The Reno-Gazette Journal pretends to answer this question, by pointing to a “new announcement today” from BMOrg analyzing this very topic. How was this announced, and to whom? It seems it only made it to their Facebook page. I can’t see it in the last “Jackrabbit Speaks”, it is not mentioned on the official Burning Man blog, and there is no link to it from the “What is Burning Man” section it is filed in. There is nothing on the burningman.com web site, and it doesn’t come up in a search there for “where does ticket money go”. The page seems to be an orphan on their site, and for some reason is immune to any form of public comment on it.
From the Reno Gazette Journal:
Burning Man announced today where ticket sales money goes to shed light on why tickets cost what they do.
…According to the announcement, the majority the cost of ticket sales goes to fees, equipment rental (including portable toilets), medical services and building the large wooden man structure.
The full report can be found here.
The following are some of the costs Burning Man said it incurred in 2013:
• Bureau of Land Management (BLM) manages the land the event is held on: 2013 fees totaled $4,522,952;
If you want the full report, you should actually read our coverage: Profit Grows, Donations Shrink: 2013 Afterburn Analysis; and Art World Rocked which shows the distributions of grants based on IRS filings. You can also check out this Google Docs spreadsheet that Burner Kevin put together from the Afterburn numbers (which don’t even add correctly in their 2011 and 2012 reports).
What is interesting here is the subtle use of language to mask truth. The carefully chosen words “BLM and Other Usage Fees” are repeated and slightly distorted, through a technique sometimes called “Chinese whispers”, to become “BLM manages the event…2013 fees”.
The misinformation has already been picked up by Ron’s Log and echoed as if it were fact “$4.5 million…that’s what Burning Man paid the Bureau of Land Management in fees”.
Following the links to the “full report” actually takes you to the new discussion using numbers taken from the Afterburn report. This says:
The Black Rock Desert is public land, but we don’t get to use it for free. It also takes a lot of equipment and hours of labor to put things together out there. The following are just a few highlights of costs we incurred in 2013:
- The space we use is managed by the Bureau of Land Management (BLM) and our 2013 fees to them totaled $4,522,952.
- Our 2013 cost for Rental Equipment (heavy machinery, portable buildings, staff radio gear, cars and trucks) came to $1,166,307.
- Port-o-potties are crucial for our fair city and those related costs alone racked up to $970,836.
- To offset the impact that our temporary population has on emergency services in the local area, we pay $301,660 to local agencies such as county law enforcement, Paiute Nation, and Nevada Highway Patrol.
- We still take care of our own though, and our on-playa medical services costs came to $455,024.
- Getting tickets printed and shipped is also a nice chunk of change, coming in at $479,741 last year.
- Building our iconic center piece, The Man, isn’t cheap either. Last year we spent $407,055 to bring it to life and share the ritual of burning it down.
- The other “Man” — the government — likes his cut as well and we paid $1,021,851 last year in taxes and other licensing fees.
Seems innocuous enough, right? Well the reason that the word “other” is significant in the original report is that in 2013, this category jumped from $1.8m to $4.5m – with no explanation given for the gigantic leap ($2,654,919 gain). “Taxes and Licenses” jumped from $154,994 to $1,021,851, also without explanation ($866,857 gain). At the same time, “Decommodification LLC owns the rights to everything” (or words to that effect) is now on all the tickets. Coincidence? Well the fact that BMOrg is trying to gloss over it by using increasingly vague language makes that seem even less likely.
From Burners.Me:
The most significant thing in the 2013 financials is the spectacular leap in usage fees – up about 250%, from $1,868,033 to $4,522,952. We know that the BLM did not increase their permit fees – in fact, some of their costs are now shared with Pershing County. We also know that the BMOrg founders created a secretive, privately held company called Decommodification LLC, which receives royalties from the Burning Man event for trademarks and images (it owns the commercial rights to every photo and movie shot by anyone at Burning Man). It’s not clear which expense category these payments fall under in the unaudited Afterburn “accounts”, but it seems like “BLM and other usage fees” would cover it. The difference between this expense item for 2013 and 2012 is $2.6 million, so I think a fair estimate for the size of this royalty payment is $2.5 million
Now, perhaps the BLM did almost triple their rates, and Decommodification gets next to nothing. Strangely, it’s not mentioned in this year’s permit – which says BLM gets 3% of gross revenue, same as every other year. This would be $900,000 according to Marian’s $30 million figure from her recent speech in Tokyo. Page 8 of the Permit Stipulations says they have to pay a “cost recovery fee” to reimburse the BLM’s costs, which have been offset by integrating their activities with Pershing County cops. This probably doesn’t change much from 2012 (56,141 tickets) to 2014 (61,000 tickets), so if we assume it is the same we can ignore it. That leaves $3.5 million of “other” fee hikes to account for: let’s call those “mystery royalties”.
