ECF Council meeting - other revelations

[Angus French]

Nigel Short's report now disusses the legal action against FIDE. He had rather remarkably omitted to mention it in his report last October, despite lambasting Kirsan over other matters, but with the cat out of the bag he assures us that no ECF money is at stake:

"....The ECF Board considers the upholding of the rule of law in FIDE to be of the greatest importance, which is why (along with the Georgian Federation) we brought the case.

Our primary responsibility is to our members and, to ensure that no legal costs will be borne by the Federation, we have been indemnified by a third party. All legal fees have thus far been paid.

The CAS judgment is expected before the end of March. I hope to have more to say then."

I raised my eyebrows at "Our primary responsibility is to our members". It is nice to know that the action was taken because the rank and file of the ECF are concerned about rule of law issues in FIDE and not because Kirsan's Presidency is a private hobby horse of CJ and Short, following up from their part of the failed campaign in Russia; but if they were primarly responsible to us (!), wouldn't they have told us what they were doing?

When Nigel does return to the topic, it would be nice to know why only two members of FIDE are involved. Surely when the ECF Board agreed on this, it envisaged being part of a much wider coalition? And since there seems to be little chance of Kirsan being stripped of his Presidency, isn't the main effect of this to drain the FIDE coffers, meaning - at least, so Kirsan will say with some credibility - that money earmarked for chess will be spent on lawyers?

Not only did Nigel Short's written report to last October's AGM not mention the FIDE law suit but nor did Nigel when he spoke at the AGM and was quizzed about the ECF's working relationship with FIDE. This was a discussion which lasted, if I recall, quite a few minutes and something about which Peter Wilson (who initiated the discussion) seemed to be exercised. Couple this with CEO's statement (from his report for the Finance meeting) - "The Board should have advised Council of its decision at the Finance Council meeting in April 2011 or, having failed to do so, at the AGM six months later. That this did not happen was due to an oversight, for which I apologise. There was no intention to hide this matter from Council – it was genuinely overlooked" and I'm rather incredulous. That said, the ECF couldn't possibly hope to keep the matter quiet, could it?

Mike Truran is critical of the situation in his report. He's obviously concerned that the ECF may have taken on some legal liability - if the underwriting third party defaults? - and feels that this should have been declared in the accounts.

Are there any financial costs which the ECF is taking on - for example, will it cover the cost of Nigel Short's attendance at the CAS hearing in Lausanne?

What amount of effort from board members has been expended on this matter?

[Roger de Coverly]

Mike Truran is critical of the situation in his report. He's obviously concerned that the ECF may have taken on some legal liability - if the underwriting third party defaults? - and feels that this should have been declared in the accounts.

I read it slightly differently. There is a general requirement for Companies to disclose outstanding legal actions even where the directors consider the action has no merit or no cost. In the absence of disclosure, the auditors were not given the opportunity to challenge the "no cost" assertion.

[Roger de Coverly]

That said, the ECF couldn't possibly hope to keep the matter quiet, could it?

That is the impression given. With a brief AGM debate about the ECF's relationship with FIDE, it would have been an ideal opportunity for any of the directors to remind Nigel about the legal action and ask for an update.

It's been a long running issue that ECF directors and BCF ones before that complain that they aren't trusted by Council. Is it in any way a surprise?

[John Philpott]

Roger de Coverly wrote

The voting register is the "name and shame" document as it appears the London League and Middlesex have left the ECF.

Organisations are shown as lapsed where the Game Fee payment due has not been received by the ECF. Publication of the register can act as an incentive to pay the arrears, which generally arise from an oversight (which is certainly the case with one of the two organisations that Roger names with which I have been in contact) rather than a decision to leave the ECF. The Board often restores voting rights to organisations paying their arrears on the morning of the Council meeting.

[Alex Holowczak]

I appear to have edited a post, rather than quoted it. Oops...

Just had an e-mail from the Office. As if by magic ... *ding* ... The London League Game Fee payment appeared.

[Roger de Coverly]

How can non-members playing an average of three games be expected to generate £9 - £3 per non-member per game - in revenue? This surely doesn't fit with: proposed game fee rates of £2 or £1 for standard games and £1 or £0.50 for rapidplay games; and, a proposed pay-to-play fee for Congresses of £6.

The need to set fees and budgets is not restricted to the ECF. Local counties and leagues will also face budget and fee issues.

I reckon they are faced with three alternatives or elements mixed from all of them

(a) they can carry on as before, accepting that Game Fee has increased from 58p to (probably) £ 2 but capped at £ 12 per head if they are prepared to make people members without their consent. This is the approach the ECF seems to be assuming they will take.

(b) they can take steps to remove wholly or partly their events from ECF grading.

(c) they can take steps to ban or restrict non-members from taking part.

Both (b) and (c) would most likely reduce the volume of graded chess being played.

Depending on what the local county or league decide, clubs will have the same issues. Will match captains prefer to default, rather than incur financial penalties for fielding non members? Will match captains even be prepared to run teams under those rules?

Aggressively membership only areas like Cleveland already apply (c). Other sports similarly.
The ECF CEO is however on record as saying that such restrictions are not the intention of the membership scheme. They are, however, the likely effect.

