AMA Financial Transparency - Model Aviation Magazine - RC Groups
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Dec 23, 2017, 08:48 AM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
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AMA Financial Transparency - Model Aviation Magazine


I'm continuing to go through the AMA's IRS 990's so that members can have a better idea how OUR money is being spent and so we can evaluate how programs etc. are performing over time.

The attached chart shows the financial performance of Model Aviation Magazine as reported to the IRS by the AMA. Going back to , which shows that the magazine loses an average of $1.5 MILLION per year. To put that in perspective, here's something to consider. In 2015, the last year for which I've been able to get AMA's IRS 990, they gave $30,000 to clubs for flying site grants (note 1). That same year, as reported to the IRS, the AMA lost 44 times that much, $1,324,183, on the magazine (note 2). That loss eats up 13.5% of AMA's total revenue! (note 3)

For those members who have access to the AMA's self generated financial report, you'll note how that document presents to members a much rosier picture of expenses than what was reported to the IRS (note 4).

Questions we may want to ask:
- Is anyone being held accountable for this financial performance?
- Are members ok with a magazine that loses an average of $1.5 million, year after year after year?
- Do they have a plan to reduce the losses? If so, what is it?
- How long are members expected to tolerate this performance?

Note 1: http://amablog.modelaircraft.org/fly...ers-announced/

Note 2: Attached IRS 990, Part VIII line 2b minus Part IX line 24b : ($1,126,873 in revenue - $2,451,056 in expenses)

Note 3: Attached IRS 990, Model Aviation Loss divided by reported total AMA revenue page 1 line 12 ( $1,324,183 / $9,809,462 = 13.49% )

Note 4: THE ACADEMY OF MODEL AERONAUTICS, INC. AND AFFILIATE CONSOLIDATED AUDITED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2016 AND 2015 (see page 6, particularly note the difference in "expenses" reported to members vs. reported to IRS).
Last edited by franklin_m; Dec 23, 2017 at 09:09 AM. Reason: Added question, fixed typo, corrected percentage
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Dec 23, 2017, 10:02 AM
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I seem to recall something where the AMA is required to have something like a magazine or newsletter in order to maintain tax status. This was from back when we also had the SFA to choose from and their newsletter was printed in RCM magazine. Don't know if today an electronic version would be acceptable or not.
Dec 23, 2017, 10:13 AM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
Quote:
Originally Posted by KMK001
I seem to recall something where the AMA is required to have something like a magazine or newsletter in order to maintain tax status. This was from back when we also had the SFA to choose from and their newsletter was printed in RCM magazine. Don't know if today an electronic version would be acceptable or not.

It would be worth asking the question. Do they really have to lose a million and a half per year for a magazine when a printed newsletter would do?

When an organization’s revenue trends look like the AMA’s, it’s time they start asking some hard questions and challenging assumptions, or challenging “the way we’ve always done it.”
Dec 23, 2017, 10:23 AM
Registered User
Quote:
Originally Posted by franklin_m
It would be worth asking the question. Do they really have to lose a million and a half per year for a magazine when a printed newsletter would do?

When an organization’s revenue trends look like the AMA’s, it’s time they start asking some hard questions and challenging assumptions, or challenging “the way we’ve always done it.”
I'm sure a better solution could suffice. But it just wouldn't be the same old Pravda we've all come to know and love.
Dec 23, 2017, 10:40 AM
Registered User
I don't belong to AMA, but in this day and age, wouldn't an e-publication of their magazine be more cost effective?
Dec 23, 2017, 10:54 AM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
Quote:
Originally Posted by ssobol
I don't belong to AMA, but in this day and age, wouldn't an e-publication of their magazine be more cost effective?
Exactly. But they honestly don't like having anyone challenge "the way they've always done it." When I saw how much they spend on travel so EC members can meet face to face, I asked the question why couldn't they use go to meeting or similar technology to save some money. The AMA's executive director told me that was impossible because "they're required" (the meetings). When I challenged him that there was nothing in tax law or the bylaws that mandated face to face meetings, he responded with an emotional name calling email.
Dec 23, 2017, 12:35 PM
Registered User
Quote:
Originally Posted by franklin_m
Exactly. But they honestly don't like having anyone challenge "the way they've always done it." When I saw how much they spend on travel so EC members can meet face to face, I asked the question why couldn't they use go to meeting or similar technology to save some money. The AMA's executive director told me that was impossible because "they're required" (the meetings). When I challenged him that there was nothing in tax law or the bylaws that mandated face to face meetings, he responded with an emotional name calling email.
I don't recall the AMA having this "my way or the Hi Way" attitude back in the 60's or even 70's. But I've run into it with them a few times. Another reason why I renegade and don't contribute to their annual member paid for pilgrimages hither and yon.
Dec 23, 2017, 12:41 PM
AVP, District IV
RustyK's Avatar
Quote:
Originally Posted by ssobol
I don't belong to AMA, but in this day and age, wouldn't an e-publication of their magazine be more cost effective?

