Pearl Day debt to non-profits impacts Gaydar

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imageMonths after underwhelming crowds dinged the financial hopes of Pearl Day last September, organizers have yet to pay the three non-profits they partnered with the $9,000 they promised to deliver.

And now that two of the owners of Pearl Day have been hired by Gaydar Magazine, LLC – the new owner of the Southern Voice and David magazine names and assets – the unfulfilled Pearl Day pledges are clouding the publishing company’s relationship with the three beneficiaries, which are the Atlanta Pride Committee, CHRIS Kids and Pets Are Loving Support.

Pearl Day – a once popular LGBT event that stagnated in recent years – announced new owners and a revived event at Six Flags Over Georgia to great fanfare in March 2009. They set an ambitious schedule of events leading up to Pearl Day on Sept. 11. They hoped for at least 10,000 people to attend and named three beneficiaries, which would receive donations in exchange for lending their names and support to the for-profit event.

Atlanta Pride was set to receive $5,000, an amount that could have reached as high as $15,000 if attendance surpassed expectations. Chris Kids was supposed to receive $3,000 and PALS was to get $1,000.

Six months after the event drew what organizers estimated to be 2,400 people – some crowd estimates were even lower – the three beneficiaries haven’t received any funds from Pearl Day, and an owner of the event says other vendors they used to stage the event are also owed money.

image“When we did our initial budget, with our vendors providing collaborative support, when we all sat at our marketing meetings, we all came to the same number to be successful,” says Brian Sawyer, one of four Pearl Day owners and one of the public faces behind the event. “To be minimally successful, we needed 3,000 paying tickets and closer to 4,000 people in the park. Obviously, we came in substantially lower than that.”

Sawyer (second photo, right) says about 1,100 tickets were sold, with several hundred others given out as comps and distributed to vendors. He says that the low attendance and last-minute demands from Six Flags impacted the event’s performance and severely dampened their revenue projections. Pearl Day now owes money to several vendors, including Six Flags and the three beneficiaries, Sawyer says.

“Unfortunately, the community did not support this. They met it with a lot of skepticism. We had a very small handful of people who came. We had a lot of people, post-mortem, tell us that people just didn’t know that it was going on. I personally find that hard to believe,” Sawyer says.

Organizers have no plans to hold a Pearl Day event in 2010, he says.

“The fact that it was publicized as much as we felt it could have been, certainly within the budget we had, for 2,000 people to show up, it is disappointing. It is very difficult to do anything nice in this city. If it is a success, people want to take advantage of it. If it is a failure, they want to crucify you,” Sawyer adds.

Chip O’Kelley (second photo, left), the Pearl Day vice president and one of its owners, did not respond to email and telephone requests for comment.

Sawyer says the three beneficiaries – Atlanta Pride, Chris Kids and PALS – are viewed by Pearl Day as vendors, similar to alcohol suppliers, limousine services and performers, which included Kelly Rowland, Kristine W, Frenchie Davis and Junior Vasquez. Sawyer couldn’t specify how many vendors are owed funds, but said the organization is working with its attorney to sort out the financials.

“We had more people owed than a first year in business operation can support. We are trying to be as amicable and fair to everyone. It isn’t a matter of a charity not getting their money versus the limo company. Every vendor was treated fairly,” Sawyer says.

“As it stands right now, our intent is to take what is left after Pearl Day finished – we have hired a professional individual, including an attorney, to review everything that we have – and fairly address vendors. It is our position that every vendor should be treated equally, even one that is owed $10. It is a dynamic thing that has not concluded. There is potential for every one of our vendors to be paid amicably and fairly based on services they provided. We have made no statement that we are not going to pay. But like everything that happens, it takes time,” Sawyer adds.

Broken promises as non-profits go unpaid

imageThe three beneficiaries say Pearl Day organizers have left behind a string of broken promises and unfulfilled financial pledges. They add that the experience has left them frustrated over the lack of funds and communication with organizers since the event last September and hesitant to work with Gaydar now that it hired Sawyer as its chief financial officer and O’Kelley as an employee.

“All I know is that we have a contract, we were due $5,000 and we haven’t been paid $5,000,” says JP Sheffield, Pride’s executive director. “We’ve issued invoices numerous times in addition to a $1,000 installment payment at their request, which hasn’t been paid. We are not interested in making it any more dramatic than that.”

“There were people who did buy tickets and did that believing that they were supporting local non-profit groups – three very well-established LGBT non-profit groups. That is unfortunate that people believed that by buying a ticket that they were supporting our organization and it didn’t work out that way,” Sheffield adds.

