On 31 Mar 2004 05:12:43 GMT, (HAASpittle) wrote:

"Are you the infamous RSHaas? Is this your new screen name? Does the word Mensa
mean anything to you? (Sam Sloan)
============
Sam, yes, HAASpittle is RSHaas. It is a screen name I've used fairly often
here, so it isn't exactly new.
Meanwhile, if you are elected to the EB you won't have any great effect
because (1) there isn't much left to work with, and (2) you have no unique
ideas. That puts you on the same level as the other candidates.

Haas

It is true that I do not have any unique ideas. I am saying that we
should go back to the old ideas which were successful. In 1999, the
LMA had two million dollars in it. Now, there is nothing left. I
downplayed the losses, because I did not want to shock the voters. Our
actual losses are closer to two million than one million. How did we
get that two million dollars, the money which has now vanished? We got
it primarily by selling chess books and equipment. We were selling
$3.5 million per year in 1999. Then Stupid Redman decided to cut back
on that business. Sales dropped to less than two million. It was going
to go to zero, if DeFeis had not been fired. Now, the Tim "Sell My
Chess Trivia Game or Else" Hanke Gang tried to give away the business
to somebody in England for free, no money, no guarantees. That deal,
in my opinion, would have been illegal, without delegate approval.
That means jail time for Tim. The delegates have not approved or even
been notified of the current deal, either. Boy will they be Mad as
Hell when they find out, but at least it is a much better, if flawed,
deal and perhaps we can get a reduction for Tim down to time served.

Sam Sloan

Sam Sloan wrote:


It is true that I do not have any unique ideas.

That statement is not likely to get you elected...

I am saying that we
should go back to the old ideas which were successful.

Like the money we were losing on books and equipment?

In 1999, the
LMA had two million dollars in it. Now, there is nothing left. I
downplayed the losses, because I did not want to shock the voters.

Far be it from Sam to shock anyone...

Our
actual losses are closer to two million than one million. How did we
get that two million dollars, the money which has now vanished? We got
it primarily by selling chess books and equipment. We were selling
$3.5 million per year in 1999. Then Stupid Redman decided to cut back
on that business. Sales dropped to less than two million. It was going
to go to zero, if DeFeis had not been fired. Now, the Tim "Sell My
Chess Trivia Game or Else" Hanke Gang tried to give away the business
to somebody in England for free, no money, no guarantees. That deal,
in my opinion, would have been illegal, without delegate approval.
That means jail time for Tim. The delegates have not approved or even
been notified of the current deal, either. Boy will they be Mad as
Hell when they find out, but at least it is a much better, if flawed,
deal and perhaps we can get a reduction for Tim down to time served.

Your continued attacks on Tim do not help your credibility. Tim may or
may not be a great asset to the current board, but from all accounts
that we have seen, he appears to have their support, or at least their
appreciation.


John

On Wed, 31 Mar 2004 10:08:09 -0500, John A Swartz
wrote:


Sam Sloan wrote:


It is true that I do not have any unique ideas.

That statement is not likely to get you elected...

I am saying that we
should go back to the old ideas which were successful.

Like the money we were losing on books and equipment?

I am glad you asked this question, because this one I can hit out of
the ball park.

In 1999, our sales of books and equipment were $3.5 million. The book
business is highly profitable, with wide margins. I am the president
of a book publishing company. It costs us $2 per book to print a book,
and then we sell it for $20. That is a 1000% markup.

The only problem is that most books do not sell. Book publishers go
out of business because they publish books which so not sell.

The USCF does not have this problem. They have the sales. Only a
complete incompetent would lose money on a book business with $3.5
million in sales. Unfortunately, that is exactly what we have had at
the USCF, complete incompetents. The solution is not to get rid of the
business, but to fire the incompetents and hire somebody who knows how
to run the business.

Sam Sloan

And now that the USCF has signed a deal with ChessCafe.com, what would
you have the USCF do? Back out of the deal? At what cost?

