5.6 Ending the Membership Extension

[Vladimir Drkulec]

The CFC did decide to end the membership extension beginning November 1st, 2020. The voting members from Manitoba Ken Einarsson and John Remillard sent us a letter on this topic. This is cut and pasted from an attached Word Document.



Vlad: The Manitoba Chess Association (MCA) is inquiring about the decision to reinstate membership dues in light of COVID-19. The MCA strongly believes that for the health and safety of all chess players, membership dues should continue to be deferred until we hear from the various medical authorities that it is safe to get back to as close to normal business practices. We realize that the business model of the Chess Federation of Canada (CFC), the MCA and other provincial associations will potentially be devastated until we return to normal business practices. The return to normal business practices should only occur after seeking and obtaining provincial medical board approval and clearance to return to past practices.

A couple of points on re-instating membership dues:

- By reinstating the membership dues, we believe a bad message is given to the chess player at large as they are also facing financial hardship as well. If the re-instatement of fees are because financial difficulties of the various associations, we should not go to the membership but look to other means such as Canada Emergency Business Account (CEBA) if we qualify.

- Re-instatement of the membership to us looks like a cash grab in tight times, as we believe right now the “value for money” aspect of the membership is not there and we must wait until this aspect is properly re-established. We then must strategize how we can bring back our past memberships:

- You can indicate that we do have some on-line tournaments but this is not at the same level of activities of pre-COVID. We believe that it will be quite difficult to get back the chess player after COVID as they might have moved onto other safer options in their opinion.

- There have also been some in person tournaments as well, although we consider this unsafe at this time. To get the buy in of the chess player the CFC should develop a minimum set of protocols/guidelines/policy statement for the organizers to follow if the tournament is to be sanctioned by the CFC. This might also be the norm after COVID, as organizer might have to develop a “COVID safe plan” which talks about the sanitization of chess equipment, spacing of boards, maximum number of participants in the tournament etc. Then the question would these plans be submitted to the CFC so the tournaments from the organizer can be considered as a CFC sanctioned event? At the next governors meeting, the MCA would like the membership fee issue be an item for discussion at the meeting by all the governors.

[Vladimir Drkulec]

The CFC did decide to end the membership extension beginning November 1st, 2020. The voting members from Manitoba Ken Einarsson and John Remillard sent us a letter on this topic. This is cut and pasted from an attached Word Document.



Vlad: The Manitoba Chess Association (MCA) is inquiring about the decision to reinstate membership dues in light of COVID-19. The MCA strongly believes that for the health and safety of all chess players, membership dues should continue to be deferred until we hear from the various medical authorities that it is safe to get back to as close to normal business practices. We realize that the business model of the Chess Federation of Canada (CFC), the MCA and other provincial associations will potentially be devastated until we return to normal business practices. The return to normal business practices should only occur after seeking and obtaining provincial medical board approval and clearance to return to past practices.

We really cannot return to normal business practices at this time. We do have people playing CFC chess online. If we cannot collect memberships then we will likely have to look at rationalizing services and perhaps shutting down until after vaccines become largely available. We realize that we are not ready to go back to normal but we do have a new normal where we have many players playing in CFC events online. We are going to suffer losses but we will have to start aiming for a new normal where we can at least continue to exist.




A couple of points on re-instating membership dues:

- By reinstating the membership dues, we believe a bad message is given to the chess player at large as they are also facing financial hardship as well. If the re-instatement of fees are because financial difficulties of the various associations, we should not go to the membership but look to other means such as Canada Emergency Business Account (CEBA) if we qualify.

So far we do not qualify because of the way we are structured, though this boggles my mind somewhat. We will have to continually check as the program changes are made to see if we do qualify. In any case, in the best case if we did qualify we could get a $10,000 grant and a $30,000 repayable loan through this program. This $10,000 will keep us going for two months.





- Re-instatement of the membership to us looks like a cash grab in tight times, as we believe right now the “value for money” aspect of the membership is not there and we must wait until this aspect is properly re-established. We then must strategize how we can bring back our past memberships:

Cash is the lifeblood of every business including the CFC. One thing that we have instructed Bob to do is work on collecting receivables which includes rating fees and CFC memberships collected but not yet remitted to the CFC. If we can collect on those sums we can continue operations for several more months.




- You can indicate that we do have some on-line tournaments but this is not at the same level of activities of pre-COVID. We believe that it will be quite difficult to get back the chess player after COVID as they might have moved onto other safer options in their opinion.

- There have also been some in person tournaments as well, although we consider this unsafe at this time. To get the buy in of the chess player the CFC should develop a minimum set of protocols/guidelines/policy statement for the organizers to follow if the tournament is to be sanctioned by the CFC. This might also be the norm after COVID, as organizer might have to develop a “COVID safe plan” which talks about the sanitization of chess equipment, spacing of boards, maximum number of participants in the tournament etc. Then the question would these plans be submitted to the CFC so the tournaments from the organizer can be considered as a CFC sanctioned event? At the next governors meeting, the MCA would like the membership fee issue be an item for discussion at the meeting by all the governors.

