A PROPOSAL by Sydney Gay and Lesbian Mardi Gras to link the safeguarding of the festival’s famous name with the ongoing solvency of the organisation, has been described as “nonsensical” by critics, who have called for members to be told whether the 2014 season made a loss before any decision is made.
At an extraordinary general meeting (EGM), scheduled to take place Chippendale in Sydney’s inner west this Saturday, members will be asked to give Mardi Gras permanent custodianship of the festival’s intellectual property (IP), most notably the Mardi Gras brand and logos.
Several former Mardi Gras directors have told the Star Observer they are concerned members were being asked to vote on their confidence in the organisation’s solvency based on 2013’s financial accounts, which show a $46,000 profit.
However, David Wilson, a board member until early last year, said there had been “persistent mutterings” of an overspend during the 2014 season and Mardi Gras should disclose any subsequent loss to members in advance of voting on the proposal.
Before last year’s profit, Mardi Gras had spent three consecutive years in the red with a loss of $576,000 in 2010.
Wilson said the solvency of Mardi Gras could never be guaranteed and its business model was “always going to be fragile, at best”.
“The best way to protect the IP is to ensure it can never be touched,” said Wilson, “and then it doesn’t matter what happens to the profitability.”
Saturday’s motion contrasts with a resolution passed by members in 2011 that Mardi Gras formally make preparations to separate its IP from its business operations. This would mean that if it went into liquidation, the Mardi Gras name would not be included in a fire sale to pay off debts and could be saved for the community.
The name was almost lost once before in 2002, when the then-Mardi Gras organisers went to the wall with a coalition of community groups stumping up more than $270,000 to purchase, among other assets, the festival’s IP.
Since then, there has been almost constant debate on how to safeguard the Mardi Gras name.
Another former director, who did not wish to be identified, said the motion was “nonsensical” and members should be given adequate time to scrutinise Mardi Gras’ finances before voting.
“The motion basically says trust us, we will not make losses and put the company in jeopardy and that is the best way to protect the IP,” the former director said.
“Yet the board has not announced the result for 2014, which is rumoured to be a substantial loss.”
The former directors have also questioned the timing of the EGM, just weeks before the annual general meeting, when the accounts would usually be made public.
In the EGM notes, Mardi Gras say the impetus for taking ownership of the Mardi Gras name in-house was due to reservations from a number of community groups about the structure of a new IP-owning organisation – an organisation of which they would likely be on the board.
However, Wilson said other options for the structure of the IP organisation had not been fully explored.
Mardi Gras spokesperson James Rongen-Hall said there was no binding requirement on the organisation to hold the EGM this Saturday and the timing had been directed by the current board.
He said having a separate meeting would give the issue “its own time so people had nothing else to focus on” and was similar to the process undertaken to change the name of the organisation from New Mardi Gras to Sydney Gay and Lesbian Mardi Gras.
Mardi Gras also deflected questions on a possible loss for 2014, telling the Star Observer the accounts were still being finalised and the auditing was not yet complete.
However, Rongen-Hall said that at the EGM Mardi Gras did intend to “give members some indicative advice on the financial results bearing in mind these can and [do] shift quite dramatically due to accounting quirks.”
Asked if this would include information on whether the latest season had posted a loss, Rongen-Hall said the intention was “to give members an accurate picture of where things are at.”
Mardi Gras conceded that only one potential organisational structure was presented to community groups at presentations held in 2013.
Rongen-Hall said the community had been “paralysed by choice” when it came to the shape of a separate organisation with debate going on for 10 years.
“All sorts of models were proposed and explored during a sustained process of consultation,” he said.
“Other models have been found to be lacking in some way.”
Rongen-Hall added that putting the Mardi Gras name under the custodianship of Sydney Gay and Lesbian Mardi Gras is the “optimum mix of various models”.
The EGM will take place on Saturday June 28 at 9.45am for a 10am start. L3, Central Event Space, Central shopping centre, 28 Broadway, Chippendale