Non-Payment of Prize Money at Chattahoochee River BBQ Competition

[Sledneck]

Just out of curiosity, does kcbs take legal action when they don't get paid or do they get their monies up front?

 

[Schooly D]

The solution sounds pretty simple to me. Number one if KCBS sanctions the event, then their integrity is on the line as a sanctioning body.

KCBS should buy insurance to cover the possibility of non payment byt the organizer. It would be pretty inexpensive and would protect the integrity of both KCBS and the sport in general.

Problem solved, quick n easy.

So when contest organizers don't pay, insurance will cover it, sure. But then what? Insurance rates will go up, and correspondingly entry fees will go up. You then have the teams footing the bill for increasing insurance costs.

As of 2013 KCBS has about $1 mil in the bank.

The more I think about it, maybe KCBS should pay. At least then it will be more inclined to be choosy over who it sanctions and who it doesn't.

 

[Ford]

Hi everybody. Been awhile. I saw this on Facebook and though I'd add my 2 cents. First off give the Kcbs time to find out exactly what's going on and see what they can do.

Teams have been stiffed in the past. You can take them to small claims court. It's happened before successfully. Other question, are We talking pro organizers working for charity, etc or was the whole thing done by this group?

Kcbs can't guarantee payouts although they do make organizers in some cases escrow the money.


Sledneck you know the Kcbs is paid upfront except for reps expenses that require receipts.


Good luck to all.

 

[cpw]

Just out of curiosity, have you tried contacting KCBS to see what they have to say about it? Sorry it has to happen at all, especially when it was such a good cook for you.

 

[Gowan]

Make no mistake, unless cooks change their behavior an escrow requirement will result in fewer contests.

For the uninitiated, here is an explanation of why this is true:

The average contest signs up around 40 teams, or about $10,000 in fees at current rates. Most events are structured to take all or most cash prizes from these funds. Sponsorship dollars are used to cover other festival costs like judging supplies, KCBS fees, tent rental etc. In some cases entrance ticket or people's choice sales also come in, but can't be counted on because they are so weather dependent. So there is no magic bag where prize money comes from; cook teams are essentially paying themselves.

Currently, most teams send their entry fees 8 weeks or less before the contest date, and many will wait until the last minute. The reason for this is that the majority of contests are hungry for teams and will usually take another team right up to the day of the event. Also most entries are not refundable. Cooks know this so unless the contest has a reputation for filling up there is no reason to tie up their money in advance, especially if the weather, work and/or family situation is uncertain.

So in this current environment, Mr. Average Organizer is going to have difficulty meeting a 90 day escrow requirement, since 90 days out he's only collected entry fees from 10% of the teams that will ultimately cook the contest. The only way it can work is if teams get used to signing up earlier and/or some other source of money can be found. As has been said here, many events are fundraising operations for charities without deep pockets, so the hope for the appearance of a generous rich uncle is unlikely.

A 30 day escrow might be achievable, but only if we as cooks will embrace the idea that we can no longer wait until the last minute before sending our entry checks.

 

[Gowan]

Other question, are We talking pro organizers working for charity, etc or was the whole thing done by this group?

Ford, the Chattahoochee contest was part of a music festival produced by a for-profit promoter.

 

[markG]

A Surety Bond would be the way to go. Probably a 10% bond on the total prize fund and a portion of that 10% would be the fee paid to the bond issuer. KCBS would be the payee in case the organizer skips.

KCBS could also "Self-bond" and charge that Surety Bond fee to the organizers. If they are putting wording like "they ensure payments are made" they better have something to back up that statement or they could be legally liable for those prize funds since they were the sanctioning body.

 

[toymaster]

As much as I'd like to sit back and say that they should pay the payout, they really shouldn't. It does none of us any good to "punish" KCBS by making them pay. I think we'd all be better served by helping the organization change its practices and specifically offering up suggestions as to how to conduct business going forward. I wouldn't be opposed however, to them stepping forward and at the least making the entrants who got calls whole on their entry fees.

I think an escrow system works but let's face it, many contest organizers aren't exactly flush with cash to allow them to park it into an escrow account. To make that a mandatory requirement may cut down on the number of contests. Is that what we want?

Also, personal guarantees don't work - litigation and trying to enforce the guarantee usually costs above the contest purse for a dubious successful outcome.

Just my .02 since this hasn't happened to me ray:. Let 1st year organizers put a percentage of the payout into escrow (40 or 50%) and let KCBS cover the rest. Now they are both on the hook for making sure winners get paid and maybe KCBS will be a little more selective about who they sanction. I don't see it as punishment, I see it as backing up their "seal of approval" that they put on the contest by sanctioning it. I don't know how many 1st year contests there are in a year but I don't think 1st year contests have payouts big enough that KCBS can't cover a percentage. The escrow will cover some and even if KCBS doesn't cover all of the rest, they will have an idea of what is going on and who is doing it. The alternative is not very many people will do 1st year contests any more and that hurts KCBS and us. I just competed in a 1st year KCBS contest at Greenport in Long Island and one of the reasons I did it is there aren't very many KCBS contests here and I would like to see more. I think this is a problem that needs to be nipped in the bud.

