Revenue from Burning Man event $42.8 million, up over $5 million from 2016
Annual Surplus (Revenue less Expenses): $3,733,876
Donations received almost $1 million
salaries (including contractors) increased $2.1 million
Cash and receivables: $11.75 million, up from $9.5 million in 2016
Total assets: $27.8 million
Sales of inventory was $1,605,516. That’s a lot of ice and coffee. Ice cost $596,177.
Medical expenses were $649,000.
Their stock donation program seems to be working, with a donation of $26,517 in marketable securities.
Most of the key personnel got pay rises in 2017, though some went down:
Overall payroll including contractors is $18,703,754 = 42% of revenues.
Grants as a % of revenues = 3.8% . Note this includes the cost of building The Man, the base structure, and partial funding of Playa art projects including the Temple.
The list of grant recipients contains many familiar names.
Burners Without Borders made 4 grants, totalling $4,900. [* this is for grants outside the US and has been disputed by BWB director Breedlove. See comments. I have asked him to provide the correct information, I will add it to the post – Ed.]
The annual Artumnal gathering took in $629,404 in 2017. About $100,000 of this went to pay for the use of the facility:
This is a substantial increase on 2016:
A huge thank you to A Balanced Perspective, DS and Anonymous Burner for their contributions and thoughts.
Artists receive less than 2% of the budget (approx $800,000)
Regionals receive about 4% of the budget ($1,717,766)
About 9% of the budget gets piled up in the bank account as cash.
Anonymous Burner says:
The art funding is constantly presented as a central tenant of the event, but is actually getting funded like an afterthought. Artists are the face and the creativity of the core of the event, but have to carry their art on their own backs while others claim credit for making things so great for them
What does an organization trying to “make the world a better place” through art need with so much cash, into the tens of millions of dollars? Why do they spend such a tiny amount of the money given to them by Burners every year on art? Why do the ticket revenues increase 10% a year but the art budget seems to keep proportionally shrinking?
How can they justify spending $1 million a year on insurance without providing insurance for the 10,000 or so workers on site building the city, art installations and camps? Would it really kill their vision to make $3.5 million a year instead of $3.9 million, and look after their workers better?
Why does the main “charitable” organization have to spend more on the Regional Events than they give out on grants? It’s about double the art budget. Is the purpose of Burning Man to spread Burner culture around the world through art, or is it to expand their inefficient bureaucracy? Can’t the Regional events support themselves?
The number of paid participants according to calculations in the Pershing County Sheriff’s Office report was 69,493.
I filed a FOIA request to get the 2017 vendor list: 84 companies selling things other than ice and coffee.
DS has also been filing FOIA requests for information about Burning Man. He was able to get this heavily redacted information for 2017, the calculations used to pay the Bureau of Land Management’s 3% fee.
Why the need for such secrecy?
The bulk of the $4,349,723 in Permits, Taxes and Fees appears to be the 9% Nevada Live Entertainment Tax. [* see comments – Ed.]
One of the interesting things in the 990 is the listing of “related entities”. It includes Decommodification LLC, but the share of end of year assets is $0.
Decommodification LLC is the organization that was created at the same time as the non-profit Burning Man Project, to hold all the intellectual property. As far as we can tell, it gets paid $75,000 per year in royalties from the Burning Man Project for use of their trademarks. We have no information on what other royalties it earns, for example from sales of the documentary “Spark” or the “lines around the block” Smithsonian exhibit. Google recently commissioned Burning Man to design a $2 million art installation for their campus: where does this money go? Five lucky artists will get a share, most likely the “big names” who appear in the grants list on a regular basis. Is there a royalty component to deals like this?
Decommodification LLC made two filings to the California Secretary of State on January 16, 2019. One was that “nothing has changed”, and another one requested that the company registration be canceled. It seems strange to me to file “no change” and “cancellation” notices on the same date, if anyone has knowledge of how this process works please leave a comment.
