The Executive Board voted this morning to increase ratings fees effective December 1st as follows:
Events submitted online: 25 cents/game (was 18 cents/game)
Events submitted to the USCF office on diskette: 40 cents/game (was 20 cents/game)
Events submitted to the USCF office on paper: 60 cents/game (was 40 cents/game)
Wow that is a sharp jump. 39% increase in on-line submission, 100% in disk, 50% in written
With those rates, ratings fees will be roughly breakeven against costs, including overhead.
Do people think the USCF should run the ratings department at a loss?
Absolutely not! What exactly are the costs involved? For instance, when a tournament is submitted online, without any problems and gets rated, what involvement does the office have?
Haven’t we also stopped providing paper rating lists? If so, that expenditure has been dramatically reduced.
I can see the need to increase the manually submitted reports but the online ones, where the TDs do most of the work is a little strange.
Chris Bird
Seems like paper submissions should be costing the USCF a good deal more than disk submissions. Reducing the relative cost disadvantage ratio of paper to disk seems to be sending the wrong message to tds.
Did they raise the minimum fees as well? If not, then I assume we won’t see a 40% increase in the revenue from online submissions.
I would think the message is aimed at the TD’s sending in disk, not those sending in paper. Those sending in disk should have an easier time converting to uploading than the TD’s using paper will have converting to disk.
75-80% of the events we get are being submitted online.
Of those submitted to the office, 2/3 are on paper.
If a TD has the ability to create a diskette with the three files on it, he should also have the ability to upload those files and submit the event online.
My best guess as to why someone might want to mail the event instead of submit it online has to do with membership collection issues (ie, the TD doesn’t handle the memberships, the sponsoring affiliate does) or with an aversion to using a credit card to pay for the event online.
When Bill Hall and I worked out the cost of rating games in May, the primary differences between online submission and mailed-in submission had to do with some additional work on the part of the accounting department to log in the report and process the payment and the time it takes for the office staff to upload the diskette or enter the rating report manually, review it, make corrections, and submit it for rating.
There are other costs, such as a significant portion of Walter Brown and Chuck Lovingood’s payroll expense to administer the ratings system. Those costs are there regardless of whether the event is submitted online or mailed to the office. Similarly, time spent working on programming and maintenance of the ratings database is, for the most part, not related to how the event was submitted. There are also general overhead and administrative costs.
The minimums remain $3 for events submitted online, $5 for events submitted to the office on diskette, $8 for events submitted on paper. (Corrected on 12/18/07.)
About 25% of the ratings fees are currently at the $3 minimum.
So for up to 25% of events they won’t see an increase. This doesn’t sound like a 40% increase to me.
OK then it is a 39% increase per game submitted. Since I’ve never run an event at the minimum fee then it will be a 39% increase for me.
Mike, I never said the department should run at a loss. The math is what the math is. I don’t often have those types of percentage increases on services I purchase.
Basically your explanation says to me that y’all did some more detailed cost analysis and determined that the rating system was costing more than you did when you set the fees previously. I’m good with that. That makes more sense than a cost increase argument because I doubt costs went up 39% in a year or two.
I know it is easy to get defensive due to the tone on these boards. But I was really just commenting that the increase was a large one. And it is. There may be good reasons, and it sounds like there are, but it is still a big jump which impacts larger event more due to no change in the minimum.
So, do we know the total costs associated with
(a) management of the rating system
(b) maintenance of the database supporting the rating system
(c) overhead associated with the rating system
Do we know the # of events and games rated
(a) online
(b) diskette
(c) paper
I am not objecting at all to an increase… I actually suggested one a while back with regard to potential “ratings only membership” price reduction.
Mike, is what you are saying that the way the USCF is operating is that last year’s EB is managing next years revenue and budgets? Wouldn’t it make more sense for the EB to publish and accept last years profit/loss and for next years EB to take the proposed budget from the finance committee and approve or modify and accept next years budget.
I suppose next years EB could meet and change the fees right after they are seated.
Not sure it is a 39% increase per game submitted if the cost doesn’t increase for that particular event.
I am not bickering with your analysis, I was just pointing out that if the board expected a 40% increase in total revenue from rating fees they won’t realize that result.
