John McCrary
564 Rainbow Circle
West Columbia, SC 29170
Ph: 803-794-5773
E-mail: mccrary@axs2k.net or rjmccrary@prodigy.net
May 27, 2001
Fellow USCF Electors: In my first campaign letter, I discussed several areas in
which I have strong concerns. Since that mailing, I have participated in the
Executive Board meeting of April 27-29 in Kansas City. Following is a summary of
some matters discussed and actions taken there, as well as some additional
issues not addressed in my first letter.
Basically, my concerns fall into four very general areas, all of which involve the need to restore correct priorities for the USCF:
1) The need to regain a strong relationship with local and state organizers;
2) The need to maintain member services that are paying for themselves or yielding a net surplus;
3) The need to avoid exclusive relationships that inhibit business opportunities for the USCF;
4) The need to improve service delivery, especially in high-priority areas such as ratings.
Following is an update of where each of the four issues above stands presently and what I recommend for changes.
1) REGAINING A STRONG RELATIONSHIP WITH LOCAL AND STATE ORGANIZERS:
At the April Board meeting, I once again raised the need to rescind the substantial increases in TLA fees. As noted in my first letter, those increases, reflecting a major policy change, were announced last October without some Board members, including me, being informed before the public announcement. Those increases remained in effect because only three Board members (Smith, McCrary, and Ippolito) voted to rescind them after learning of them.
I continue to support reduced TLA fees. Currently, the Membership
Growth and Affiliate Affairs Committees are working on acceptable cheaper
alternatives to the current fee structure. I will likely endorse their joint
recommendation. (--This volunteer consultation should have occurred before the
sudden huge increases last fall!)
2) MAINTAINING MEMBER SERVICES THAT ARE PAYING FOR THEMSELVES:
Books and Equipment: In my first letter, I expressed concerns that a supposed "outsourcing" of the books-and-equipment operation of the USCF was in reality a major downsizing of the operation. This move to major downsizing was supported by only four Board members: Redman, Warren, Barry, and Pechac. (See EB 01-70 from the January 2001 meeting).
For years, the USCF has provided a unique service to its members by carrying specialty books not easily found elsewhere. Despite claims to the contrary by some, there is no economic necessity to reduce substantially our USCF Books-and-Equipment operation. I have monitored the costs/benefits of this operation carefully since joining the Board, and verified my computations with financial experts.
Although the market climate has changed, we should not "solve" a problem by giving up on it. There are ways to improve and address the market changes. We must add more items appealing to kids, and lead the way in developing such items. The back-order problem can be solved by better means than just stopping the orders! We must improve the service and the content of the operation, but we should not kill the patient to cure him. Our books-and-equipment operation can, with proper management, remain the strong member benefit it has been for many years.
Correspondence chess is another member service that has been threatened despite the fact that it basically covers its own costs even when staff time is figured in. However, I once again had to fight a battle at the April meeting to discourage its elimination. Correspondence chess serves nearly as many members as does US ChessLive, when active users only are considered, but it contributes self-supporting revenues while US ChessLive does not. Correspondence chess will not be replaced by online play, which is more like OTB chess in its time controls. It will instead evolve into e-mail correspondence chess, a totally different animal from regular online play. There is no reason to eliminate it.
3) AVOIDING EXCLUSIVE RELATIONSHIPS THAT INHIBIT BUSINESS OPPORTUNITIES FOR THE
USCF:
The Internet is the future, so the USCF must be active in dealing with the crucial but cutthroat world of rapidly-changing Internet technology. In doing so, the USCF should seek competing bids for business opportunities, and utilize careful cost projections before entering any business relationship.
The USCF has a choice of two main Internet strategies:
a) Becoming a direct competitor with providers of online play, despite our being less well-funded and inherently less efficient than most providers in this high-tech field.
b) Seeking low-cost alliances, preferably non-exclusive, with providers of online play to make additional services available to USCF members.
Throughout my Board tenure, I have advocated the second strategy as being much less costly and risky. However, a slim one-vote Board majority determined early to implement the first strategy by having an exclusive deal with a specific small company. Cheaper potential Internet deals and competing bids for USCF were lost as a result of this push. Following is a summary of what has occurred:
The history of our online playing site: In January 2000, I sponsored a motion (EB 00-66) that allowed the Executive Director to negotiate deals with Internet providers, subject to Board approval. That motion purposely did not specify any particular company, in order to encourage consideration of competing offers. However, the following month, the Board passed a motion (EB 00-85) specifying that a deal be arranged with the current Games Parlor (Then with a different name.) I voted against that motion because it contradicted the intent of the first motion, to encourage competitive bids.