According to the US Patent and Trademark Office, the trademarks were transferred from Decommodification LLC back to the Burning Man Project on 28 April 2018 – the day Larry Harvey passed away.
The “nunc pro tunc” is a retroactive assignment to correct an earlier ruling. Was this something to do with Larry’s estate?
What happened to the rest of the intellectual property, including the rights to future royalty streams?
Were the trademarks assigned back to the Burning Man Project for free, Decommodification LLC dissolved, and the accumulated cash of 6-7 years of royalties distributed to the members? Or was some of that $12 million cash hoard used to purchase them?
These transactions occurred in 2018, so perhaps will get covered in next year’s IRS Form 990. There is no mention of them on the Burning Man web site, despite this being perhaps the most significant thing BMorg have done since spinning off their non-profit in 2012. BMorg like to claim they’re a “leader in radical transparency”, but Decommodification Inc has always been a mysterious black box.
The 2017 Form 990 values the Burning Man Project’s intangible assets at $4.23 million, but this was before the trademark transfer. This amount first appeared on the books in 2014. We believe it represents goodwill on the acquisition of Black Rock City, LLC from the Founders.
In 2016 BMorg bought a 3800 acre parcel of land known as “Fly Ranch” with big donations and paid $6.5 million. This is why the 2016 donations were more than $8 million.
Around 42:30 in the above video, they start talking about “community ownership of land”. The communist social justice component of this vision is that “living off the land is a version of Universal Basic Income”.
Five minutes into the video, they reveal that the land has been sub-divided into 53 different parcels.
Who gets a permanent Burning Man lot? Presumably the 6 5 Founders and the millionaires who put up the $6.5 million. Will the rest be auctioned off to the highest bidder, or handed out to the most favored staff, artists, and camps? I’m tipping Dancetronauts are not on the short list.
This reminds me of an earlier post, Get Your Timeshare Slot in the Sultan. There, I postulated that the “ironic timeshare sales” brochures being handed out from a booth at the Man base was actually Burning Man’s way of bringing that in as a future reality.
The same thing happened with hotels, where BMorg director Chris Weitz opened an “ironic hotel” at Ashram Galactica, which paved the way for the proliferation of luxury Plug-N-Play hotel camps today.
Some information about the original intention for Fly Ranch is available thanks to the Wayback Machine
You can see from the plan above that the property is adjacent to another playa. Hualapai Flat is land administered by the Department of the Interior’s Bureau of Land Management.
From the January 2018 report, it looks like this deal is close to being done:
Who else would want empty desert playa?
The original vision for the Fly Ranch site was a sustainable community of one acre lots for employees and affiliates, with its own airstrip. This plan talks about 9 parcels of 5 acres, each with their own access roads; and 73 parcels of 1 acre each.
Village and Residential sites
The two communities are based on Burning Man’s Ten Principles, and this will be it’s first year-round expression. Employees and affiliates may build on a ‘Homestead’ basis, or rent or buy into the Village community at the project’s north end. For others, one acre lots may be bought for home construction in the project’s central development (and separate H.O.A). These areas will be allowed to grow incrementally, with roads and utilities phased as required. Geo- thermal electricity will serve all the lighting and cooling needs of residents (and possibly the valley’s ranchers as well), and hot water will provide all heating.
Organic vegetable farming will be developed as an economic base for the village community. Geo-thermally heated greenhouse organic farming will be operated for local needs, and for transport and sale. This can supply Reno with organic vegetables throughout the year, while creating a wholly independent economy for the community.
Even with limited use, the grassy banks of the vernal pools are being sloughed in by bathers, the pools gradually churned into shallow mud holes. Bathers also leave tanning lotions, insect repellants, and other contaminants behind to ill effect. The pond waters contain a species of pupfish which are isolated by the underground source and terminal outflow.
A nature preserve requires control and enforcement, accordingly this area must be properly fenced to admit access only to indigenous animals, but excluding horses or cattle which trample wetlands. Human access must be highly regulated, with trespass, hunting and public use of existing pools and hot springs banned.