Pearl Day pledged $5,000 to Pride, an amount that was supposed to grow to $15,000 if attendance surpassed 15,000 people. Sheffield says the funds were earmarked for Pride’s operating budget, which has taken severe hits in the last two years due to the recession and a move to the Atlanta Civic Center in 2008 that was prompted by the city booting festivals out of Piedmont Park.

“The funds were supposed to go to help pay for the festival. We were fortunate enough that we had a much better year in 2009 than in 2008 and that $5,000 didn’t end up being the difference in whether we kept our doors open. That very well could have been the case,” Sheffield says.

Pearl Day also pledged $3,000 to CHRIS Kids, which includes a transitional living facility for LGBT teens among its many programs. The funds were earmarked to support the organization’s LGBT efforts, says Beth Keller, development director for CHRIS Kids.

“In terms of a business person, they are probably viewing us as one of many vendors that didn’t receive funds,” Keller says. “I view it very differently. I view it from the children and families and every dollar that is raised supports them. We probably didn’t make the best judgment in partnering with them. It felt safe because we had the contract.”

For PALS, which provides pet care for critically ill and disabled people, the $1,000 from Pearl Day would have “helped a lot,” says Kevin Bryant, the group’s executive director.

“They took advantage of the non-profits that were involved in this and used our reputations to promote their event and yet we got nothing out of it,” Bryant says. “There was a lot of stuff told in the whole scheme of things that was incorrect. I had high hopes this was a revamping of Pearl Day because it has gotten some bad raps in the past. But it didn’t turn out like I thought it would. I was just hoping it was on the up and up, but it didn’t turn out that way.”

Dispute with Atlanta Pride

imageWith PALS and Chris Kids, Sawyer says those groups met their obligations and are owed the money Pearl Day promised. But he adds that Pride did not meet some of its obligations spelled out in the agreement between both organizations. Sawyer says that Pride hasn’t received its funds, in part, because the organization used Pearl Day VIP tickets valued at more than $8,000 without providing tickets in exchange for the Pride event at the Georgia Aquarium and refused to provide a booth to Pearl Day during the Pride festival last year.

“Part of [Pride’s] obligation was they were to have a presence at the event. Instead of having a presence, the board members showed up with their free tickets and enjoyed their day at Six Flags at Pearl Day expense,” Sawyer says.

“Ten people want six slices of pie. We communicated to the three charities that they were no more or no less than the artists – that they would be equal to any other vendor we had. The fact that they were a non-profit was over exaggerated. That is not what we were using them for as vendors,” Sawyer adds.

Sheffield (fourth photo) said Pride received 10 comp passes for Pearl Day, including two VIP passes and disputed that the value of those tickets is anywhere close to the $8,000 retail value Sawyer put on them. He says that as the Pride festival neared in late October, Pearl Day “didn’t make good on the payment,” so Pride did not provide complimentary tickets to Pearl Day for the event at the Georgia Aquarium and refused to provide a booth.

Sheffield says he warned Sawyer two weeks before the Pride festival that if payment wasn’t received before the event – it was due from Pearl Day in early October – that they wouldn’t provide booth space.

“We couldn’t give up real estate if we couldn’t receive payment from them and the payment was already later. If payment is due, we are not going to continue to delver goods,” Sheffield says.

“At the end of the day, the contract wasn’t about the frills of getting VIP tickets. It was about Pride being a promotional sponsor and beneficiary of the event. They can use whatever excuses they want to use. But they made commitments to non-profits, and they didn’t follow through. They can make it right and they can get PALS paid, CHRIS Kids paid and they can get Atlanta Pride paid or they can live with the fact we won’t work with them anymore,” Sheffield adds.

Pearl Day ‘scandal’ implications for Gaydar publications

Sawyer recently joined Gaydar as it shuffled its corporate structure, changed owners and, last month, successfully stepped in to purchase the assets of Southern Voice and David, which went into bankruptcy when its parent company collapsed last November. O’Kelley’s formal affiliation with Gaydar dates back further. He’s been listed in Gaydar magazine as operations manager as recently as January and took the reins of the business operations of the Atlanta Free Press, a publication of the same company, in December shortly before it stopped publishing. Company officials have said recently O’Kelley remains employed by Gaydar but has no operational responsibilities.

Though Sawyer and O’Kelley remain Pearl Day owners, they were not Gaydar employees in the build up to Pearl Day last year. But their current affiliation with the publishing company is clouding its relationship with the three non-profits as it re-brands and re-launches David and Southern Voice. Pride and PALS say they won’t work with Gaydar over their experience with Pearl Day, while CHRIS Kids says it will “have to be very careful in our dealings” with the company.

