New Mardi Gras may merge its season-opening Launch party with Fair Day in a bid to remain sustainable, following serious financial losses on its 2005 season.
New Mardi Gras lost more than $300,000 on the 2005 season after failing to meet budget targets for every event it produced.
The pre-income tax figure, announced in New Mardi Gras’ 2005 annual report released last week, is almost twice the after-tax loss of $166,000 forecast last month.
Last year the company announced a profit of $123,181 for its 2003/ 2004 financial year.
The 2004/ 2005 loss means New Mardi Gras would consider merging signature season events Launch and Fair Day in an effort to cut costs, according to co-chair Mark Orr.
Whilst I think there are some fundamentals for the organisation such as the parade, I think we need to look seriously as an organisation and as a business at how we do things and what we can do reasonably to ensure [our] sustainability, Orr told Sydney Star Observer.
Asked whether that included the possible merger of Launch and Fair Day, Orr said: Anything’s possible. There could be an argument to do that.
Former New Mardi Gras co-chair Michael Woodhouse, who helped establish the organisation after its predecessor collapsed in 2002, agreed a Launch-Fair Day merger should be examined.
I think it’s something that people who have their fingers on the till and are involved in running the organisation ought to actively consider, Woodhouse told the Star.
There is a reality that cash only goes so far, and that cash flow for Mardi Gras has always been difficult.
If [the merger of Launch and Fair Day] helps in that situation, then it ought to be looked at.
New Mardi Gras has also reviewed its financial processes after a year in which it spent more on security and almost as much on entertainment as in the preceding 17 months.
The report also showed $304,000 was spent on other expenses from ordinary activities, but failed to give details of what these activities were.
Mark Orr said security costs were up this year because New Mardi Gras used more than one security provider. Entertainment expenditure rose because of the higher amounts paid to party DJs and performers, he said.
But Orr admitted the $304,000 spent on unspecified other expenses from ordinary activities was a big bucket [and] people are going to ask what’s in there.
He was not able to provide details of those expenses, but said they would be available at New Mardi Gras’ annual general meeting on 25 June.
Asked what New Mardi Gras would do to avoid going bankrupt, Orr said the organisation would continue to review processes and stick to stricter budgets.
Michael Woodhouse said New Mardi Gras might need to make some hard decisions about how things are run, what events are run, what is the trade-off and the best way to spend pretty limited resources.
Restricting party ticket sales to members -“ which could reduce New Mardi Gras’ tax obligations -“ was one possibility, Wood-house said.
He also flagged the sale of naming rights to the New Mardi Gras parade as a potential revenue raiser.
I don’t think anything should be out of the question in terms of ensuring that we maintain what is a vital piece of infrastructure for the community, he said.
But Mark Orr said the sale of naming rights was an issue for wider community debate, and the New Mardi Gras board had made no decision about it.