Anticipating the utter destruction of too much love, together with the projected costs of controlling and insuring against increasing liability, it is suggested that a Land Conservancy that is affiliated with Burning Man be created to manage the Geyser and wetland area.
This will epitomize the style of Fly Ranch, and become a beacon for the greater community. A restaurant, rooms and services will be available. Fly Lodge will be available for public and corporate use, while also serving as World Headquarters for Burning Man’s Regional organizations around the globe.
Burning Man Board Member Chip Conley’s experience with luxury boutique hotels and AirBNB would come in handy for a plan like this.
How Much For That Oasis In The Desert?
Burning Man’s balance sheet shows land, buildings and equipment of $11.9 million; net of depreciation, $9.9 million. Schedule D, Part VI lists the value of land as $7,233,545 and buildings at $979,870. In 2015, before the Fly Ranch purchase, land was $198,000 and buildings $979,780.
According to Nevada property records, Fly Ranch only cost about $2.6M. The Washoe sales records record two transactions for $2.377M and $0.240M. The water rights came under two different transactions and appear to not have specific value attached to them. The water rights transactions gave the prior owner only about 64 acre feet of water for livestock.
There were four transactions in 2016:
1) sale of 3,381 acres that was the majority of FR,
2) another 276 acres that was part of the FR with the geyser
These sold the mineral rights but not the water but referred to other linked sales of water rights.
3) transfer of water rights with a carve out for the prior owner for item 1).
4) transfer of water rights with a carve out for the prior owner for item 2).
Surface water rights initiated by applying water to beneficial use prior to March 1, 1905, and which have been perpetuated or continuously used through the years are known as vested water rights
The main water rights for the hot springs, Cottonwood Creek and Little Cottonwood Creek are the rare and highly coveted “vested water rights”, granted before 1905.
My source tells me that the Burning Man event draws 12 million gallons of water per year from this property (27 acre feet).
We recently published discussion from the Washoe County Commissioner’s meeting about the possibility of redrawing district boundaries so that Burning Man would be part of Washoe County (which gets the economic benefits from event-related tourism) instead of Pershing County (which gets a massive spike in crime rates with no economic benefits).
Fly Ranch is next to Hualapai Flat. Burning Man was held at this location once, in 1997. Hualapai Flat is where Pershing, Washoe, and Humboldt Counties meet. Fly Geyser is in Washoe County.
Is the proposed Washoe Boundary move related to long-standing plans to purchase Hualapai Flat? Is BMorg sitting on $4 million from the Fly Ranch donations to acquire this land?
I guess time will tell.
[Update Feb 7, 2019 2:11pm]
The plot thickens, with this post saying that Burning Man was under contract to purchase Fly Ranch in 2009, and real estate developer Build SF helped organize their corporate restructuring to provide “personal financial security” for the 6 Burning Man founders.
In 2009, the BUILD partners were introduced to Larry Harvey and his partners at the Burning Man Organization. Burning Man was in contract to acquire a 4,000-acre ranch in the Nevada desert on which they planned to move the annual Burning Man event as well as develop a desert art center.
BUILD facilitated a transaction that allowed Burning Man to adjust its corporate structure, manage tax requirements, protect trademarks, establish a permanent office, and provide personal financial security for the six Burning Man partners. Real estate provided an elegant solution for these complex, multi-dimensional challenges, while preserving and honoring the basic precepts of Burning Man. We are proud of the part we played as advisors to Burning Man in establishing a clear path and solid foundation for everyone’s long-term benefit, including the event itself.
I have another trusted source who drew the “intellectual property in a separate company” structure on a napkin for CEO Maid Marian. I will ask their opinion on this.
[Update Feb 13. 2019 4:06pm]
Breedlove head of BWB has updated us with some more detail:
It’s interesting to see the difference between Part III 4c & Schedule F Part 1. I don’t quite understand how they split the difference between those two sections.