Does some of your ticket money go to Decommodification, LLC? Yes – look at your ticket terms. Is this payment covered by “Mystery Royalties”? Well, we can’t find it anywhere else in their books, so probably. Does most of the Mystery Royalties go to the BLM? I doubt that, but I’m open to the possibility. I invite BMOrg to open their books and share with the community the details of the “BLM and Other Usage Fees” payments, to clear the air and ensure that everyone is speaking from a position of truth and openness. If all of that money goes to the BLM, why would BMOrg even write the words “and Other Usage Fees” on their Afterburn Report? Why not just say “BLM”?
This is what you’ve agreed to in the Ticket Terms and Conditions:
I acknowledge that the name “Burning Man” is a trademark owned by Decommodification LLC and licensed to BRC, and that BRC LLC has been given the sole right to license and enforce that trademark, and that all of Burning Man’s logos, trademarks or other intellectual property are owned by Decommodification LLC and licensed to BRC, and I understand that these two organizations control all rights regarding the licensing and reproduction of any imagery recorded at the Event. I agree that I will not use the mark “Burning Man,” the logos of Decommodification LLC or BRC LLC, or the likeness, drawings or representations of the Man or of the Black Rock City map, or any other trademark of Decommodification LLR or BRC, on any website (except for Personal Use, as described in Paragraph 5) or in any other manner, commercial or otherwise, except for nominative or classic fair use
The Reno-Gazette Journal might be fooled by your magic words, BMOrg, but not Burners.Me! We ask: “where’s the proof?”
Burning Man’s announcement compares their price to commercial festivals:
The group said Burning Man ticket prices are comparable to other events, including the four-day Bonnaroo ($260, plus fees) and Coachella ($349, plus $85 car camping) festivals and the five-day Glastonbury event ($333.19, plus $40 car parking).
Good – they might keep the ticket prices where they are for next year, then. Those festivals generally pay for the entertainment they provide to their customers, who can buy food and drinks; and they have to pay for security and site use, just like Burning Man does.
Where does your ticket money go? $13.60 of it went to art in 2013. Compared to $52 to profit and $103 to taxes, fees, medical, cops, and royalties (lumped together). The mystery royalties component works out to more than half the latter: $57 a ticket.
We help artists, too. In 2013, we distributed $800,000 in grants to artists. For 2014, we increased that figure to $1 million in art grants and support
Art Grants in 2013 were $12,500 per project, down from $14,894 per project in 2012. $825,000 was the officially announced amount of grants in 2013, which was upped to $830,000 in the Afterburn report. Their claim of $1 million on Art Grants this year now includes “support” as well as cash, which as we’ve already pointed out has a large component of BMOrg personnel costs. This year there are 60 winners who will share $16,666.66 each (including support) from BMOrg. If this was measured in cash, it would be a meteoric surge towards the artists, an increase of 33.3% on average each. Still a very small share of the cost to get big art projects on the Playa, and off without a trace.
When someone tells you “BLM charges $4.5 million a year for the permit”, ask them to prove it. Don’t believe something just because it’s in the newspapers. And always ask what “other” means.
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In addendum, burnersxxx. Permit General Stipulation 1 of 2014 is ‘The maximum authorized population at any point in time for the 2014 event is 68,000 PAID participants.’ Volunteers, and paid contractors, as some DPW and others, are not within the 68,000 numeral within 2014. This statement is not the same as within prior burns. Volunteers, whom obtain free tickets for their labours, are BRC Rangers, Gate, DPW, and perchance, some artists.