Model Aviation and Park Flyer have been on line for several years. I haven't had a paper copy since they went on line. Almost all back issues are online.

RustyK
AVP, D-IV
Dec 23, 2017, 01:18 PM
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Quote:
Originally Posted by RustyK
Model Aviation and Park Flyer have been on line for several years. I haven't had a paper copy since they went on line. Almost all back issues are online.

RustyK
AVP, D-IV
I would certainly think that the online version of the magazine would meet any requirements. Didn't they just get through expanding their costs by hiring an editor for the multi-rotor sections?
Dec 23, 2017, 01:46 PM
AVP, District IV
RustyK's Avatar
He has been with AMA several years.
Dec 23, 2017, 03:31 PM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
Quote:
Originally Posted by RustyK
Model Aviation and Park Flyer have been on line for several years. I haven't had a paper copy since they went on line. Almost all back issues are online.

RustyK
AVP, D-IV
I think the point was that when you're losing an average of $1.5 MILLION each year, maybe it's time to stick a fork in it ... the paper magazine
Dec 23, 2017, 03:42 PM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
Quote:
Originally Posted by jcmors
I would certainly think that the online version of the magazine would meet any requirements. Didn't they just get through expanding their costs by hiring an editor for the multi-rotor sections?
Total revenue is going down, but funny thing, they staff expense is staying constant (first chart). Worse yet, the executive compensation as a percentage of all AMA payroll more than doubled over the period 2002 - 2015 (second chart). Put another way, per AMA's IRS 990 filings, in 2002 the executive compensation was about 5.5% of the total salaries paid by AMA; by 2015, it was 13.7%. That's a significant change.

In the face of declining revenue, one would think they'd reduce the staff expense. Or stop the magazine that's bleeding $1.5 million a year. Or better yet, BOTH. But there I go again, thinking in a fiscally responsible way.
Last edited by franklin_m; Dec 23, 2017 at 04:41 PM.
Dec 25, 2017, 01:18 PM
Registered User
JohnsPop's Avatar
Quote:
Originally Posted by franklin_m
The attached chart
Shame when folks don't recognize color-blindness and use colors that some people can't tell the difference in. I've also had to return products that use red, green and amber status lights because I have no idea what the product's "status" is. (sigh) Carry on......

Ah..... the color combo on the Revenue vs. Salaries is better. I can see that one.
Last edited by JohnsPop; Dec 25, 2017 at 01:28 PM.
Dec 25, 2017, 01:42 PM
Commander, U.S. Navy (Ret.)
franklin_m's Avatar
Quote:
Originally Posted by JohnsPop
Shame when folks don't recognize color-blindness and use colors that some people can't tell the difference in. I've also had to return products that use red, green and amber status lights because I have no idea what the product's "status" is. (sigh) Carry on......

Ah..... the color combo on the Revenue vs. Salaries is better. I can see that one.
Here you go. Monochrome w/ different types of lines to show which is which...
Dec 25, 2017, 04:10 PM
Registered User
I don't think it particularly unusual for an association to print a magazine that "loses money". I am a member of several different associations, societies, non-profits, etc. that print a magazine with little or even no advertising, at a net cost to the entity.

In fact, one society that I am a member of prints a very nice full-color annual bulletin that is (by far) the largest single expense that organization has. But members like the bulletin and it continues. Many organizations/associations have begun the transition to E-content, but some members prefer a physical magazine.

I say be careful what you ask for. I have seen a couple of examples of formerly ad-less magazines converted over to a for-profit (or zero cost) model. The result is many more pages of advertising and much less content (assuming that model can be made to work at all).

My opinion is that an association publication like Model Aviation Magazine doesn't necessarily need to be a profit center for the association. It can simply be one of the products received with the membership dues.


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