Bill:

It has come to my attention that there is a proposal that would reduce
the number of copies of Chess Life distributed to the membership.
Although I appreciate the board's desire to cut expenses in these
trying economic times, this idea is a bad one for several reasons.

Without the magazine arriving each month, any stimulus for members to
become more active, participate in chess events, follow the goings-on
in American chess, not to mention purchase chess books and equipment
from their national federation, will slowly but surely erode. The
identity of the USCF will be at risk, becoming only the custodian of a
chess rating system, not the face for the history and culture of
chess. A monthly publication encourages a sense of community, an
affiliation with others which a bare bones organization can never hope
to achieve.

It will also reinforce the perception, real or otherwise, that the
weakened financial position of the USCF is only getting worse. This
will hardly be a situation that will encourage more people to join or
renew.

There are several ways to deal with declining revenues. Attempts may
be made to cut expenses, increase revenues, or seek somehow to combine
the two. It seems to me that the emphasis should be on increasing
memberships, and therefore revenues. The real problem facing the USCF
is that memberships are either declining or at best, remaining
stagnant.

The decline or stagnation of core memberships should be the real
concern, for regardless of any steps taken to cut expenses, such
measures are bound to fail if the number of members continues to
decline.

From the point of view of retail sales to USCF members, this is
another discouraging development. We have already had to bring in
legal counsel as a result of what I considered an egregious material
breach of the agreement relating to a secret arrangement with the
House of Staunton. For over a year, the USCF was paid by the House of
Staunton to include promotional material to new members, including but
not necessarily limited to discount coupons, which promoted and
directed new members to patronize the House of Staunton.

Considering that the group of new members has historically and
demographically been the highest spending group per capita for retail
sales, this clandestine arrangement was particularly appalling. This
strategy was short sighted, seeking quick gains in ad revenues and
overlooking potential deep losses in sales revenues. This purchasing
pattern of new members was known, or should have been known by the
USCF when entering into this arrangement with the USCF, and it almost
certainly was known by the House of Staunton.

When a letter from our attorney demanded that this cease and desist,
not only did it continue (and my information is that it continues to
this day), we did not even get the courtesy of a response. Nothing at
all. Be advised that matter is still very much active, pending the
results of legal research that is still ongoing.

Now it appears that one of the significant vehicles for USCF Sales to
promote and market books and equipment is being reduced, perhaps even
eventually eliminated. There seems to be no regard or even realization
that this may have the effect of rendering the USCF brand worthless as
USCF Sales tries to promote retail sales on behalf of the federation.
USCF Sales relies on the ability to reach members with catalogs that
are bound into Chess Life as well as monthly advertisements in Chess
Life. Equally discouraging is the USCF's inability to understand and
appreciate the value of Chess Life to the chess community.

To my knowledge, there is no member of the board, or any officer, who
has any meaningful retail sales experience or marketing skills. Yet
the board appears to take steps – intentionally or unintentionally, it
hardly matters which – to undercut the efforts of USCF Sales to sell,
promote and market on behalf of the USCF, while of course it
simultaneously deplores the decreasing revenue sales generated and
assumes that these actions should have no bearing on minimum
guarantees or other indicia of performance. In fact, these actions
have the effect of gutting some of the core provisions of an agreement
that is already is under pressure.

As the discussions about what to do with Chess Life and memberships
continue, I felt I should weigh in on the matter. It is distressing
that after more than four years of handling the retail sales for the
USCF the relationship seems more adversarial than one of partnership.
I understand that there will be those who will genuinely disagree and
there will be those who will want to simply "circle the wagons,"
rejecting any contrary views as they promote a personal agenda.

I am reminded of the one-liner that a camel is really a horse designed
by committee. I fear the same is going on here with the redesign and
restructure of the USCF, albeit by those who may mean well. Please re-
think the proposed changes in Chess Life. If implemented, these
changes will be essentially irrevocable. Consider hiring someone who
has professional marketing and public relations experience with other
organizations. Focus on reversing membership trends. I have been a
member of the USCF for over 45 years and have actively supported it at
all times. I very much want to see it continue and flourish.

Regards,

Hanon