RE: AMA"s MA again loses $$$

RE: AMA"s MA again loses $$$
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RE: AMA"s MA again loses $$$ - 5/17/2007 10:39:03 PM

Hossfly

Posts: 3770
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From: New Caney, TX, USA
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quote:

ORIGINAL: mr_matt

You got it, JUGFLIER, the AMA magazine "staff" reacts with the line that they cannot raise rates, so we just have to absorb it.

In private business you would be OUT of business with this attitude.

The answer is to LOWER COSTS on the magazine. When this is recommended, the standard retort is "what would you cut"?

Easy, cut 1/2 the staff. I bet the magazine still gets printed.

And don't even get me started on this "hardcopy newsletter" requirement. I still cannot believe in this day and age you cannot have an online newsletter that meets the requirements of the IRS for charitable organizations. This is just featherbedding.

Hoss is right on this one, like it or not.

Thank you for the kind words mr_matt, however cutting the staff will not show up in the profit or loss of the magazine since the staff is already accounted for under AMA's regularstaff and not under the MA expense statement.

Where this really comes to play is when AMA officials raise dues, they usually blame such need on the cost of insurance. In reality, the magazine's net-loss expense is well in excess of the cost of the membership General Liability Insurance policies. If the actual cost of the magazine staff was factored into the equation, the magazine's net-loss would approach twice the cost of the liability insurance policies. Why does AMA NEED such a commercial magazine operation that simply demotivates other media from supporting AMA outside the choir in the free market?

To be fair: The commercial mags have a big edge over MA: They can devote many more pages to ads than MA can. OTOH MA has an edge in that they have a prepaid circulation of, as printed last October issue (IIRC) 137,000 issues plus a few thousand more for H/Ss while the nearest competitor, MAN, is around 70,000. So there is an advantage trade-off there.

IMO, any HONEST AMA President and/or officials should be truthful and readily display such true expenses when proposing any increase in any dues. In addition the reasons for such accounting methods need not be kept secret as they are legal for IRC 501(c) (3) operators. Why not just be open with the membership?

_____________________________

Horrace Cain.
AMA Life L-93, Leader and CD for 45 years
Official Candidate: AMA Ex. Vice Pres. Vote H. Cain. Help move AMA into 21st Century
The only source of knowledge is experience. Albert Einstein

(in reply to mr_matt)

Post #: 26

RE: AMA"s MA again loses $$$ - 5/17/2007 11:47:04 PM

Live Wire

Posts: 3778
Joined: 11/20/2002
From: Sterling , CO, USA
Status: online

hoss
It always payes to open the front page ad read a little before a person opens their key board

You get what you want out of the mag

people complain when they get some thing extra like egg in their Beer

_____________________________

Larry K AMA 36417
WACO Brotherhood #34

(in reply to Hossfly)

Post #: 27

RE: AMA"s MA again loses $$$ - 5/18/2007 2:55:30 AM

STLPilot

Posts: 9110
Joined: 3/12/2003
From: Manhattan, NY, USA
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So even if MA raised it's rates 100% they still would not break even, so what's the difference? Would a 10% increase or even 15% satisfy the OP? Even if you raise the rates 15% do you expect everyone to just pay that rate with a big smile? You think you won't lose advertisers? If you raise 15% you'll acheive nothing but to go right back where you started with less adverisers. Magazines don't have the power to just raise 200 company ad budgets over any course of time.

< Message edited by STLPilot -- 5/18/2007 5:38:06 PM >

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Post #: 28

RE: AMA"s MA again loses $$$ - 5/18/2007 12:53:17 PM

moodier

Posts: 745
Joined: 10/5/2002
From: Yuma , AZ, USA
Status: offline

HI;All this concern over the Mag.It is the only mag I get glance at and throw in the trash,will admit i do page thru some of it first but that is it!!Would gladly dump the mag for a reduction in dues!!My 2cents!

(in reply to STLPilot)

Post #: 29

RE: AMA"s MA again loses $$$ - 5/18/2007 2:56:40 PM

Jim Thomerson

Posts: 2792
Joined: 10/9/2002
From: Austin, TX, USA
Status: offline

Not being cosmically knowledgable about model aircraft stuff, I do find things of useful interest in Model Aviation.

(in reply to moodier)

Post #: 30

RE: AMA"s MA again loses $$$ - 5/18/2007 3:57:12 PM

RCPAUL

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From: Gahanna, OH, USA
Status: offline

Maybe it will get better when Hunt leaves this summer.

Paul

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Post #: 31

RE: AMA"s MA again loses $$$ - 5/18/2007 5:33:28 PM

STLPilot

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From: Manhattan, NY, USA
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I just called my lawyer and he told me that MA can pull in about 25% of non related business income to their total income. Anything over 25% they just have to pay income tax on the profit, so MA can run as many ads as they wish since no matter how many ads they run it will be well below 25% their annual revenues. He also informed me that many 501C3's can get away with as much as 50% non related total income and still maintain their status.

