2012 Financials [Update with Profit Estimate]

2012 Cash Expenditures	Amount
Event-related expenditures:
BLM and other usage fees	$1,868,033
Rental Equipment (heavy machinery, portable buildings, staff radio gear, cars and trucks)	$973,142
Toilets (and related costs)	$851,449
Honoraria provided to artists	$681,930
Local Agencies (County law enforcement, Paiute Nation, Nevada Highway Patrol)	$615,803
Materials and Supplies (shade structures, signage, lighting, décor, cleaning supplies, photography, archiving)	$270,349
Cost of Goods for Ice, Café and Merch sales	$369,132
Watering for dust abatement (equipment rental, contractor services)	$462,938
Ticket sales/processing/printing fees paid to outside ticketing firm	$403,058
The Man and Platform (materials, pyrotechnics, technicians, labor)	$237,581
Medical Services and Supplies	$405,976
Fire Safety	$176,254
Fuel	$258,117
Small Equipment and Tools (including radio comm equip, safety & signage)	$140,078
Printing (newsletter, survival guide, gate materials, postcards, stickers)	$154,410
Vehicles (registration, repair, and maintenance)	$84,850
Equipment Repairs, Maintenance, Cleaning	$35,629
Costumes / Uniforms	$69,263
Fees, Agency permits, royalties, Damages & Losses	$57,075
Total event-related expenditures	$8,115,067
Expense Categories that include both Event-related and Organizational:
Payroll	$7,787,787
Outside Services: Independent contractors	$855,312
Insurance (property, liability, workers comp, vehicle)	$551,068
Tax and Licenses (state and federal, payroll, misc)	$154,994
Meals and Food (meetings, playa commissary, non travel)	$1,267,959
Total Expense Categories that include both Event-related and Organizational	$10,617,120
Total Outreach Expenses – Off-Playa Events, Regionals, Other	$263,985
Year-round Expenditures of the Managing Corporation:
Outside Services (legal, consultants, accounting)	$855,183
Facilities Rent	$615,944
Travel (airfare, mileage reimbursements, food while traveling, accommodations for meetings, agency relations, public relations, training, etc)	$430,309
Office and Computer Supplies	$133,987
Utilities (San Francisco and Nevada)	$84,198
Donations to local Nevada schools and organizations	$238,976
Postage	$7,861
Internet (hosting fees, POP accounts, high speed line)	$72,838
Telephone (San Francisco and Nevada Offices, reimbursements, conference calls)	$83,986
Shipping / Freight	$16,194
Gifts, Promotions	$35,727
Education and Training	$105,224
Interest	$17,350
Total year-round Expenditures of the Managing Corporation	$2,697,777
Expenditures for Fixed Assets:
Vehicles	$33,000
Computers and Electronics (including radio equipment)	$121,136
Machinery and Equipment	$66,137
Trailers and Portable Buildings	$203,123
Land and Building Improvements	$0
Furniture and Fixtures	$21,235
Total Expenditures for Fixed Assets	$444,631
Total Expenditures – 2012	$22,111,580

Since BMOrg don’t want to share, we do the math, so you don’t have to.

Originally, there were just 50,000 tickets in 2012. BMOrg’s gate revenue for that was $18.5 million. Then, the special permit was increased, meaning more tickets. But, the event didn’t actually sell out, in fact attendance was slightly down on the previous year. The final attendance was 56,149, so assuming that the extra 6,149 all paid full price of $390 and there were no cash gate sales in addition, then 2012 ticket sales were $20.9m.  Did Burning Man actually lose money in 2012, when attendance dropped after the lottery fiasco?  Remember they found another $1.3 million in revenues after the event, that they forgot to account for. I believe I have those numbers included in the 56,149.

This year Cargo Cult Burners forked out more than $1 million, just on ice at Arctica. In 2012, the cost of providing ice AND coffee was $369,000, meaning this is quite likely the most profitable cafe in the entire world.