[John McKenna]

Roger de Coverly>... If the calculations and invoicing don't take place until August 2013, how can you bring that in to the 2012 - 13 financial year, particularly if it has a year end of 30th April? According to the Finance Committee report, they had enough trouble this year with events taking place in April and settling in May. Having a year end reporting process that doesn't start until 4 months after the year end is asking for trouble.<
John Philpott >One of many reasons why the change to a 31 August year end suggested by the Finance Director makes a lot of sense.<

John McKenna >Hope everyone recognises that the Coalition government persuaded the ECF to release a blizzard of financial & policy papers today in order to distract from the real emperor's-new/no-clothes budget perpetrated by George a little earlier.
Or could it be that I've got it the wrong way round? The ECF may be using George as a fig leaf to try to cover what's going down in the chess area!<
John Philpott>Definitely the former. The date on which the ECF papers would be published was known as soon as the Finance Council meeting date was set last October, and the Coalition doubtless scheduled the budget accordingly.<

The above answers, given by John Philpott, imply that changing the ECF's financial year end from 30 April to 31st Aug. would have a beneficial effect for accountancy purposes and, hopefully, avoid the release of very important information on the same day the Chancellor of Exchequer delivers the budget. The Coalition has withdrawn its DCMS grant so there is no need to ape them in grandstanding or inadvertently use them as a smokescreen by joining in on the same day. Surely, as company sec., Mr Philpott could easily have scheduled the release a little earlier or later?

[Angus French]

Has this been mentioned: shouldn't the Funding Calculation s/sheet include allowances for service provider fees for online payments?

[Roger de Coverly]

Has this been mentioned: shouldn't the Funding Calculation s/sheet include allowances for service provider fees for online payments?

It hasn't as far as is visible, but then you wouldn't expect it to be. As we are told, it's immensely expensive to collect a few hundred Game Fee payments, and immensely cheap to collect several thousand individual membership payments. At least they've reinstated three year memberships, so as not to waste an individual's time more than once every three years.

[Tim Spanton]

Has this been mentioned: shouldn't the Funding Calculation s/sheet include allowances for service provider fees for online payments?

It hasn't as far as is visible, but then you wouldn't expect it to be. As we are told, it's immensely expensive to collect a few hundred Game Fee payments, and immensely cheap to collect several thousand individual membership payments. At least they've reinstated three year memberships, so as not to waste an individual's time more than once every three years.[/quote]


They weren't available when I recently renewed

[Roger de Coverly]

They weren't available when I recently renewed

They (multi year memberships) were available back in November, so must have disappeared since then. They weren't originally part of the Bronze/Sliver/Gold proposals but have re-appeared in an updated document amongst the Finance Council papers.

[Angus French]

Angus French wrote

I didn't know that multi-year memberships would be available. They're not covered in the Membership Rates proposals document.

They will be in v2 of the document which should be appearing shortly.

v2 has appeared and gives, for example, proposed three-year adult membership rates of: Gold £75, Silver £50, Bronze £35 (against corresponding single-year rates of £13, £19 and £28, each with a potential £1 discount)

I'm afraid I have some comments:
1. There's no proposal for a three-year adult Platinum rate - so Platinum members would presumably have to renew each year. (At first this seems a little odd, making that type of member go to more effort than others. Though perhaps it could be regarded as rational given that Premium members are, in part, making a donation and presumably not after a discount.)
2. There's nothing to say whether the type of discount which applies to single-year membership payments would also apply to three-year payments. If no discount applies to three-year payments then why would someone interested in a single year's bronze membership at £12 (after discount) be persuaded, instead, to buy three years of membership at £35? Actually a valid answer might be: to protect against price increases. And that leads to another question...
3. Is it sensible, at the moment, to offer reduced price memberships? If the take-up rate in year one is lower than hoped for then the impact of a subsequent hike in rates would be reduced.
4. And a practical point: if someone purchases a three-year bronze membership, would it then be possible to upgrade that membership to, say, silver in year one only (keeping bronze for years two and three)? If yes, then that would make the requirements for an automated membership system more interesting.

[E Michael White]

I didn't know that multi-year memberships would be available. They're not covered in the Membership Rates proposals document.

They will be in v2 of the document which should be appearing shortly.

It's not a good time to take out a 3 year subscription if you are a higher rate tax payer and believe that the ECF may obtain charitable status, as you could be worse off.

[Roger de Coverly]

It's not a good time to take out a 3 year subscription

I'm a bit sceptical that the ECF will be able to last three years in its proposed form. But it's intending to asset strip the BCF PIF, so it may still be there. It's making a really big assumption about behaviour going in its favour and being able to run its collection of money on the cheap.

On the low take up scenario, they assume they will get approaching £ 60,000 from the £ 1 / £ 2 Game Fee. That's money which would come via counties, leagues and junior associations. These organisations also set fees and budgets and I ask whether they are able to raise and pay that level of charge to the ECF without making changes to their relationship with the ECF or their players.

In the "low take up" scenario where only players playing 12 or more games become members, they assume 1000 Gold adults and 70 juniors. Then 2800 Silver adults and 1150 Silver juniors. To get those sorts of numbers for juniors, they would have to be assuming that all the junior events currently structured as individual events would remain so and that none would elect to charge "pay to play" at £ 6 a head. The same non election of £ 6 per head is applied to adults as well. At bronze level, they are assuming 1950 adults and 500 juniors. That leaves 3700 adults and 1100 juniors. They have assumed they will be able to collect £ 11.90 in respect of each. I would have thought it a highly optimistic assumption that if you cannot collect £ 12 as a per head charge, that you would be be able to get £ 11.90 as a substitution, particularly where the current collection is of the order of £ 3 or £ 4 a head. In terms of head count, I suppose you can believe the 1000. It exceeds the number of active players on the FIDE list, but that excludes players in the part rating waiting period. The 2800 adult Silver members implies with the Gold members, some 3800 players out of a total of 9450 adults playing at least one Congress or 4NCL. That seems like a high total to me, particularly as no attempt seems to have been made to filter out the non English players, where nothing is paid if confined to FIDE rated events and probably £ 6 per head at Blackpool, Scarborough and similar.

[Paul Cooksey]

The c16.10 Business Plan document refers to a Supplement to the Business Plan. I don't see it, is it published?