If MA was a standalone unit and was not umbrellaed under the AMA, then they would have to limit their overall profits and revenues.

< Message edited by STLPilot -- 5/18/2007 5:52:03 PM >

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Here At The Wall

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Post #: 32

RE: AMA"s MA again loses $$$ - 5/18/2007 10:35:28 PM

Jim Thomerson

Posts: 2792
Joined: 10/9/2002
From: Austin, TX, USA
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I understand Bob is putting a good bit of effort into training his replacement, and is confident the magazine faces a successful future.

(in reply to STLPilot)

Post #: 33

RE: AMA"s MA again loses $$$ - 5/19/2007 12:28:31 AM

Hossfly

Posts: 3770
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From: New Caney, TX, USA
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quote:

ORIGINAL: STLPilot

I just called my lawyer and he told me that MA can pull in about 25% of non related business income to their total income. Anything over 25% they just have to pay income tax on the profit, so MA can run as many ads as they wish since no matter how many ads they run it will be well below 25% their annual revenues. He also informed me that many 501C3's can get away with as much as 50% non related total income and still maintain their status.

If MA was a standalone unit and was not umbrellaed under the AMA, then they would have to limit their overall profits and revenues.

STL Pil. whatever your lawyer told you and whatever you relate here may or may not be the same. The true basic fact is that as an "Unrelated Business" the magazine, Model Aviation will be taxed on the profits of advertising over the cost of producing those advertisements. The remainder is AMA expense of the "newsletter".

That is how the "newsletter" staff is accounted for under AMA staff, and not under the "Unrelated Business".

There is no limit to the money earned with "unrelated business income" as long as the FI tax is paid.
The fallacy here is that too many people worry about paying that tax. Now it is common for people to reduce their Tax Liability to the lowest possibility and that is good business. NBD! However one must file and declare or the tax man will visit thee.

HOWEVER when it gets to the point where one refuses to earn his/her keep and simply remain on welfare, expecting FOR ME TO PAY THEIR KEEP, then I am going to voice an objection to their selected method of tax avoidance!

If AMA was paying considerable $$$$ FIT each year from their earnings from this MA "newsletter", MA. formatted as a commercial magazine , then AMA would be also showing a NET Earning from MA. In such case, Viva el FIT.

_____________________________

Horrace Cain.
AMA Life L-93, Leader and CD for 45 years
Official Candidate: AMA Ex. Vice Pres. Vote H. Cain. Help move AMA into 21st Century
The only source of knowledge is experience. Albert Einstein

(in reply to STLPilot)

Post #: 34

RE: AMA"s MA again loses $$$ - 5/19/2007 7:20:43 AM

STLPilot

Posts: 9110
Joined: 3/12/2003
From: Manhattan, NY, USA
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quote:

ORIGINAL: Hossfly

quote:

ORIGINAL: STLPilot

I just called my lawyer and he told me that MA can pull in about 25% of non related business income to their total income. Anything over 25% they just have to pay income tax on the profit, so MA can run as many ads as they wish since no matter how many ads they run it will be well below 25% their annual revenues. He also informed me that many 501C3's can get away with as much as 50% non related total income and still maintain their status.

If MA was a standalone unit and was not umbrellaed under the AMA, then they would have to limit their overall profits and revenues.

STL Pil. whatever your lawyer told you and whatever you relate here may or may not be the same. The true basic fact is that as an "Unrelated Business" the magazine, Model Aviation will be taxed on the profits of advertising over the cost of producing those advertisements. The remainder is AMA expense of the "newsletter". That is how the "newsletter" staff is accounted for under AMA staff, and not under the "Unrelated Business".

There is no limit to the money earned with "unrelated business income" as long as the FI tax is paid.
The fallacy here is that too many people worry about paying that tax. Now it is common for people to reduce their Tax Liability to the lowest possibility and that is good business. NBD! However one must file and declare or the tax man will visit thee.

HOWEVER when it gets to the point where one refuses to earn his/her keep and simply remain on welfare, expecting FOR ME TO PAY THEIR KEEP, then I am going to voice an objection to their selected method of tax avoidance!

If AMA was paying considerable $$$$ FIT each year from their earnings from this MA "newsletter", MA. formatted as a commercial magazine , then AMA would be also showing a NET Earning from MA. In such case, Viva el FIT.

So are you suggesting that the AMA keeps their ad rates down to satisfy the taxman? If so, that wont happen until MA breaks $1 over net, we both agree with this. Even if you include the MA liason's in Muncie and then add a few hundred grand of cash from who knows where you still won't be over breaking even. So how could you possibly think that the AMA keeps these employees under the related business end just to avoid paying taxes? Also Hoss what your suggesting, by the AMA actions as you described, is illegal. Do you honestly think the AMA would do something so blatantly stupid? Also there is plenty of room for the MA to make a lot more money from ads and include the MA Muncie employees if they wanted, they just can't.