We also provided grants for Hurricane Harvey Disaster Relief at $21,317.12
There was also a series of Fiscal Sponsor funds that were raised and given out. One of those being the $30,363 for the Camp Epic Santa Rosa Fire Relief (which is in one of your screenshots above)— but I don’t have the ability to pull up all those numbers at this time.
I’m also realizing while going through my data that it isn’t the easiest to find some of this stuff unless you know where to look. So taking a note on improving our reporting systems for the future– I appreciate the opportunity to look at how we can do better at reporting in a more transparent and better to find way.
In NYMag, Nellie Bowles reports that BMOrg have their sights set on a permanent community, and once again will be bussing investors from First Camp out to the nearby Fly Ranch property.
Burning Man’s leadership, nicknamed “the Borg,” has been quietly pushing the entity toward a new phase.
Quietly? As quiet as you can be with half a dozen people in your media team, a Minister of Propaganda, and staff flying all around the world for panel discussions.
As the six founders who built the festival and still guide it start to age, a new generation of leaders is being tapped, including the charismatic and ambitious Bear Kittay, now “Burning Man’s social alchemist and global ambassador.” The Borg is cagey about plans, secretive about money, distrustful of the press (whose Wi-Fi they’ve shut down this year). But co-founder Marianne Goodell has hinted at another major change…developing a private tract of land as a permanent Burning Man community.
Is this Burning Man’s future? Bear Kittay, Marian Goodell and Michael Mikel. // Photo by Christoper Michel
Last year, the Borg renewed efforts to purchase and develop a nearby property, the geyser-filled Fly Ranch, which they’d been eyeing for years. As Goodell recently said on a podcast called Positive Head. “For the long-term survival of the culture, we are going to need a physical space…We will, as time goes by, find it hard to only be in the Black Rock Desert. We may need to find a place that would allow for infrastructure. I’m certain that’s in our future.”
Fly Ranch is, by all accounts, spectacular: it’s about 4000 acres (880 of which are wetlands) with 23 hot and cold springs and around 40,000 feral horses. There’s one 104 degree lake that’s a couple hundred feet wide. Rod Garrett, one of the original architects of Burning Man, had drawn up plans for a Burning Man Fly Ranch city, a mix of homes and communal spaces built to blend into the desert.
“Employees and affiliates may build on a ‘Homestead’ basis, or rent or buy into the Village community at the project’s north end,” he wrote, in his lengthy proposal.
According to one plan, Fly Ranch buildings would be made with unpainted, rammed earth and sod. No fences would be allowed, and all members of the community, who could either build homesteads or buy into a communal village, would live by Burning Man’s “Ten Principles”...Organic vegetable farming and a Burning Man-like conference business would serve as the economic base of the community.
Growing organic crops in the Alkaline desert, hundreds of miles from the nearest small town. A conference center in the middle of nowhere, in a place with notoriously harsh physical conditions and world famous bug infestations. Sounds like a lot of smart business planning has gone into this idea over the decade+ they’ve been developing it.
Festival co-founder Will Roger writes of this new Burning Man city in utopian terms: “I fondly hope that this concept can develop rapidly, and become not only a destination for learning and wonder, but a model to the world of a community, although remote, that is ideal and sustainable. It is for the Burning Man Project to create this wilderness paradise.”
Development of this scale would require a lot of money, and last year, the organization began giving tours of Fly Ranch to potential investors. People around the playa whispered that well known burners like Elon Musk, Sergey Brin, and hotelier Chip Conley were among those shown the property (though none have confirmed that they actually were).
…Burning Man first tried to buy it in 2005. They tried again a few years ago, but the asking price was around $11-12 million, and they only raised about a half a million dollars, he said. But last year, the landowner Sam Jasick passed away, leaving his son Todd in charge, and Todd said he’d welcome another offer. Roger, who lives in the nearby town of Gerlach, decided this time he would get it right.
During last year’s festival, he said they were leading two tours a day. They had set up a little camp there for prospective investors to lounge and get a sense of the area’s energy.