John

Sam Sloan wrote:
On Wed, 31 Mar 2004 10:08:09 -0500, John A Swartz
wrote:


Sam Sloan wrote:



It is true that I do not have any unique ideas.

That statement is not likely to get you elected...


I am saying that we
should go back to the old ideas which were successful.

Like the money we were losing on books and equipment?


I am glad you asked this question, because this one I can hit out of
the ball park.

In 1999, our sales of books and equipment were $3.5 million. The book
business is highly profitable, with wide margins. I am the president
of a book publishing company. It costs us $2 per book to print a book,
and then we sell it for $20. That is a 1000% markup.

The only problem is that most books do not sell. Book publishers go
out of business because they publish books which so not sell.

The USCF does not have this problem. They have the sales. Only a
complete incompetent would lose money on a book business with $3.5
million in sales. Unfortunately, that is exactly what we have had at
the USCF, complete incompetents. The solution is not to get rid of the
business, but to fire the incompetents and hire somebody who knows how
to run the business.

Sam Sloan

On Wed, 31 Mar 2004 11:11:44 -0500, John A Swartz
wrote:

And now that the USCF has signed a deal with ChessCafe.com, what would
you have the USCF do? Back out of the deal? At what cost?

John

No. I am not saying that we should back out of any deal. I am not
aware that the USCF has signed a deal yet. If they have signed, I will
need to read it. After I have read it, then I can comment on it.

However, the membership and the delegates have not yet been informed
even of the plans to jettison the books and equipment business. They
will learn about it for the first time when they read my candidates
statement. When I was collecting my signatures to run for Executive
Board, I asked many members if they knew about this. None of them, not
even one, knew about it.

I am just trying slowly to bring them up do date. I did not want them
to know that we have lost two million, so I gave them the more
comforting news that we have only lost one million.

Sam Sloan

On Wed, 31 Mar 2004 10:08:09 -0500, John A Swartz
wrote:


Sam Sloan wrote:


It is true that I do not have any unique ideas.

That statement is not likely to get you elected...

I am saying that we
should go back to the old ideas which were successful.

Like the money we were losing on books and equipment?

In 1999, the
LMA had two million dollars in it. Now, there is nothing left. I
downplayed the losses, because I did not want to shock the voters.

Far be it from Sam to shock anyone...

Our
actual losses are closer to two million than one million. How did we
get that two million dollars, the money which has now vanished? We got
it primarily by selling chess books and equipment. We were selling
$3.5 million per year in 1999. Then Stupid Redman decided to cut back
on that business. Sales dropped to less than two million. It was going
to go to zero, if DeFeis had not been fired. Now, the Tim "Sell My
Chess Trivia Game or Else" Hanke Gang tried to give away the business
to somebody in England for free, no money, no guarantees. That deal,
in my opinion, would have been illegal, without delegate approval.
That means jail time for Tim. The delegates have not approved or even
been notified of the current deal, either. Boy will they be Mad as
Hell when they find out, but at least it is a much better, if flawed,
deal and perhaps we can get a reduction for Tim down to time served.

Your continued attacks on Tim do not help your credibility. Tim may or
may not be a great asset to the current board, but from all accounts
that we have seen, he appears to have their support, or at least their
appreciation.


John

What you probably do not realize is that I know Tim Hanke far better
than anyone on the board. I have been exchanging emails with Tim Hanke
since 1994. That is ten years of emails from Hanke. Most of the board
members had never even heard of Hanke until he ran for election in
2003 and none of them had met him in person until after he was elected
and showed up for the first time at the USCF meetings in Los Angeles
in August 2003.

I believe that by now all of the board members realize that Tim Hanke
is just a nut, but at the same time he holds a swing vote on a five
member board. One board member, Steve Shutt, is completely against the
changes that are being made. Tim Hanke has a volitile and explosive
personality. We see that at the meetings. If he turns against the
coalition that is controlling the USCF right now, their control of the
USCF might collapse, and so they have no choice but to say nice things
about him and to mollify him.

Sam Sloan

Sam wrote:
of a book publishing company. It costs us $2 per book to print a book,
and then we sell it for $20. That is a 1000% markup.