Now US ChessLive with Games Parlor is costing the USCF about $130,000 a year when direct costs are added to lost revenues from the ICC, even before some very substantial staff time is added in. These are annual, recurring costs; not one-time expenses, and they will grow larger. The USCF does not have this extra money, and must divert resources from other services unless US ChessLive brings significant membership growth. However, the USCF online site has not contributed at all to membership growth. An increase of 3000- 4000 adult regular members would be needed to recover this cost, but our number of adult regular members is decreasing since US ChessLive was started.
Moreover, other possible Internet deals were lost because of the push to get in Games Parlor. For example, consider the following:
The one that got away: In October 1999, I negotiated a face-to-face deal with Kasparov which would have provided the USCF, free of charge, with the following: a) sharing of Kasparov’s major-media publicity (recall his recent Super Bowl commercial); b) a scholarship program for US youth that could have reached well into six figures; c) provision to USCF of membership recruitment contact information; d) sharing of Internet resources such as website literature; e) additional financial benefits, including at least $25,000 in advertising revenue. This written proposal was affirmed at no risk or cost to USCF. The only "catch" was that we had to recognize the 2000 World Schools Championship as the only one that year in the world. (No problem, since it was the only one that year in the world!) There were no other exclusive provisions!
I have the written terms of that proposal in my files. Most importantly, a committee would have been formed consisting of Kasparov, me, and two others from our respective boards to explore other opportunities for the future. That was the most important point: Kasparov’s ventures come and go, but Kasparov himself is still a dynamic media figure who could help the USCF in ways not otherwise available to us, if we had established lines of communication.
Pressure from within the Board then led to my having to issue new guidelines
to equate the Kasparov proposal with a dissimilar one, but those new guidelines
still resulted in a modified agreement with Kasparov. That deal was then
frustrated and killed by some others on the Board, for reasons that were
mysterious to me until recent chance remarks clarified the problem: some other
Board members thought there was a conflict between the Kasparov deal and the
prospects of US ChessLive. For example, a recent comment by USCF President Tim
Redman in Chess Life implied that he thought there would have been such a
conflict. The absence of such conflict was clearly explained at the time, but
was apparently not accepted by some on the Board. Even if a conflict had
emerged, the initial agreement with Kasparov would have expired in 2000, about
the time US ChessLive was beginning. How sad that a no-risk, non-exclusive deal
was apparently frustrated for the wrong reasons!
4) IMPROVING SERVICE DELIVERY:
In January 2001, the Scholastic Council brought to the attention of the Board
a serious problem: delays in rating tournaments.We then learned that the office,
due to short staff, had adopted rigid policies on handling rating reports that
had minor flaws. This led to a motion requiring more flexibility on imperfect
rating reports. In spite of that, I later had to intervene when a minor
programming problem had caused a huge backlog of rating reports. The backlog was
resolved because of my call, but it should have been done earlier.
What is the problem behind these service failures? As much as I appreciate
the efforts of those involved, I believe that maintaining US ChessLive is
contributing to the decline of services in other areas such as ratings. US
ChessLive drains staff resources, including the resources of our overworked
programmer, and service in other areas has thus declined. The diversion of
personnel resources to support new programs is inevitably costing us, because
the biggest such personnel drain, US ChessLive, brings in no revenues to permit
hiring other staff to offset the drain.
SUMMARY: The USCF, through the actions of a slim one-vote Board majority, has improperly re-ordered its priorities. It has given priority to an Internet provider that costs about $130,000 a year, despite the potential for cheaper options. It has frustrated some Internet options that do not conflict with our online play in order to give an overly broad exclusivity to the small company that manages US ChessLive. However, It has threatened to eliminate a service (correspondence chess) that pays for itself, and has begun dramatically downsizing a books-and-equipment operation that brings in substantial financial support. Our most important service, ratings, has suffered partly because of incorrect prioritizing and the resulting diversion of personnel resources.
If elected, I will strive to restore proper priorities. I will work, within current contract limits, to seek low-cost, low-risk relationships with substantial providers of Internet services, just as were available before the push to clear the field for a single provider. Our existing services, starting with ratings, must be restored to top priority in allocating our personnel resources. Our books-and-equipment operation must be improved and restored as a strong membership service. Our local and state organizers must be brought back as our main partners.
Regards, John McCrary, USCF Vice President