“What it means for Pride is that we have to treat this in the same way as we do for those who don’t make good on a debt to us. Our policy is that if you owe us money, we can’t work with you until that debt has been fulfilled.,” Sheffield says.

“People fail in business every day. People make bad business decisions every day. I don’t think making bad business decisions necessarily speaks to someone’s character. This isn’t about going after Brian or Chip for not getting paid. It is more about a business integrity issue. You have to close out one thing before you go on to the next. If you can’t make good in this one realm of the community before you move on to the next realm of the community, it is worrisome,” Sheffield adds.

imageBryant (bottom photo) says he holds Sawyer and O’Kelley responsible for the debt, given their ownership roles in Pearl Day. And since Sawyer is now an executive with Gaydar, PALS won’t be involved in its publications, Bryant says.

“It’s going to be hard to go further in your career in any other venture when you don’t have the support of these organizations, especially Pride,” Bryant says.

Matt Neumann, a co-owner of Gaydar, says that the company had no other affiliation with Pearl Day than being a media sponsor, and that it shouldn’t be linked to the failure of its organizers to pay the three beneficiaries.

“Brian works for me, yes. He was with Pearl Day, yes. If they want to make the association and not do anything with me, that’s their choice. It is wrong to sit there and start examining employees,” Neumann says.

“I want financials on all the members of the Pride board before I do business with them. Before we work with Pride or any of the other charities, I’d like to do a background check on them and if I find something, I won’t do business with them. Turn about is fair play,” Neumann adds.

Neumann also defended Sawyer, saying he hired him based on his management style “and thought that would be an asset to our company.”

“Brian has stepped up to the plate and done really good things for the company. Out of all of the people I have employed, he has been the best asset I have,” Neumann says.

But the publisher also criticizes the decision of Sawyer and O’Kelley — and the other Pearl Day owners — to guarantee donations to beneficiaries without it basing them on the financial performance of the event as a “stupid business move.”

“If Pearl Day did a guarantee to the organizations, rather than base it on attendance and revenue, that is a stupid move but that is not malicious. I think guaranteeing a charity anything is ridiculous. It needs to be based on performance. The fact that it wasn’t set up like that speaks to a bad decision,” Neumann says.

Gaydar ‘treated like the scourge of the earth’

Neumann also says that associating Gaydar with Pearl Day and refusing to do business with his company is another round of the close scrutiny and criticism he’s received since purchasing the assets of Southern Voice and David. After the purchase, which closed last week, some former employees of Gaydar aired concerns about not being paid for their work and former readers of Southern Voice expressed concern over the fate of the newspaper’s extensive archives. Neumann said the the former employees have been paid and that the archives were donated to the Atlanta History Center.

And as Gaydar moved last week to close its purchase of the Southern Voice and David magazine assets, it also worked to settle a nearly $40,000 lawsuit it faced from an Atlanta printer for unpaid printing bills that dates to October and November.

“Since Gaydar came out and especially since the David and SoVo thing, these organizations are acting as the party of no. They are worse than the damn tea baggers. This is the tea bag mentality. If I were to fire Brian and Chip tomorrow because of the Pearl Day scandal, this would continue with something else. I’m not going to do anything because it doesn’t matter. They are never going to accept it. My experience with the charities in this town is that they haven’t stepped up for me when I’ve stepped up for them. We are treated like the scourge of the earth,” Neumann says.

But even as Neumann says it’s unfair to link Pearl Day to Gaydar, he and Sawyer offered to donate advertising in their publications valued at $3,200 to CHRIS Kids as a settlement to Pearl Day’s debt to the non-profit. Sawyer says the offer was “tentatively accepted” by CHRIS Kids “barring review from the board.”

Keller, CHRIS Kids’ development director, says she discussed the offer with Neumann and Sawyer, but that the company hasn’t formally submitted it and it isn’t being considered by the CHRIS Kids board. Keller says the debt with Pearl Day and any agreement with Gaydar are separate matters and that an advertising donation couldn’t be made in exchange for the Peal Day debt.

“We’re just going to have to be very careful in our dealings. I can’t guarantee that there are no partnerships because that is very black and white. But I can say that we are being very careful with everything. We’ve learned from the situation,” Keller says. “The Pearl Day debacle is separate from Gaydar. We’re not jaded. We’re not upset. We’re not frustrated. We want to move on. We just want to warn people.”


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