The USCF is for the most part not a PUBLISHER of books, it is a retailer
of them. You buy the books at a discount, usually in the general
neighborhood of 40-50%. (The major chains get a better discount, but
they also buy tens of thousands of copies of many titles.)

Marketing, sales and fulfillment costs have to be covered out of that
discount, as well as general and administrative overhead.

Yes it is probably true that the B&E equipment was largely responsible
for the buildup of the LMA over a 10 or so year period (from the mid 80's
to the mid 90's), but that's history not current events. A lot has
changed in the last 10 years, and quite honestly the USCF didn't keep
up with the crowd or adapt to a changing reality.

The drastic steps taken in the past 9 months have been painful to be sure,
especially to former and about-to-become-former USCF employees, but serious
action was needed. That's the result of a decade (if not longer) of USCF's
leadership believing what they hoped was true rather than facing reality.

Was the B&E operation salvageable? IMHO probably so, but maybe not by
the time the current Board took office last August. I think a reorganized
B&E operation could have netted the USCF something in the general
neighborhood of about 5% on sales after expenses. I think the USCF
could wind up netting about the same if not more than that under the
Hanon Russell deal.

As a result, I think most Delegates will conclude that the USCF cut a
pretty reasonable deal with Hanon Russell, and I think USCF members will
be pleased with the new USCF sales web page when it goes live tomorrow.
--
Mike Nolan

"Sam Sloan" wrote in message
...
On Wed, 31 Mar 2004 10:08:09 -0500, John A Swartz
wrote:


Sam Sloan wrote:


It is true that I do not have any unique ideas.

That statement is not likely to get you elected...

I am saying that we
should go back to the old ideas which were successful.

Like the money we were losing on books and equipment?

I am glad you asked this question, because this one I can hit out of
the ball park.

Foul Ball!


In 1999, our sales of books and equipment were $3.5 million. The book
business is highly profitable, with wide margins. I am the president
of a book publishing company. It costs us $2 per book to print a book,
and then we sell it for $20. That is a 1000% markup.

You quote a single figure from your publishing business. This is the markup
on the PP&B only. You exclude any costs associated with intellectual
rights, marketing, editiorial, production labor, fulfillment, and overhead.
Book publishing is a difficult market when dealing with specialty products,
because the capitalized costs of initial production are large in comparison
to the total revenue from a small sales run. Add to this the cash flow
dynamics that place significant outflows all at the beginning of a product's
life, and you end up with a business that requires significant care with
respect to financial management.


The only problem is that most books do not sell. Book publishers go
out of business because they publish books which so not sell.

More specifically, successful book publishers go out of business when the
market changes, but they continue to publish books as if they will achieve
the same sales levels.


The USCF does not have this problem. They have the sales.

USCF's B&E business is a catalog retail business. It is not a publishing
operation. The comparison to the simplified financial statement above is
for a completely different type of business. The financial challenges of
the B&E business are inventory management, marketing, and efficient
fulfillment and overhead.

Only a
complete incompetent would lose money on a book business with $3.5
million in sales.

The timeframe associated with the decline of the B&E business coincides with
the growth of internet sales. Specialty B&M retail has been severely
impacted by this because of the low overhead, large market model of internet
specialty sales. Whereas USCF B&E was once the preferred vendor for many
chess players, competition arose and undermined that business. USCF did not
respond to that competition in a changing market. Why that occurred is
water under the bridge and is largely immaterial in the changed environment.
It is overly simplistic to suggest that we could just go back to what we
were doing before.


Unfortunately, that is exactly what we have had at
the USCF, complete incompetents. The solution is not to get rid of the
business, but to fire the incompetents and hire somebody who knows how
to run the business.

First, it is no longer the same business. The business model and
environment changed. Second, to recover that business requires an infusion
in operating capital. From where to you propose to generate that capital?
You have stated that you are opposed to selling the building, which would be
a source for that capital. Your sole response to Nolan's question as to how
you would increase membership is to lower fees by roughly 20% for adults and
to eliminate the kiddie discount membership. Since the kiddie discount is
tied to marginal publishing expenses of the mag, this is theoretically a
push regarding contribution to overhead.

