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Date: 08 Jun 2008 02:42:31
From: samsloan
Subject: Hanon Russell Letter to Bill Goichberg
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Bill:
It has come to my attention that there is a proposal that would reduce
the number of copies of Chess Life distributed to the membership.
Although I appreciate the board's desire to cut expenses in these
trying economic times, this idea is a bad one for several reasons.
Without the magazine arriving each month, any stimulus for members to
become more active, participate in chess events, follow the goings-on
in American chess, not to mention purchase chess books and equipment
from their national federation, will slowly but surely erode. The
identity of the USCF will be at risk, becoming only the custodian of a
chess rating system, not the face for the history and culture of
chess. A monthly publication encourages a sense of community, an
affiliation with others which a bare bones organization can never hope
to achieve.
It will also reinforce the perception, real or otherwise, that the
weakened financial position of the USCF is only getting worse. This
will hardly be a situation that will encourage more people to join or
renew.
There are several ways to deal with declining revenues. Attempts may
be made to cut expenses, increase revenues, or seek somehow to combine
the two. It seems to me that the emphasis should be on increasing
memberships, and therefore revenues. The real problem facing the USCF
is that memberships are either declining or at best, remaining
stagnant.
The decline or stagnation of core memberships should be the real
concern, for regardless of any steps taken to cut expenses, such
measures are bound to fail if the number of members continues to
decline.
=46rom the point of view of retail sales to USCF members, this is
another discouraging development. We have already had to bring in
legal counsel as a result of what I considered an egregious material
breach of the agreement relating to a secret arrangement with the
House of Staunton. For over a year, the USCF was paid by the House of
Staunton to include promotional material to new members, including but
not necessarily limited to discount coupons, which promoted and
directed new members to patronize the House of Staunton.
Considering that the group of new members has historically and
demographically been the highest spending group per capita for retail
sales, this clandestine arrangement was particularly appalling. This
strategy was short sighted, seeking quick gains in ad revenues and
overlooking potential deep losses in sales revenues. This purchasing
pattern of new members was known, or should have been known by the
USCF when entering into this arrangement with the USCF, and it almost
certainly was known by the House of Staunton.
When a letter from our attorney demanded that this cease and desist,
not only did it continue (and my information is that it continues to
this day), we did not even get the courtesy of a response. Nothing at
all. Be advised that matter is still very much active, pending the
results of legal research that is still ongoing.
Now it appears that one of the significant vehicles for USCF Sales to
promote and market books and equipment is being reduced, perhaps even
eventually eliminated. There seems to be no regard or even realization
that this may have the effect of rendering the USCF brand worthless as
USCF Sales tries to promote retail sales on behalf of the federation.
USCF Sales relies on the ability to reach members with catalogs that
are bound into Chess Life as well as monthly advertisements in Chess
Life. Equally discouraging is the USCF's inability to understand and
appreciate the value of Chess Life to the chess community.
To my knowledge, there is no member of the board, or any officer, who
has any meaningful retail sales experience or marketing skills. Yet
the board appears to take steps =96 intentionally or unintentionally, it
hardly matters which =96 to undercut the efforts of USCF Sales to sell,
promote and market on behalf of the USCF, while of course it
simultaneously deplores the decreasing revenue sales generated and
assumes that these actions should have no bearing on minimum
guarantees or other indicia of performance. In fact, these actions
have the effect of gutting some of the core provisions of an agreement
that is already is under pressure.
As the discussions about what to do with Chess Life and memberships
continue, I felt I should weigh in on the matter. It is distressing
that after more than four years of handling the retail sales for the
USCF the relationship seems more adversarial than one of partnership.
I understand that there will be those who will genuinely disagree and
there will be those who will want to simply "circle the wagons,"
rejecting any contrary views as they promote a personal agenda.
I am reminded of the one-liner that a camel is really a horse designed
by committee. I fear the same is going on here with the redesign and
restructure of the USCF, albeit by those who may mean well. Please re-
think the proposed changes in Chess Life. If implemented, these
changes will be essentially irrevocable. Consider hiring someone who
has professional marketing and public relations experience with other
organizations. Focus on reversing membership trends. I have been a
member of the USCF for over 45 years and have actively supported it at
all times. I very much want to see it continue and flourish.
Regards,
Hanon
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Date: 08 Jun 2008 03:17:57
From: samsloan
Subject: Re: Hanon Russell Letter to Bill Goichberg
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Here is the final response by Mr. Hanon Russell:
Bill:
I appreciate your taking the time to reply. First, let me note that
although a number of people have reacted to my initial message (and
certainly more may in the following days and weeks), I have neither
the time nor inclination (with one exception) to respond to each email
and I will not do so. No one should mistake my choosing not to respond
to any point that may have been raised as an admission, acceptance,
waiver or anything else on my part. I shall deal with the one
exception later in this message.
You raise an apparently valid point about the arrangement with the
House of Staunton, to wit, it appears that we were offered the same
"arrangement" and turned it down. Well, this is not exactly what
happened, and the differences are critical and the reason why I have
turned the matter over to our attorney.
I had been approached several years ago by Bill Hall to include some
USCF Sales material in the mailings that the USCF made to new members.
It was recognized then, as now, that the new member group did indeed
purchase equipment, books and the like at a significantly higher rate
than would normally be expected. I was offered the opportunity to have
the back side of the introductory letter/card feature some products in
return for splitting the cost of the printing. My recollection is that
the cost to USCF Sales was a little less than $4,000 at the time. We
elected to try it. It was not successful.
