Wichita River Festival loses money for fourth consecutive year
05/30/2013 6:01 PM
08/05/2014 8:45 PM
The Wichita River Festival, the community’s signature event, lost money this year for the fourth year in a row.
The festival has thrived or survived for 41 years, but in recent years, button sales have dropped and corporate sponsorships haven’t kept pace.
This year’s festival, held in June, netted about $500,000 from button sales, sponsorships, merchandise sales, vendors and entry fees. But overhead and administrative costs resulted in another loss for Wichita Festivals Inc., said the nonprofit’s president and CEO Janet Wright.
With the latest deficit projected at $85,000, “we’re not going to have too much left after this year” in the reserve, Wright said. “I doubt if there’ll be anything left in it.”
Wright and a national festival official blame the tough economic times.
“People are trying not to spend any more money than they have to,” Wright said. “I think it’s just lasted longer than we’d hoped it would last.
“We’ve tried everything we can to not cut back on good, quality entertainment. What’s changed is the public’s ability, or their decision, to support it.”
The festival corporation’s reserve, which varies each year, had approached $500,000 around 2007 or 2008, she said. As the losses mounted, the reserve fell.
“Now, it’s going to come down to hard decisions about what we can’t or can do next year, because it can’t continue,” she said.
Soon, the Wichita Festivals board will start discussing ways to improve the finances, said Wright, who last month announced that she will retire at the end of the year. Wright, 64, has held the position since 1999, the longest tenure for that job.
Riverfest “would really rather not increase the price of the button,” she said. Although people aren’t required to have one, they are supposed to buy a button and wear it while attending events.
As with corporate sponsorships, the buttons help cover expenses and are “a visual symbol of support” for the festival, she said. For the past seven years, the button price has remained at $5.
Richard Honeyman, the festival group’s board chairman, said there’s reluctance to raise the button price because “our philosophy is to make the Riverfest for everybody, and the lower the price of the button … the more people there are to participate.”
“One thing hasn’t changed, and that is the Riverfest is still exciting, it’s still fun and it’s still magical for a lot of kids … and adults,” Honeyman said.
The events include a zipline over the Arkansas River downtown, concerts, a competitive run, a food court, theatrical plays for adults and children, boating on the river, a parade and fireworks.
Still, the numbers show a decline.
Corporate sponsorships, which amounted to $677,750 last year, fell this year by about $90,000, Wright said.
The number of $5 buttons sold has dropped, from 126,151 in 2007 to 74,988 in 2012, according to Wright. Button revenue has fallen from $628,757 in 2008 to $455,310 in 2011, according to tax forms that Wichita Festivals filed. At $5 each, this year’s button sales would have brought in less than $375,000.
Although the button revenue might seem like a lot of money, it’s not nearly enough to cover expenses, which amounted to about $1.2 million this year, Wright said.
There is no gate to the sprawling festival, concentrated around the river in downtown Wichita, and some people slip in without buttons.
This year, Wright said, “We saw a ton of people without buttons on at free concerts, and that’s disheartening.”
The buttons help pay for all kinds of expenses, including portable toilets, which cost about $20,000. Other expenses include the cost of hiring bands, advertising, printing, and sound and lighting equipment.
“If people want it to be around, they have to understand that it can’t be free,” Wright said of Riverfest.
Attendance, which is roughly estimated, has been up and down, from 380,000 in 2007 to a low of 161,000 in 2010. That year, cold, rainy weather kept crowds down. Attendance went back up, to about 240,000 in 2011, and this year’s estimate is about the same, Wright said.
Some numbers come from IRS forms filed by Wichita Festivals, which also puts on the Autumn & Art event at Bradley Fair. Although the figures include the art festival and, in some previous years, a flight festival, the numbers mainly reflect Riverfest finances.
The IRS document, called a Form 990, shows net assets or fund balances, which includes the festival building and equipment along with remaining cash. Net assets, which averaged $723,235 from 2005 through 2011, stood at $544,808 last year. The low was $518,022 in 2010; the high was $1,095,448 in 2006.
The IRS form for 2012 is not yet available. Although Wichita Festivals provided information about this year’s finances, it declined to release a detailed report.
The economy has been hurting festivals across the country, said Steve Schmader, president and CEO of the International Festivals & Events Association, based in Boise, Idaho, of which Wichita Festivals is a member.
Although Schmader is hopeful the economy is turning around, some festivals have opted to skip a year or close for good.
It is a tragedy when a community festival pulls back or dies, Schmader said, because “in good times and bad times, that’s the thing that bonds people together.”
The economic impact plays out in many ways.
“People are not traveling as much,” he said. Even when they opt to have a “staycation” and go to a local festival, “they’re spending $50 where maybe they used to spend $100.”
Local banks have been among some of the biggest festival sponsors, but banks have taken financial and political hits and are backing away from spending discretionary marketing money or lending their name, he said.
Local governments, dealing with budget pressures, have had to scale back their support for things like street cleaning and use of parks.
Volunteers, feeling job pressures, have less time to give, Schmader said.
Looking back on Riverfest, Wright said, the period from 2004 to 2007 was among the festival’s brightest days, financially and weather-wise.
It was before the economic downturn. The festival found the “perfect storm” those years, with good entertainment at reasonable prices, including entertainers that were “just on the cusp of stardom,” Wright said.
And the weather — a major factor in turnout that organizers can’t control — cooperated.
Riverfest has tried new things, with mixed results.
For most of the years, the festival was held in May. In 2011, it moved to June, to avoid conflicts with Mother’s Day, May graduations and children’s activities.
“We wanted to make sure we were appealing to the family market,” Wright said of the decision.
But it didn’t help that the temperature hit 100 degrees during six of nine festival days in 2011. This year, it wasn’t nearly as hot.
The festival also has offered special activities that charge admission, also with mixed results. During the latest festival, organizers charged a $15 admission to Rick Springfield and Kellie Pickler concerts. Organizers thought it was a reasonable price, considering it would cost at least $35 to see those entertainers at other venues, Wright said. But attendance was disappointing.
“We have so much competition right now in terms of musical entertainment,” Wright said. “It’s difficult to find the right niche.
“Anything that is free, festival-goers seem to love.”
Some events that carried a lower charge, around $5, like the zipline ride and the Water Wagon river tours, were very popular, she said.
Because of the tight finances, salaries of the festival staff, including Wright’s, have stayed the same in recent years, she said. She and the rest of the staff have taken furloughs each year, lowering their pay.
According to the 2011 IRS form, Wright’s reportable compensation, which she said includes benefits, was $93,289.
It was $10,000 higher — $103,033 — in 2008.