Because nothing says “Decommodification” like 2 busloads a day of investors going to the real estate sales lounge. And nothing says “sustainability” like building a 70,000 person city for the purposes of entertainment, creating art just to burn it down, and in a week producing the amount of CO2 emissions of a small country
From Roger’s perspective, buying land means Burning Man can serve more people — the demand for tickets already far exceeds the supply. “This year, 60,000 people didn’t get tickets to this,” he said. “By owning our own property, it means putting in our own infrastructure. It could be a retreat center or an art park.” He said the plan would be to build that retreat center and a museum, hold smaller events, and create a city to test out what it would be like to live on Mars (guess which tech billionaire could be thinking of that?). “What interests me is the experiment in a permanent community,” he said, adding that the tech titans felt the same way. “They’re interested in that too, yes.”
So far, not interested in it enough to fund a Series A for this 30-year old start-up. But maybe this is the year.
Part of the appeal of the site is recent moves Will Roger has made on the board of a local Advisory council to get the BLM to re-designate land so that it can be sold.
Adjacent to the Fly Ranch property is, Roger said, “a playa, public land.” He had joined a political group: the Sierra Front-Northwestern Great Basin Resource Advisory Council. In this position, he helped to declare that land disposable, defined by the Bureau of Land Management as “land that can be sold.” He added, “Getting it on the disposable land list was crucial because we could have our own playa then, something smaller for five to 10 thousand people.” The property is “A-rated solar, A-rated wind,” and Roger said the income from that power generation would become the foundation for a community. “If you look at a 100-year plan, it could be remarkable as a planet changing culture,” he said.
If someone can figure out a way that you can put solar panels miles away from industry or population, and that itself makes so much income that it could sustain a growing community, then that could indeed be planet-changing. Usually, local generation offsets costs rather than creating revenue – and industrial-scale facilities are built near the main power transmission grid.
As Burning Man emerges as an emotional and intellectual center for the tech world, Roger thinks the chances of a deal going through are higher than ever. His employees were leading tours while he hung out at First Camp — “I don’t swim in that world, but my staff swims in that world,” he said. He said he was just thrilled the vision to create a town has finally come closer to fruition. “I’ve had my dream in this and my heart broken so many times,” he said. “Now I’m 66 years old, I’m almost retiring, and it might happen.”
Emerges? Isn’t that how the whole shebang has been marketed, since DARPA first unleashed their Web weapon on the general public in the 90’s?
Although Roger says he doesn’t swim in that world, 4 years ago when they bussed me out to the site on one of these investor tours he was the man in charge. Swimming in the world of hot springs was part of the sales pitch – everyone was encouraged to get naked, of course. The details about how investors would get a return on the most expensive desert land on earth were sketchy…“we’re going to run a business based on the Ten Principles“. Ummm, which ones? Gifting and Decommodification? Leave No Trace? So how does that work again? Everyone volunteers for free, pays to stay in a conference center where you bring your own bedding and catering and take out your own trash, the Founders get the ticket revenue (which of course “isn’t enough due to all our costs”), and investors donate the money?
A year has passed since we sat together in the playa, and it hasn’t quite happened yet. When I asked a Burning Man representative about their plans, the website they had up saying that they’d begun to develop the land came down. But on the Wayback Machine you can still see their statement: “The Burning Man Project is pleased to announce the initiation of the preliminary stages of the development of the Fly Geyser property.”
A quote on the site from Will Roger reads: “The Fly Ranch Project is a key component of a broader plan for economic and community development in the Northern Nevada area.”
Permanent infrastructure for Burners is a great idea. Destruction and pollution is so 1980’s. Leave It Better trumps Leave No Trace. A Center for Philosophy, to spread the culture around the world? I could see that happening. Putting these things together, a couple of dozen miles further out into the wilderness from Gerlach? That leaves me scratching my head. I always thought the key to real estate investment was location, location, location.
If you build it, they will come…maybe they should build it in Colorado and sell weed to tourists to pay for the thing.