The Other Festival P&L

To prepare a financial report on the money that the ‘Heritage’ Festival generates in the community, an estimated 6 million in spin-offs, I retained the accounting firm of Scratchitt, Sniff and Partners to review this year’s Festival. Unfortunately, none of the businesses they approached would give them access to their books, but SS&P did have a model that they use to support a number of marketing gurus.

SS&P’s methodology was to estimate the revenues from the Festival weekend and deduct the normal weekend revenues of a long summer holiday weekend as if there were no Festival. Without their copious footnotes, here is their report:

Revenues for the three-day Festival
1. Motels and hotel rooms: 3 nights x 150 rooms @ $125 = 56,250
2. Meals in restaurants above weekend average: 2,000 @ $25 average = 50,000
3. Fast-food not at Festival site: 5,000 @ 12.00 average = 60,000
4. Fast food and beverages at festival site: 50,000 @ 7.50 = 375,000
5. Souvenirs and flea market sales: = 200,000
6. Midway rides, trinket sales and games of chance: = 800,000
7. Promotional advertising sector: = 125,000
8. Gasoline sales above weekend average: = 8,000
9. Groceries (sales above weekend average): = 60,000
10. Bars and night clubs: = 300,000
11. Transportation sector (taxi, bus, airplane, rentals): 3,000
12. Wages and overtime (public employees): = 145,000
13. Part-time local wages: 50,000
14. Other miscellaneous: = 37,750
Total revenues: $2,250,000

Expenses for the three-day Festival
1. Motels and hotel rooms (laundry): 375
2. Meals in restaurants - cost of food: 35,000
3. Fast-food not at Festival site: 40,000
4. Fast food and beverages at festival site: 200,000
5. Souvenirs and flea market sales: = 25,000
6. Midway rides, trinket sales and games of chance: = 300,000
7. Promotional advertising sector: = 35,000
8. Gasoline sales above weekend average: = 7,400
9. Groceries (sales above weekend average): = 51,000
10. Bars and night clubs: = 150,000
11. Transportation sector (taxi, bus, airplane): 2,600
12. Wages and overtime (public employees): = 0
13. Part-time local wages: 50,000
14. Other miscellaneous: = 37,750
Total expenses: 934,125
Net for Festival: = $1,315,875

The next step by SS&P was to estimate what amount of this profit stayed in North Bay. The auditors deducted what they considered normal franchise fees wherever that applied.

1. Motels and hotel rooms: 40,000
2. Meals in restaurants above weekend average: 12,000
3. Fast-food not at Festival site: 16,000
4. Fast food and beverages at festival site: 5,000
5. Souvenirs and flea market sales: = 2,000
6. Midway rides, trinket sales and games of chance: = 215,000
7. Promotional advertising sector: = 85,000
8. Gasoline sales above weekend average: = 200
9. Groceries (sales above weekend average): = 3,000
10. Bars and night clubs: = 125,000
11. Transportation sector (taxi, bus, airplane): 400
12. Wages and overtime (public employees): = 145,000
13. Part-time local wages: 50,000
14. Other miscellaneous: = 35,000

Money staying in City: = $733,600 (adjusted for taxpayer subsidy) = (approx) $600,000

According to SS&P, this $600,000 will circulate in the city in the trickle-down economy philosophy for over a year, changing hands in an ever-decreasing circle for 12 times. The effective economic input is thus 4 million dollars. (Privately, Scratchitt told me this model was based on all local goods and services and he thought a single multiplier of 2 was more accurate in our case.) Fortunate are those who get to touch this money on its way by!

Considering we sent $500,000 out of town for entertainment alone, and adding to that the profits taken away by the midway and non-local sales, we are lucky to have the visitors coming to city to pay for our Festival. And without the sponsors and volunteers . . .

But what they Hey! It’s a great weekend! In addition, we can entertain ourselves all year long whining about it!