The president of Sydney Gay and Lesbian Mardi Gras has warned that the company will go into voluntary administration next week unless it can secure guarantors for its $250,000 bank overdraft.
In a statement released to Sydney Star Observer yesterday, president Julie Regan said that an individual who had proposed to act as guarantor for the full $250,000 overdraft backed out earlier this week.
The board has given itself until Sunday morning to secure other guarantors, but will look at voluntary administration as an option if none are forthcoming. Mardi Gras is looking for a consortium of five individuals or businesses who will go guarantor -“ on the basis of $50,000 each.
Mardi Gras traditionally enters a period of overdraft during July, Regan said. This year, due to the size of our end-of-year loss, our bank has required guarantors for our overdraft -“ we believed we had this in place until yesterday, but this has now changed.
Regan told the Star that the original guarantor had placed a number of conditions on Mardi Gras, but they had also wanted to share the risk. It was possible that the original guarantor may stay on as part of a consortium of five, she said.
We are now at the point where we have to seriously consider the option of going into administration if the overdraft is not secured, Regan warned. We have a major part of our financing confirmed, but we have set ourselves a deadline of this Sunday to have all the building blocks in place, including the loan and the guarantors for our overdraft with which to approach the bank. The board will then meet to consider the situation.
One member of the proposed consortium of five is already in place: former board member Ewan Samway, who quit the board last month after a disagreement over the organisation’s strategic res-ponse to its impending loss.
Samway told the Star he was in favour of going public with the true financial picture much earlier, but that a significant proportion of the board objected.
The current sense of crisis around Mardi Gras comes just one week after the organisation launched a community donation appeal to make up for a loss during the 2001-2002 financial year of $534,000. (Last week’s Star reported a figure of $530,000.)
Response to the donation appeal has been slow, with only $15,000 promised to date -“ approximately three percent of the total the organisation needs.
There are people who have been supportive of that policy, and that’s been very heartening. We’re obviously looking for more support, Regan said.
But other sources said the figure raised to date was laughable, and that it raised questions about community support for the current board of Mardi Gras.
A forum scheduled for this Saturday should provide some gauge of community support and thinking about Mardi Gras. A community consultation meeting organised by Sydney 2002 Gay Games which was also due to take place on Saturday has been cancelled in order for community members to attend the Mardi Gras meeting.
Samway stressed that there was still only limited information in the public domain about Mardi Gras’ situation. A similar point was made by former organisation president Richard Cobden, who said the Mardi Gras business plan referred to by Regan in press statements last week and this week had still not been sighted.
The crucial question, which has not been answered, is what is this business plan? Cobden said. There is no detail; we’re expected to take this on trust. They have already expended all the trust placed in them.
Samway said a point that had been lost in some of the debate so far was that Mardi Gras remained a viable business.
No matter what the propaganda is about declining numbers at big parties, the Mardi Gras party is still a huge money maker. It can certainly fund a huge range of community programs. It’s a cash cow, Samway said.
Mardi Gras makes a hell of a lot of money from party animals, to feed a fat organisation and a curated gay and lesbian festival that very few people attend, he said.
Regan and the board are anticipating some fiery responses to Mardi Gras’ current crisis to surface at the Saturday meeting.
We’re all focusing on the crisis, she said. We cut, and cut hard into the organisation, but we didn’t cut hard enough. We were endeavouring to deal with the issues as they came up. People might feel that we didn’t deal with them adequately.
The community forum will start at noon on Saturday at the Mardi Gras workshop, 21-23 Erskineville Road, Erskineville.