 

[toymaster]

Make no mistake, unless cooks change their behavior an escrow requirement will result in fewer contests.

For the uninitiated, here is an explanation of why this is true:

The average contest signs up around 40 teams, or about $10,000 in fees at current rates. Most events are structured to take all or most cash prizes from these funds. Sponsorship dollars are used to cover other festival costs like judging supplies, KCBS fees, tent rental etc. In some cases entrance ticket or people's choice sales also come in, but can't be counted on because they are so weather dependent. So there is no magic bag where prize money comes from; cook teams are essentially paying themselves.

Currently, most teams send their entry fees 8 weeks or less before the contest date, and many will wait until the last minute. The reason for this is that the majority of contests are hungry for teams and will usually take another team right up to the day of the event. Also most entries are not refundable. Cooks know this so unless the contest has a reputation for filling up there is no reason to tie up their money in advance, especially if the weather, work and/or family situation is uncertain.

So in this current environment, Mr. Average Organizer is going to have difficulty meeting a 90 day escrow requirement, since 90 days out he's only collected entry fees from 10% of the teams that will ultimately cook the contest. The only way it can work is if teams get used to signing up earlier and/or some other source of money can be found. As has been said here, many events are fundraising operations for charities without deep pockets, so the hope for the appearance of a generous rich uncle is unlikely.

A 30 day escrow might be achievable, but only if we as cooks will embrace the idea that we can no longer wait until the last minute before sending our entry checks.

I'm one of the uninitiated. If the sponsors are paying for the festival costs, where are the entry fees going? I've seen contests where the prize money goes up as more teams enter, so am I missing something? Maybe KCBS should have a class for 1st time organizers?

 

[Gowan]

I'm one of the uninitiated. If the sponsors are paying for the festival costs, where are the entry fees going? I've seen contests where the prize money goes up as more teams enter, so am I missing something? Maybe KCBS should have a class for 1st time organizers?

I apologize if I wasn't clear. I'll take another run at it.

Cooks look at the percentage of the entry fees that are being paid back as prizes, and the lower this ratio goes the more teams will avoid your event. Because of the many other expenses involved in putting on a festival, it usually doesn't work to try to run a contest on team entries alone because after the bills have all been paid the prize money is too small.

Sponsors typically finance all the non-glamorous aspects of a festival, things like:

• Utilities - electric & water
• Trash pickup
• Portapotties
• Event Advertising
• Security
• Liability Insurance (required by KCBS)
• Tent, table, chairs rental
• Judging supplies (turn in boxes, bottle water, paper towels, etc.)
• Signage
• Meals/snacks/etc. for cooks & judges
• Goodie bags

At events I have organized, we try to set things up so that cook team fees are used to cover only the line items that go directly to the teams. Usually this means prize money, trophies, and possibly KCBS fees. Hence the direct relationship between number of teams and payout.

The rub is that organizers must announce their prize pool long before they know how many teams will sign up, so they assume all the risk. For events put on by charities, their governing board usually starts to get very nervous at the prospect of having to come up with thousands to make good on a promised payout when they only have a handful of teams confirmed a few weeks before the event. This fear is exactly what is behind many of the cancellations you see from KCBS events a month or so prior to the scheduled date.

 

[landarc]

The one problem that would occur if KCBS set up a escrow account, would be that they are taking on a fiduciary responsibility for the money. It would create an entirely new layer of reporting and management.

As bad as it is to not get paid, one of the problems with any event or festival is the risk of not getting paid.

 

[Smoke'n Ice]

For some of us, it is known that up until several years ago, KCBS required a bank letter of credit from the organizer a week or so prior to the contest or they would withdraw their sanctioning. this policy was changed by the BOD because one organizer in AR, who at the time did multiple contest all over the US, threatened to take his show elsewhere unless they cut him a deal. The BOD then caved and withdrew the requirement from all comps. We now get a few rogue organizers that make that decision look bad in retrospect.

I also believe that KCBS has a method in place whereby they get their money up front and a procedure to insure that the reps are reimbursed which they may cover and then go after the organizer

 

[PatAttack]

The real question should be where the fark did the money go?!?!

They offered a pretty lame explanation of the money got withdrawn by another employee. So, was it moved to another account or used to pay the bands or outright stolen?

Very sorry for all the teams involved.

This "rep" or "promoter" or whoever they are should be blacklisted by KCBS and any other competition organization. They should be called out so everyone knows not to do business with them. Ever. I did read in an earlier post about a shady event promoter. Were they really the ones handling this?

 

[rtboswell]

The real question should be where the fark did the money go?!?!

They offered a pretty lame explanation of the money got withdrawn by another employee. So, was it moved to another account or used to pay the bands or outright stolen?

Very sorry for all the teams involved.