What you are left with is a 20% discount for adult membership. Current
practice has been targeted promotional discounts, aimed at recovering lapsed
members and generating immediate cash (early renewal to offset cash flow
shortfalls). A 20% discount for members who are willing to pay the $49 is
leaving much needed money on the table. Where is the working capital
surplus of this that you would use to fund a revived B&E business?

Batter up!

David

--
without the block

On 31 Mar 2004 16:56:49 GMT, (Mike Nolan) wrote:

Sam wrote:
of a book publishing company. It costs us $2 per book to print a book,
and then we sell it for $20. That is a 1000% markup.

The USCF is for the most part not a PUBLISHER of books, it is a retailer
of them. You buy the books at a discount, usually in the general
neighborhood of 40-50%. (The major chains get a better discount, but
they also buy tens of thousands of copies of many titles.)

Marketing, sales and fulfillment costs have to be covered out of that
discount, as well as general and administrative overhead.

Yes it is probably true that the B&E equipment was largely responsible
for the buildup of the LMA over a 10 or so year period (from the mid 80's
to the mid 90's), but that's history not current events. A lot has
changed in the last 10 years, and quite honestly the USCF didn't keep
up with the crowd or adapt to a changing reality.

The drastic steps taken in the past 9 months have been painful to be sure,
especially to former and about-to-become-former USCF employees, but serious
action was needed. That's the result of a decade (if not longer) of USCF's
leadership believing what they hoped was true rather than facing reality.

Was the B&E operation salvageable? IMHO probably so, but maybe not by
the time the current Board took office last August. I think a reorganized
B&E operation could have netted the USCF something in the general
neighborhood of about 5% on sales after expenses. I think the USCF
could wind up netting about the same if not more than that under the
Hanon Russell deal.

As a result, I think most Delegates will conclude that the USCF cut a
pretty reasonable deal with Hanon Russell, and I think USCF members will
be pleased with the new USCF sales web page when it goes live tomorrow.
--
Mike Nolan

Dear Mike,

I agree with your major points, which a

1. Most of the money that was put into the LMA came from profits in
the books and equipment business.

2. The USCF failed to keep up with the latest technology and therefore
lost money when it should have made money.

3. The deal we got from Hanon Russell is a good deal, probably the
best deal of that kind we could get.

On the other hand, the deal we were supposed to take from the guy in
England was a terrible, awful deal and yet one board member is still
miffed that it did not go through.

In addition, there are no safeguards or backups. If after one or two
years, Hanon Russell finds himself unable to pay the $350,000 per year
he has promised, what is our backup? What is our Plan B? In short, we
will be finished, with no way out.

Sam Sloan

(Sam Sloan) writes:

1. Most of the money that was put into the LMA came from profits in
the books and equipment business.

Yes, but Al Lawrence has stated on numerous occasions that the membership
department was covering ALL the overhead during those years. Had USCF
been treating it as an isolated profit center and allocating administrative
and overhead costs, B&E would not been showing nearly as much profit.

In addition, there are no safeguards or backups. If after one or two
years, Hanon Russell finds himself unable to pay the $350,000 per year
he has promised, what is our backup? What is our Plan B? In short, we
will be finished, with no way out.

Life is kind of like that, Sam. The only guarantee you get is that you
won't get out of it alive.

As I understand it, Hanon will be paying an allocated percentage on a
regular basis (weekly?), with an annual reconciliation against the guarantee.

I see this deal has having far fewer downside risks than running our own
B&E operation did, though also with not as much upside potential. In fact,
I think it would make an interesting writeup for the Harvard Case Study
library. That'd probably annoy Hanon, a Yale grad. :-)

BTW, a contract WAS signed a number of days ago, all the parties went to
the USCF's attorneys offices to do the honors. (Hanon's too good an
attorney to be putting in the kind of up-front investment he's making
in software and other capital costs without a signed deal.)
--
Mike Nolan