining its revenue and spending.
The filing of the 2004 return Wednesday had been delayed because the organization obtained an extension from the Internal Revenue Service. The postponement came as Miss America officials scrambled following ABC's October decision to drop the annual telecast, leaving Miss America without a network sponsor for the first time in 50 years.
The pageant, which was forced to postpone its 2005 pageant to next January, has since signed with cable outlet Country Music Television. CMT will televise the next crowning although no one knows yet where that will be.
The organization actively entertaining offers for a new venue, and McMaster has said the pageant may take to the road permanently, airing from a new city each year while the organization keeps its home offices in Atlantic City.
The tax return offers evidence of the dire fiscal picture he painted last week when he surprised Atlantic City officials by asking to be released from the final two years of the pageant's five-year contract to stage the Miss America pageant in the city's Boardwalk Hall.
According to the tax return, the Miss America Organization:
_lost more than twice as much in 2004 as in 2003, when it posted a $706,507 deficit.
_spent $964,462 on scholarship aid last year, down from $1.1 million the prior year.
_used $388,548 to help state and local pageant organizations.
_spent $371,793 underwriting the travels of the reigning winner, who criss-crosses the nation promoting the Miss America program and her platform, and her traveling companions. In turn, the MAO took in $66,740 in appearance fees from organizations that paid to have Miss America visit or appear on their behalf.
_paid McMaster $161,000, far less than the salaries of some previous CEOs, who made up to $285,000.
_saw the value of its investment portfolio drop to $4.7 million, from $6.4 million at year's start.
The worsening financial picture and the high cost of staging the event at Boardwalk Hall were blamed last week when McMaster pleaded with Atlantic City Convention & Visitors Authority officials to be released from the contract, which included a $720,000 annual subsidy from the state.
According to McMaster, the cost of outfitting Boardwalk Hall with the lights, cameras and audio necessary to make the Depression-era landmark TV ready resulted in an annual loss of about $500,000 to the Miss America Organization, which he said made the pageant's continued use of it impossible.
He said at the time that the pageant could save up to $1 million by moving to a new venue in a new city, between reduced telecast production costs and site fees potentially offered by a new location.
"The days of big-money television are over," he told the Authority's board. "Miss America has to put money in our pockets to survive," he said last week.