Friday, October 16, 2020

Memphis in May Reports Record Financial Loss

Posted By on Fri, Oct 16, 2020 at 9:50 AM

click to enlarge The cover of Memphis In May's 2020 annual report shows an empty Tom Lee Park. - MEMPHIS IN MAY INTERNATIONAL FESTIVAL
  • Memphis In May international Festival
  • The cover of Memphis In May's 2020 annual report shows an empty Tom Lee Park.

The Memphis in May International Festival (MIM) reported a record loss of revenue this year after the cancellation of the festival on COVID-19 concerns.

Festival leaders said the nonprofit organization lost around $1.8 million in 2020, making it the worst financial year in the festival’s 44 years. The loss comes after the festival recorded its best financial year last year on revenues of more than $12 million, according to the MIM’s annual report.

“The challenges presented by the pandemic represent the most difficult period our organization has ever faced, and the challenges are ongoing,” said James Holt, MIM’s president and CEO. “For the first time in 44 years, Memphis in May did not happen. Without a festival there is very little to no revenue for 2020 and consequentially Memphis in May has suffered a devastating $1.795 million financial loss. A loss of this scale has no precedent in the festival’s history. Historically, the organization’s largest loss to date was $595,000 in 1998.”
To adjust to the economic challenges, MIM took federal Paycheck Protection Program (PPP) loans, cut costs, and furloughed most of the staff, according to MIM. Organization leaders are “working to see the new challenges and plan to present festival events again safely in May 2021” (schedule dates are below).

Festival events are the backbone of MIM’s revenue stream. Last year, those events brought in more than $8.4 million. This year, they brought in $137,748. Sponsorships are the next-biggest money makers for the festival. They made $461,645 this year, compared to more than $3 million last year.
  • Memphis In May international Festival

Payroll was the still the largest expense item for MIM this year, even though it furloughed most of the staff, as leaders said. The management budget was cut only by $327,457 from 2019 to 2020. Management expenses were more than $1.9 million this year compared to $2.3 million last year.

It wasn’t immediately clear if MIM leaders took pay cuts in a year of record losses. According to its 2018 tax data, Holt made $203,500. Compensation for the organization’s top three executives totaled $470,074 that year.

The final tally of MIM’s 2020 finances show income of $731,351 and expenses of more than $2.5 million, putting the organization in the hole by roughly $1.8 million. It had assets of more than $3.8 million at the beginning of its fiscal year and ended the year with more than $2 million.

The financial blow comes as MIM had recorded four years of increasing revenues. The organization made $8.5 million in 2016, $9.7 million in 2017, $10.7 million in 2018, and more than $12 million in 2019.

  • Memphis In May international Festival

The effect of the festival’s cancellation went far beyond the MIM office, however.

“Memphis in May [is] a month-long economic engine that not only drives visitation and hotel stays, but the trickle-down economic effect is endless with local vendors who help execute the operations of the festival,” said Kevin Kane, president & CEO of Memphis Tourism.

2021 Memphis in May International Festival Dates

• Beale Street Music Festival: April 30th-May 2nd, 2021

• Salute to Ghana May 1st-31st, 2021

• World Championship Barbecue Cooking Contest: May 12th-15th, 2021

• Great American River Run: May 29th, 2021

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