This permits of Burning Man to sell a higher number of tickets than priorly stated, perchance, the 2,000 tickets scalped for $650, within June and July, might be 5,000 tickets. In addendum, it might be another rationale of the 35,000 vehicle passes, sell a higher number of tickets, but the number of vehicles is the same, in addendum to the rationale of higher cash towards the pockets of the BMOrg.
Thusly, the cash in due of ticket sales might be higher, perchance $27 million (I did not do the maths). In addendum, of the Burning Man Project taking over the Black Rock Arts Foundation to within the Project, the cash in due of of these ticket sales might be moved from the ledger of the Black Rock Arts Foundation to the ledger of the Burning Man Project.
In addendum, perchance, are artists obtaining a larger number of free tickets within 2014? in due of the tickets not being counted within the 68,000 PAID participants? This might be the rationale for ‘over $1 million in grants and support’ for the artists. I am of the belief the Burning Man Project would not utilize the cash the community is donating through their BRAF site as ‘support for the artists’ from the Project.
Kids under 12 get in free. If they’re not counted at the Gate, how are they counted by the BLM?
I agree with you about the vehicle passes. It helps obfuscate the population. When BLM paused the entry until people left (a nightclub in the desert with an 8 hour line), was that because of a vehicle count or a head count? Or an estimate? Vehicle count they could do for sure. Head count is done by BMOrg volunteer teams, they’re the only ones boarding the vehicles. More heads per vehicle = more opportunities to “lose” a few between collecting the data from the entry teams and compiling that into a report for the Feds – either on the spot, or typed up and buried in a 100 page PDF months later.
The structure of the entire ticket system makes it very susceptible to number fudging, as we saw in 2012 when they miraculously discovered $1.3m that they had not accounted for previously. No-one audits anyone, and the information we get often seems carefully worded to have multiple meanings.
I think the way they calculate the “support” value is based on resources from their payroll that they provide to projects. One strong reason I have for suspecting that is in the first IRS Form 990 for The Project there is money moving back and forth between the various entities related to consulting and feasibility studies. I spoke to Scribe yesterday and he said that Larry and Marian had both mentioned in their lengthy interviews with him, that they saw their “BMOrg 2.0” providing consulting services to the regionals and the rest of the empire.
Decommodification, LLC is the new, deluxe version of Paperman, LLC, the IP-owning company that was the subject of the lawsuit between Danger Ranger and Larry Harvey, that John Law got dragged into, in 2007. That was before Burning Man went on its pursuit of royalties via commercial photo shoots, plug and play camps, movies, albums, the media blitz – all of which, in these social media days of YouTube and Vine and Facebook and Twitter, are already very lucrative and are presumably increasing in value each year as the overall content pile grows. Decommodification controls the rights to monetize that: and it is monetizing these rights.
This is the true effect of “we need to create a company to own the IP, so that we can defend privacy violations and prevent commodification”. This noble idea was then mixed with Burning Man’s unique photo policy, which says “you record the event, we become the co-owner” of images. The story at the time of introduction was to defend us from all those Girls Gone Wild types wanting to make pornos. Now, in the Year of the Souk, we can look back to the time since then and notice that in the last few years they haven’t done very much in protecting us from all the cameras (200 drones, and according to them broadcast to all comers worldwide live on UStream for 130,000 people at a time). However they definitely have been ramping up the licensing and commercialization side. At the same time they launched an unprecedented media blitzkrieg on all fronts – from Town and Country and Vanity Fair, to the Wall Street Journal and Bloomberg, Australian and Russian TV and UK newspapers, from Popular Science to Rolling Stone to Stephen Colbert talking about Burning Man with President Clinton and an Oscar nomination.
In a TED talk in Tokyo earlier this year, Maid Marian said the company does $30 million in revenues per year. The “official” ticket revenue was $23.23 million, which means $6.77 million was revenue from Other sources. That is a hefty 30% kicker on the gate. Quite possibly, it includes “grey market” sales like the Gate and the $650 secret tickets.
We’ve estimated ice to be more than a million dollars of revenue contribution, Center Camp could be similar – that’s the World’s Biggest Starbucks.
Could IP revenues be as high as 10% of overall? If not now, then soon.
Good point about the ledger – BRAF ended 2013 with about half a million in net assets, more than BMP. Combined, the 2 entities will have closer to $1 million of assets, of which $800,000 is cash. All the charities seem to have unusually high legal and accounting costs, and presumably integration will create cost savings. They pay rent too.