Fact of the matter is that know matter what most think in this forum the AMA must keep Model Aviation. That magazine is the backbone of the AMA. Like I said before it is the only thing that shows up on your door each month. You think the AMA is the only NFP who publishes a magazine for members included in dues, is not subsidized by those dues. Sorry to say Hoss but most NFP's that produce a magazine are in the exact same boat as the AMA. It's part of your membership dues and no matter how hard the AMA tries they will never break even, there is no chance of that happening now. You are talking about ad rates to move to more then double of what they are right now and if that happens you'll lose 3/4 of the advertisers because those rates are not in their budgets. OF course you'll keep Tower, Chief and Horizon, those guys won't go anywhere, but you'll lose most. You just need to accept this Hoss and let it be. There are a lot of people out there that actually enjoy the magazine. This forum is a minority of a minority. If the magazine simply gets pulled from this org, you'll see memberships decline faster then this org has ever seen.

< Message edited by STLPilot -- 5/19/2007 4:26:33 PM >

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Here At The Wall

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Post #: 35

RE: AMA"s MA again loses $$$ - 5/20/2007 12:29:54 AM

Hossfly

Posts: 3770
Joined: 12/3/2001
From: New Caney, TX, USA
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quote:

stl;
So are you suggesting that the AMA keeps their ad rates down to satisfy the taxman? //snip//

There is nothing in my postings to evidence any such suggestion.

quote:

Also Hoss what your suggesting, by the AMA actions as you described, is illegal. Do you honestly think the AMA would do something so blatantly stupid? //snip//

I have no idea what you are speaking of STL. Why do you LIBEL me as I would never suggest anything illegal for AMA? That would not be very smart of me.

quote:

You just need to accept this Hoss and let it be.

Could be, however YOU, SIR, are NOT going to convince me to let it rest. Perhaps such works both ways. I accept that I cannot change your opinion, and I will no longer answer to your posts and YOU accept that YOU cannot change my opinions and YOU no longer answer to my posts. That will save us both time and labor and RCU some bandspace.
Can you AGREE to that?

_____________________________

Horrace Cain.
AMA Life L-93, Leader and CD for 45 years
Official Candidate: AMA Ex. Vice Pres. Vote H. Cain. Help move AMA into 21st Century
The only source of knowledge is experience. Albert Einstein

(in reply to STLPilot)

Post #: 36

RE: AMA"s MA again loses $$$ - 5/20/2007 10:12:35 PM

JPMacG

Posts: 1155
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From: Ivyland, PA, USA
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So why the assumption that members do not want to view the magazine on the AMA website rather than receive a printed copy? I for one would prefer an electronic version, even if it did not save money. Is it possible to do both and leave the choice to the individual member?

< Message edited by JPMacG -- 5/20/2007 10:13:16 PM >

(in reply to Hossfly)

Post #: 37

RE: AMA"s MA again loses $$$ - 5/20/2007 11:29:16 PM

STLPilot

Posts: 9110
Joined: 3/12/2003
From: Manhattan, NY, USA
Status: offline

quote:

ORIGINAL: JPMacG
So why the assumption that members do not want to view the magazine on the AMA website rather than receive a printed copy? I for one would prefer an electronic version, even if it did not save money. Is it possible to do both and leave the choice to the individual member?

There are several ramifications in offering that solution. For one thing no matter what anyone thinks advertisers pay what they can to be in MA and the AMA has 0 control over it. If you start setting up MA as an opt in/out then you'll lose advertisers right off the bat just because MA has the feature installed even before the opt out's begin. Then for every opt out you have, you'll just continue to lose more and more advertisers. MA has so many advertisers only because of the guarantee that 160,000 members will get it every month. Now what happens next is production costs rise. The more your circulation, the lower your production costs are. So those are 2 of the most popular ramifications in setting up your mag as an opt in/out and there are more.

I'm pretty sure the AMA has thought about it. I'm sure they thought a lot about a lot of things, but I don't think opt out will solve it. It's either an all or none solution as opt in/out is a huge risk and this is why you don't see too many offering this solution. Unless the AMA had a great online presence, something that rivaled RCU, then maybe they could offer something in the way of a combo deal for advertisers, but it would have to be real hot, right now AMA website is pretty lame, they would have to invest a lot to get the kind of traffic RCU gets.

You know I noticed on the EAA's website on the sign up page it says right in bold lettering, half of your membership goes to the EAA membership and the other half goes towards a magazine. And their ads go for 5x as much as MA goes for with the same circulation. Honestly I've never heard a single EAA member complain about it. Why would they, then enjoy their building and flying their planes more then wondering how and if the EAA is screwing them. I have no idea what the dilio is amongst AMA members thinking that their dues should not go towards the magazine and it should be self sustaining, especially in this niche market.

< Message edited by STLPilot -- 5/20/2007 11:56:33 PM >

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