When the initial printing had been used up, Bill Hall contacted me and
asked if I was ready to do it again. I declined, citing the minimal
return for the dollars spent. He understood and that is the last I
heard of it until Lev Alburt contacted me. He wanted to promote his
books and asked what my position was. I told him I had no objection so
long as USCF Sales was able to make the sales. Lev agreed and the
flyer that was reviewed by the USCF and me and included in the new-
member mailing specifically referenced USCF Sales - its address, toll-
free 800 number, catalog numbers. Everything.
Apparently still seeking sponsors for the new-member mailing, the
House of Staunton was contacted. I say "apparently" because I did not
find out about the arrangement between the USCF and the House of
Staunton until the beginning of April 2008. It is not insignificant
that in stark contrast to the Alburt flyer, neither the USCF nor the
House of Staunton ever informed me about what was going on. Not once,
in spite of multiple contacts with both concerns. My understanding is
that I did not find out about this arrangement for almost a year.
When I did discover what was taking place, I immediately confronted
Bill Hall. His response was (1) USCF Sales had declined to be involved
in this project and so the USCF was free to bring another firm into
the arrangement; and (2) there really was no difference between what
was going on with the House of Staunton and advertising by other
companies in Chess Life. As far as the first point is concerned, had
it been done properly, like the Alburt flyer, I would not only have
had no objection, I would have welcomed it. However, it is difficult
based on how this arrangement was carried out by both sides for me to
believe that in fact everyone understood what was being done and what
should and should not be disclosed.
In fact, USCF Sales has always offered chess sets from the House of
Staunton. We would have been pleased to have the House of Staunton
promote its products in the same manner as Alburt was promoting his
books - by including a flyer promoting the sets and directing them to
USCF Sales for purchase. Instead, the HOS material included (a full
color flyer and a second "coupon" offering 10% off) had no mention of
USCF Sales and encouraged the recipient to contact HOS directly. Sales
by USCF Sales of HOS sets that may have been made as a result of this
mailing were lost; we made none.
To take the position that a select, targeted mailing to a group known
to spend a lot more easily in the first few months of a new membership
is no different than advertising in Chess Life reflects either a
complete unfamiliarity with marketing and sales or disingenuous spin.
Or both. For God's sake, a new member is receiving the first contact
from the U.S. Chess Federation and in it are flyers encouraging the
member to buy fine chess sets, (the "official" USCF sets I believe is
a term used more than once in the paperwork) directly from a vendor
other than USCF Sales. Remember USCF Sales? We send you 12% off the
top of every purchase. Even when we sell a HOS chess set. 12%. I am
sorry if you cannot differentiate this from a paid ad in Chess Life. I
see the difference very clearly. So do our attorneys.
Now for the "exception" to which I referred. A member of the Executive
Board, Mr. Bauer, chose to respond to my initial message. You along
with everyone else on the list received his message. I had put forth
what I had thought was a legitimate concern, constructively
questioning decisions I saw as bad for the USCF and bad for USCF
Sales. Instead of replying in similar fashion, he chose to create
untruths out of whole cloth, fashioning a personal attack against me
and my son. One wonders what color the sky is in his world. Mr.
Bauer's reputation for conducting himself in this disgraceful manner
should not have come as a surprise to me, and I already know from
private messages that it was not a surprise to others who saw what he
wrote. However, that does not change the fact that these comments are
beneath contempt.
Bill, I respect your different views on these matters but must also
assert that I strongly disagree. As the HOS matter is currently being
handled by our attorneys, and the Chess Life matter may soon be, I
regret that I will not be responding any further to your or anyone
else's remarks. Not even when Mr. Bauer again launches personal
attacks...
Regards,
Hanon
Hanon W. Russell
USCF Sales.com
http://www.USCFSales.com
ChessCafe.com
http://www.ChessCafe.com
Toll-free (orders only please) 1-800-388-5464 (KING)
General Offices: 203-783-9866
Fax: 203-783-9673
234 Depot Road
P.O. Box 5460
Milford, CT 06460 USA
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Date: 08 Jun 2008 02:46:35
From: samsloan
Subject: Re: Hanon Russell Letter to Bill Goichberg
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On Jun 7, 11:46 pm, Randy Bauer <[email protected] > wrote:
>
> DING DING DING -we have a winner.
Apparently Randy Bauer, a member of the board, does not understand the
significance of the Hanon Russell letter.
Bill Goichberg states that his "New Plan", which will drastically
reduce the number of copies of Chess Life and Chess Life 4 Kids
magazines being distributed to the members and may ultimately stop the
printing of these magazines altogether, will save the USCF $86,000 per
year.
However, it will also cause the USCF to lose $150,000 per year.
Hanon Russell pays the USCF $150,000 per year for among other things
the exclusive right to advertise his products in Chess Life, and it is
apparent from his letter that if the Goichberg "New Plan" goes
through. Russell will stop paying that $150,000 and he is already
considering filing suit against the USCF.
It is noteworthy that Hanon Russell is himself a lawyer, and he writes
"pending the results of legal research that is still ongoing".
Bill Goichberg is in water way over his head and it is apparent that
the best thing for himself and the best thing for the USCF would be
for him to resign. However, those of us who know Goichberg know that
he will never admit that he is wrong and he will never resign. He will
continue on his course which will sink the entire USCF.
Sam Sloan
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