Sydney Gay and Lesbian Mardi Gras flags smaller party as 2014 season makes “unacceptable” loss

Sydney Gay and Lesbian Mardi Gras has flagged staff cutbacks and a far smaller Party next year following the announcement of a $177,000 loss on the 2014 season following the first profit in three years in 2013.

Mardi Gras Co-chair Siri Kommedahl said: “Our result this year was unacceptable and we’re not happy about it.”

Attendees at today’s extraordinary general meeting (EGM), held in the inner Sydney suburb of Chippendale, heard the organisation reveal details of its current financial situation ahead of the release of the full audited accounts next month.

Mardi Gras lost $177,152 on the 2014 season compared to a near $46,000 profit last year. Before that, Mardi Gras had spent three consecutive years in the red with a loss of $576,000 in 2010.

Mardi Gras’ reserves now stand at around $440,000 compared to more than $900,000 three years ago. By far the biggest shortfall came in ticket sales which were overestimated by more than half a million dollars.

The budget for 2014’s Party was at least $100,000 more than 2013’s Party, yet around 1,600 less tickets were sold.

The 2013 Party featured Delta Goodrem, The Presets and the Scissor Sisters’ Jake Shears while 2014’s big name act was Tina Arena.

Mardi Gras admitted much of the increase in funding went not on entertainment but in areas such as decorations to combat feedback the 2013 Party had a “cheap feel.”

Talking to the Star Observer, Kommedahl said: “We’re very disappointed, there were a lot of factors as to why this happened and we’ve been doing everything possible to ensure that does not happen again. “Next year must make a profit.”

Mardi Gras CEO, Michael Rolik, said the organisation’s inability to secure more big name acts, competition from other events, public confusion over the NSW Government’s new lockout regime, concern over police presence at the venue and “expense creep” was behind the loss.

He said: “It was apparent by the end of January, Party sales weren’t taking off,” and while costs were reduced by $150,000, this was: “not enough to address revenue decline of $526,000.”

Rolik said there would be changes to the Party: “Crisis is the mother of all invention,” he told the Star Observer, “We have to live within our means so it will certainly be a smaller party.”

However, Rolik said Party could not be relied upon to be the cash cow it once was: “For the last 20 years Mardi Gras has relied on the Party but there is an inherent risk on what we can’t control and we saw all of those risks come home to roost this year.”

As Party revenues declined, he said, other parts of the organisation would have to be more self-funding and other revenues streams would be opened up.

One of those funding streams will come through the establishment of Mardi Gras Arts, passed by members at the EGM, which will allow the organisation to take on donations and secure tax concessions as a registered cultural organisation.

Rolik said staffing costs would also be cut back with shorter term contracts for temporary staff and more volunteer involvement. However, following a number of departures from senior ranks in the last few months, Rolik said they were: “happy we’ve got staffing right in terms of our year round staff.”

There was better news for the Mardi Gras board with the passing of a motion confirming the ownership of the festival’s intellectual property (IP) – including the Mardi Gras name – within the organisation.

Several members argued that a standalone body should own the IP so it couldn’t be sold off to pay down debt in the event of Mardi Gras going bust.

Kommedahl welcomed the result saying: “It’s time to get on with making sure this organisation is the best it can be for the future.” Asked whether Mardi Gras was in safe hands, despite the losses announced, Kommedahl said: “I believe so. It’s of utmost importance to make sure we are viable for the future and the best way to do that is business continuity, good management and the support of our community.”