BMP + BRAF combined 2012
Assets: $929,166 (Cash/Liquid $800,937)
Revenues: $ 1,213,031
Expenses: $ 737,450
Profit: $475,581
WRT your last point about artists getting free tickets. They do claim “non cash contributions” as a monetary value in their charity returns. Possibly, this could be calculated in tickets, but if so it was only a small number in 2012 – $53k, or about 133 tickets. Not sure about this year.
Awesome full length post, burnersxxx, ha!
I must provide clarification upon a few statements within my comment.
The permit requires of the Gate to count the population upon each hour, and share this numeral with the BLM. The 8 hour delay within 2013 might be the BMOrg and the BLM were not of the same opinion of which types of population were within the 68,000 permitted, of which, the permit of 2014 is precise. The BMOrg, perchance, might have stated to the BLM, their desire of 68,000 PAID participants, in trade for the BMOrg limiting of vehicles to near 35,000. In addendum of the desire, of the BMOrg, of the $1.4 million of cash to be paid towards the BRC LLC.
My query in regards towards the volunteer artist crews, perchance, obtaining a bigger number of free tickets within 2014, is volunteers labourers do not count within the 68,000, and the BMOrg might claim ‘non cash contributions’ for the tickets. In addendum of, as you stated, ‘support’ of the staff, within the BMOrg, towards the artists.The awesome artists, and their mates, are very deserving of all free tickets they might obtain.
The BRAF obtained the $250 of cash upon each ticket of the secret sale of 2,000, or, perchance, near 6,000 tickets, as you state, we do not know the numeral. Whomever is to be the owner of the ledger, must utilize the cash upon art, or upon support of the art.
I am curious in regards towards the BLM statement upon the levies Burning Man pays toward them, of 2013, and of the big cheque, of payment of 2014 levies, to be transmitted prior to the awesome burn in the next week.
This is a joyous time, numerous awesome Burners are constructing the city, and preparing for an awesome burn!
Yes, burnersxxx, it is awesome to view that many people are now aware of the BMOrg hiding large payments of cash by way of their Decommodification LLC pockets, in despite of the Burning Man Project being a 501(c)3, and taking donations of cash, labour, entertainment, and art towards the Project, and towards the owned, by the Project, for profit, subsidiary corporation, Black Rock City LLC, doing business as Burning Man.
The amount of confusion as to the manner of the payments is very large, even people whom view the simple maths upon the prior large salaries the BMOrg paid towards their own pockets, are not of the comprehension of the manner of the payments within 2014 is much changed from prior.
From my prior estimate of their cash out, of which no other person has proved any number or statement to be incorrect*, in despite of numerous requests prove any number or statement to be incorrect, my estimate of the cash to be paid towards their pockets within 2014
– $4 million to $7 million of cash, in reserve, towards the purchase of their Burning Man(TM) trademarks at 2016 end, to be paid towards their Decommodification LLC pockets
– unknown amount of cash for the licence of their Burning Man(TM) trademarks within 2014, of which I priorly estimated at $2 million to $2.5 million, of which I might be incorrect as to the amount of cash, but I was not incorrect of that there is a levy for the licence of the trademarks paid towards their Decommodification LLC pockets
– solely near $800,000 of salary within 2014, in due of their positions within the Burning Man Project, of which Marian is CEO and/or President, and Larry is Executive Director
– unknown amount of cash, to be paid towards their Decommodification LLC pockets, for licence of images of the awesome art, mutant vehicles, theme camps, and Burners of Burning Man
For support upon these numbers, click upon the link above of their cash out, and click upon the links within the post upon their cash out. In addendum, click upon the links, by burnersxxx, within this post, of particular, the link upon the afterburn analysis.
Ms. Raenell, or any other reporter whom desires to pen a story upon ‘where the ticket sales money goes’, please present these queries towards the BMOrg prior to penning your story.
My apologies, burnersxxx, I did not desire to pen an update upon the BMorg Cash Out post prior to the Burn, this is a joyous time, numerous awesome Burners are busting their arses constructing the awesome city, and preparing for the awesome Burn. But, the BMOrg pens this PR rubbish purposed towards hiding the large payments of cash towards their pockets.