We don’t know how much additional moolah was earned from photo shoots ($150k a pop), movie royalties, and YouTube viewings…let alone equipment rental, plug-n-play camping, utilities, commissions…the list goes on, and is not public. We have to infer some of these things, from the economy we can see out there. The BLM fee is 3% of BMOrg’s total take from the event on their land. Note that there is a separate accounting line item for the other authorities. The Feds get paid $1.9 million for the use of their little patch of desert, that would otherwise just be sitting there waiting for a few land sailors to show.

[Update 10/27/13] – we have gained some further information on the breakdown of costs. The BLM Permit states that Burning Man has to cover the Feds’ costs, AND pay a 3% cut on top of that, so not all of the $1.9 million is from the commercial use fee. Here’s a more detailed breakdown of the split:

“Black Rock City LLC is responsible for payment of the actual costs of administering the Special Recreation Permit, including all direct and indirect costs, in addition to the commercial use fees.  The fees that BLM collected for the designated event period in 2008, 2009 and 2010 ranged from $989,000 to nearly $1.3 million.  In 2010, the BLM’s cost recovery from BRC for issuing the permit totaled $795,533.55, and BRC’s commercial use fees totaled $500,483.98 (Aspen 2011).

Agency, city and county personnel get paid overtime, and Black Rock City reimburses this cost.”

(This means BLM employees get paid overtime and Black Rock City foots the bill.)  This almost seems like giving “bribes” to the agency, city and county, doesn’t it?

More from the June 2012 Environmental Assessment (EA) for Burning Man.

So, now we have some data on the 2010 cost recovery item. Total BLM costs were $1,296,017, and the total revenue for the 3% commercial fee calculation was $16,682,799. The commercial use fees are 38.6% of the total. Assuming that this ratio still holds true for 2012, this would give us commercial use fees of $721,379.

Bringing the total take including tickets, ice, coffee, and donations, to $24,045,986. A nice profit for Burning Man of  $1,934,406 – before taxes, but after they’ve taken out about $8.5 million in salaries.

The actual cost of putting on the party appears to have gone up substantially this year, to $8.1m – meaning it won’t be surprising if it exceeds $10 million for the first time when 2013’s results come out. This year’s numbers will be underpinned by higher attendance of almost 70,000, offset with higher legal costs and payments to authorities. Total take by the Feds and the local authorities, including Paiute Indians and donations to schools and other local organizations, was $2,779,887. Take that stuff out and really, it’s costing $5.3 million to put on a party for 70,000 people with no commerce that brings in  over $24 million.

Of course, we don’t know how much revenue gets brought in from the year-round activities like photo licensing, merchandise sales, fine art, and broadcast and YouTube royalties. Presumably this is enough to offset at least some of the $2.7m in organizational overhead costs that are not event-related.

It sure seems like several great big piles of dough, for a week in the inhospitable wilderness. Burning Man’s all grown up now, we don’t begrudge them any of it, it’s theirs to spend however they see fit. If they think the year round activities make the week of the party better, beyond the event costs, that’s their right. Hopefully when the event completes its transition to a non-profit, we can all see some public, audited accounts – just like other cities like San Francisco publish for their taxpayers. $390 is cheap when you consider that it’s tax AND rent combined.

One thing’s for sure: the banks are getting almost ALL of this money. As it flows into the community and back out, between us all and the BMOrg and Wal-Mart and Chevron and El Monte RV and so on in this symbiotic economy… the banks get paid, again and again and again.

Imagine what a different world we’d have, if instead of all the year-round activities, the Burning Man Organization just threw the week-long annual party, then invested half the profits in buying land and infrastructure in other places around the world for Burners to throw Regional events at. The founders could still pull out $8 million a year profits for themselves, and the Burner universe would be getting $8 million of new, permanent, cultural infrastructure every year. The event would be underpinned by permanent infrastructure and land that would appreciate in value over time, as Burners improved it and up-cycled it with new, more profitable uses.