This "rep" or "promoter" or whoever they are should be blacklisted by KCBS and any other competition organization. They should be called out so everyone knows not to do business with them. Ever. I did read in an earlier post about a shady event promoter. Were they really the ones handling this?

The story that has continued to be given to us is that one partner withdrew the money and that the other was going to press charges and it was a criminal matter. The partner who said he was going to press charges could produce no proof that said charges were actually pressed as of late yesterday afternoon. This leaves me to believe that the story is untrue. What else am I left to believe when it takes little common sense to know that they lost large sums of money at this event?

 

[rtboswell]

Ford and Gowan are right. I'm going to give this some time to work itself out. Technically per the sanctioning agreement the organizer has ten days for prize money to be paid. That does require ignoring the bad check issue, but I'm willing to do that for a bit.

I'm trying to take a deep breath and not let this make me so angry. I'm not just upset about the money. I'm upset about the lack of processes in place to prevent this and the fact that this could happen infinite times. Reading the threads about Allentown, PA and Nashville, TN and seeing that some people still aren't paid a year later means that there was recent precedent to reevaluate this issue. Yes blacklisting the organizer in the future is a step but that makes no restitution to the teams that were denied the money they were competing for at the events.

 

[bbutts]

Many years ago, I was a first year organizer. I went through the KCBS checklist meticulously to ensure I had a successful contest and that the entrants would receive their payouts. The year I did not have the money secured early, I cancelled the contest with 6 months notice rather than ending up in a non-payout situation as I would be hoping to raise sufficient cash.

I worked as a volunteer with several well known organizers to help a "high profile" contest in the St. Louis area and the organizer did not have the money and it was a very ugly situation.

I am in full agreement that the KCBS should maintain a prize money escrow that should be opened with a significant deposit and be paid in full 30 days prior to the event date. I think any costs associated with should be worked into the fee structure.

This would give contestants the piece of mind that an event sanctioned by KCBS, will not only have an organized structure, but will not back poorly planned/funded events. There are several other sanctioning organizations that a contest could go to if they could not agree to this escrow or afford it.

Just my two cents

 

[DawgPhan]

So we need new rules because one contest doesnt pay out? There are hundreds of contest that do pay out. New regulations that are going to cost more money to organizers and ultimately the teams? We want to make every contest more expensive, make this hobby more expensive because one organizer got in over his head.

 

[Skip]

I have to agree with Gowan. There is no way to get an escrow account for prize money 30 days out let alone 90 days out. To require most organizers to do so would remove them from the market. I have worked on contests and know that with everything else going on that this would just be the straw that breaks the camels back. Contests would be offering terrible initial payouts due to the need for a guaranteed account. Once you start lowering payout expectations you lose teams to other contest with deeper pockets even though your contest will end up with a good prize pool. First year contests just wouldn't get off the ground without professional organization and that normally comes with its own headache. It would probably change the face and nature of contests as well since they would become a for profit endeavor and profit would drive the contest. BBQ contests would become a portion of a festival since the BBQ doesn't make the money or the entry fees would go through the roof since charitable donations wouldn't be around anymore.

 

[J&B'sBBQ]

This was my second, 1st year event this year, and both were enjoyable events. The first was Piggin' in the Park in Woodruff, SC, and then this event, but this is the only one that had issues with payment, so I wouldn't lump all "1st year events" into the same boat. Actually, Nashville, which has been mentioned a few times, was not a 1st year event when they had their financial issues last year, so I don't feel this is isolated to 1st year events as a whole.

I do agree with Skip, that forcing KCBS to do something drastic would decrease the likelihood of new 1st year events and change the face of the way these events are handled. In three years we've cooked well over 30 contests, and this is the first time we've faced a non-payment issue. There are many teams that never see this.

A few posts back someone mentioned something about events that show their verified funds (escrow or credit) can get a "gold star", and events that do not are more of an "at your own risk" event, and I don't think that is a terrible idea to consider. There needs to be some sort of assurance system if KCBS is going to put their names on these events, but I'm not sure what the solution would be, but I don't feel that doing something that will punish all 1st year events would be the answer.

 

[Gowan]

It is true that the current system fails to weed out well-meaning but poorly prepared organizers as well as sketchy for-profit promoters, the two groups responsible for most contest defaults. Stricter rules might help filter the latter group, but better guidance is what the newbie organizers need most.

I have always thought that it was odd that the keystone population of KCBS - the organizers - have the least support of any of the stakeholder groups. Think back over the last few years; there have been various programs and initiatives directed to cooks and judges, but how many can you recall that were designed to benefit organizers?

The folks who put on contests should have more support from the home office in KC instead of being taken for granted. This is something we work on actively within the Georgia BBQ Championship organization, but as the primary sanctioning body KCBS ought to be taking a stronger lead in this area, in my opinion.

Rest assured that the GBC does closely scrutinize all contests that apply for membership, and board members are constantly gathering feedback from participants at all Georgia KCBS events. By vetting contests thoroughly, our goal is to present a lineup of quality events each year that teams and judges can count on for a positive contest experience.