* I was incorrect of some numbers and statements, within the BMOrg Cash Out post, mainly of my estimate of the cash paid towards their pockets was too small, I did not include numbers for the licence levy of the trademarks, nor of the licence of images of Burning Man, within the $28 million numeral. In addendum, I was incorrectly of the belief of California 501(c)3 laws require of them to state, to donors, the large payments of cash towards their pockets, prior to 2016 or 2018. In further addendum, Black Rock City Properties LLC, which might own the Gerlach properties, might by owned by the BRC LLC, in place of being owned by the former owners of the BRC LLC.
thanks for your continued analysis. You’re right that no-one has proved you wrong or challenged your calculations yet. I think you’re also right that you underestimated the size of the cash-out. Rental of property and equipment is another area of “fat” that could be used to extract money from a non-profit, on a continuing basis. There’s a work ranch in Gerlach that is full of equipment.
Much obliged to you, burnersxxx, for your awesome blog, with all the posts leading towards the burn, and permitting me to pen these comments. Thank you.
Excellent post, burnersxxx.
Katrina Raenell, reporter with the RGJ – Please converse with the BLM administer for Burning Man and query him as to the cash Burning Man paid to the BLM in 2013, and the breakdown of the cash by purpose. If you do not receive an answer, present the query to him upon the U.S. Freedom of Information Act. He is obliged to answer your reporter’s query.
Burning Man did state within the link ‘The space we use is managed by the Bureau of Land Management (BLM) and our 2013 fees to them totaled $4,522,952.’ I priorly stated within these comments, many times, from simple maths, that Burning Man paid near $2 million towards the BLM, leaving $2 million to $2.5 million of cash for their Decommodification LLC to pocket as licence levies for the Burning Man(TM) name and logo as ‘and other usage fees’ within 2013.
I might be incorrect upon this, the statement from Burning Man is very direct. But, this number is easy peasy for a reporter to verify with the BLM. If I am incorrect, my apologies.
In addendum, Katrina, or her editor, please remove this story from your site, the story is solely a repeat of the Burning Man PR, it is solely a few selected numbers from 2013. If you desire to pen a story upon ‘where ticket sales money goes to shed light on why tickets cost what they do’, obtain the Black Rock City LLC, Burning Man, budget numbers for 2014. Or, obtain the full, audited numbers from 2013, as opposed to solely a few selected numbers from 2013.
[crickets from RGJ]
It’s nice to see some discussion happening on BM’s facebook group around the original post. People are starting to question and look at the facts for themselves.
The BOrg post is amazingly one-sided. Though they know the number now that all tickets have been sold, there is no mention of gross ticket revenues. This is intended only for the faithful who know not to look behind the curtain. It also shows how weak journalism is in Reno.
What I don’t get is this: Getting tickets printed and shipped is also a nice chunk of change, coming in at $479,741 last year.
Doesn’t the people buying the tickets pay for shipping? That is a cost of roughly 7.50$ per ticket (assuming a high end of 60k tickets actually shipped out, I know will call handles way more than a couple thousand tickets). Not that I really care either way if they are making a ton of money off the event or not, but that part seems weird to me. They charge 12$ to ship the ticket package, pretty sure a soft padded envelope costs no more than 8-9$ to ship 2 day shipping with signature confirmation and I am pretty sure you can negotiate a smaller postal rate if you are shipping 60k its priority mail.
Good call. Even mailing tickets is a profit center. Sure, people could print at home like other events – but where’s the money in that?
Yes. And you get your cool printed souvenir ticket when they scan your printed email ticket.
And how do you resell a print-at-home ticket? There are anti-scalper technologies in the printed tickets…
Of course, half of this problem is with will-call. Which doesn’t open up till weds of buildweek, which is the only reason I need physical tickets.
But there are other problems with willcall. Will call will not actually confirm a transfer of a ticket, nor will they prevent the original ticket owner from yanking a ticket from someone who he sold it too…
“It appears that BMOrg might have announced this just to the Reno Gazette Journal.”
Announced to the RGJ and 636,000 others who follow Burning Man’s FB page. Here’s the link: https://www.facebook.com/BurningMan/posts/10151947693102168
thanks, I’ve added that to the story.