I too am opposed to such a drastic increase in fees. There was a big backlash when DeFeis raised the TLA fees. I would expect even more complaints from this increase.
It wasn’t long ago that to rate a scholastic tournament the fee was 10 cents per game on paper. Now it will be 25 cents. A 150% increase if I did the math correctly.
I would suggest analyzing the costs two ways, one for online submissions and one for paper submissions.
For example, in a perfect world with everyone submitting online rating reports, how much would it cost to run the rating system? Assuming that staff time would be minimized by this. Then analyze the cost of doing the paper based reports.
I would imagine it would show that the online ratings fee would either be ok at the previous rate or maybe even less, whereas paper submissions are where most of the expenditure is coming from.
With that in mind I think they should be raising the paper submissions high enough to try and persuade everyone to use the online submission system so that the current staff who are spending time on the paper submissions can do something else useful with their time instead.
Chris Bird
I think some TDs might see the issue like this. It now costs $10.00 to rate 40 games where it use to cost $7.20. A mere extra $2.80 and not that big of a deal. But to rate 400 games it will now be $100.00 vs $72.00. This is a $28.00 difference and starting to add up to something.
The question is does it take the computer an extra $25 to rate an additional 360 games?
With paper reports that might be the case, but online submissions?
My concern in the past has been having the same fees for blitz tournament as we do for regular events. If a club runs a 16 player round robin blitz tournament the rating fee will now be $30. If the players paid $7 each to play 25% of the entry fees are being used to cover the rating of the event. If the organizer keeps any of the fees to pay the TD or cover overhead there won’t be much left for prizes.
I would think that the issue for online submission is with the number of players not the number of rounds. Having a cap on the number of rounds used for the calculation of the fee might encourage more blitz rated events.
That’s obviously a loaded way to phrase it. I remain unconvinced by your methodology in analyzing the costs and benefits. To put it crudely, higher rating fees > fewer tournaments > fewer memberships.
Question: Given the approximate number of games rated every year, how much income will a $.07/game increase bring in? (Ignore for the moment my earlier point about a likely decline in the total.) How does this amount compare to what would be saved by, say, holding only three EB meetings per year?
In FY 2006-07 we rated 15,398 sections and 518,806 games.
12,971 sections (84%) were submitted online.
In terms of games, 469,311 (90%) were submitted online, so ignoring the $3 minimum issue a 7 cent increase would generate a little under $33,000 in additional revenue from games submitted online. (Why am I tempted to hum ‘7 1/2 cents’ from the Broadway musical “The Pajama Game”?) I think that’s significantly more than the cost of one EB meeting.
When I ran these numbers earlier this year, at the time Bill Hall and I were working on some cost estimates, it was for calendar 2006, the percentage of events being submitted online has gone up a bit since then.
When I did my financial analysis in 2002, I estimated that at the time the cost to rate a game was between 35 and 45 cents. Now I estimate it is somewhere between 25 and 35 cents.
At that time 2/3 of events were being submitted on diskette, which was and still is quite a bit faster than entering them from paper, but the error-checking time is the same, and nearly all events submitted to the office have to be corrected before they are ready to be rated.
Does it cost more to rate a 200 game event than it does a 50 game event? Yes, because larger events are more likely to have corrections in them and have other issues that cause the ratings department to have to review those events after they are rated, such as class prize floors.
We could put some kind of cap on the ratings fee for large events, but then we’d have to raise the per game fee to keep it revenue neutral, which would penalize small organizers.
As an organizer and former club president, I understand the issue regarding blitz games, but the time control doesn’t affect the cost of rating a game, so I can’t see any economic justification for charging a lower ratings fee for quick chess games, unless someone can prove to us that lowering the fee would cause a dramatic increase in the number of quick-only games that are rated.
No I can’t prove that there will be more blitz tournaments rated if there is a cap on the fee. But it is obvious that the economics are not there currently for there to be more blitz rated events.
[code]FY 2005-06:
sec_rtgsys count sum
D 8837 291557
F 8 -N-
Q 1757 45722
R 4768 189619
FY 2006-07:
sec_rtgsys count games
D 9364 309648
F 19 -N-
Q 1718 41272
R 4297 167886[/code]
Q = Quick only
D = Dual Rated
R = Regular Rated
F = FIDE events used to adjust USCF ratings