There is no doubt that we are going to take a multiyear hit from the COVID pandemic. It may be late into 2021 and possibly 2022 before we can hope to return to some semblance of normal. It is not realistic to expect that we can continue to supply services and pay a salary to Bob Gillanders who is essential to continuing to operate without any income coming in. At some point we may qualify for some government assistance but it will be somewhat limited.

[Vladimir Drkulec]

Re: Vlad - CFC letter
You replied on Thu 2020-11-26 8:00 PM


Ken Einarsson <Email redacted>


Thu 2020-11-26 7:09 PM

Hi


We do agree that COVID is bringing a lot of entities to the brink of financial ruin. A lot of clubs which existed prior to COVID may not exist after COVID. Even us we will survive but are unsure of our status after COVID. As currently we have space at the University through their community outreach program. After COVID we are unsure how they will re-invision their program as their first priority will be the safety of their students.


It is just we believe that we believe that we cannot fully rely on the chess player as they are also facing hardship as well. Possibly we can come with some form of shared concept where the chess player pays partial and we find other funding sources.

On Thu, Nov 26, 2020 at 2:11 AM Vladimir Drkulec <> wrote:

Hello Ken and John,



We can certainly make this letter part of the discussion in the COVID section of the meeting. I don't think there is any expectation that people will suddenly start holding tournaments, but we are having junior online events and FIDE events where the players are required to be members and we can at least stop the bleeding a bit. If we extend the deadline any further we will probably need to start pulling money out of the foundation funds in order not to run out of money this coming year. Running out of money means going out of business. We still have to pay FIDE and pay Bob's salary with or without any revenues. Collecting some of the receivables will also prolong the time before we need to tap foundation funds.



So far it doesn't appear that we qualify for any of the current relief programs from the government, though I find this surprising. In any case, those programs provide $10,000 in grants and $30,000 in loans which we would still have to pay back and pay interest on. The grant would buy us a month and a half if we were eligible. We will probably still get about $10,000 or so from the foundation.



Vlad




From: Ken Einarsson <>
Sent: November 25, 2020 11:53 AM
To: John Remillard <>; Vladimir Drkulec <>
Subject: Vlad - CFC letter

Vlad


Here is a letter from both governors for Manitoba which we would like to discuss at the next governors meeting.

[Vladimir Drkulec]

Finding other funding sources would be wonderful but I don't think realistically that we can hope for someone to step in and pay a portion of the membership fees.

I would be interested in what others think.

[Paul Leblanc]

Given that most of our activity has been online and Quick rated, many players are opting to purchase tournament memberships for $8 adult or $4 junior, there is no financial burden for players.
The BCCF announced the end of free membership extentions about a month ago and there have been no complaints that I am aware of.

[Les Bunning]

It is unrealistic to expect players to pay CFC dues when they are not playing. You may be able to collect from online national championships but I suspect the revenue involved is not worth the effort. The CFC should reduce its expenses to the absolute minimum and seek a loan or perhaps a grant from the chess Foundation. The Chess foundation is there to support the CFC I can think of no better use than for it to help the CFC financially in this time of crisis.
Les Bunning

[Vladimir Drkulec]

We don't expect players to pay CFC dues when they are not playing but there are people playing. It does not make sense to shut down totally as we might be looking at a lump payment of six months pay and then we aren't offering any services anymore. We are in a tough place but if everyone is getting vaccinations we should be able to get back to normal in 2022 with the possibility of an enhanced normal because of our experience of moving online.

We have about $55,000 in cash on hand. I believe that we have receivables that should be collectible which push the crisis out as much as a year. We have to push more aggressively into online play but before that is possible we need to get a handle on online cheating and allegations real and unfounded of online cheating.

[Lloyd Lombard]

I realize this is likely "out-there", "crazy", etc. but since we're in a crunch, we need to throw ideas around. That said, could the CFC create its own profitable "online" chess playing platform when considering the competition of Chess.com, Lichess, and numerous others ? In business, the guy who has the best widget wins (ie. it would have to be a "really" great playing platform).

[Vladimir Drkulec]

I realize this is likely "out-there", "crazy", etc. but since we're in a crunch, we need to throw ideas around. That said, could the CFC create its own profitable "online" chess playing platform when considering the competition of Chess.com, Lichess, and numerous others ? In business, the guy who has the best widget wins (ie. it would have to be a "really" great playing platform).

I have no doubt that it is possible to create a playing platform but we do not have the numbers, the personnel, or the capital to create a successful playing platform to compete with the big guys.

[Fred McKim]

Anyone who had a valid CFC membership on Mar 1, 2020 received an 8 month extension to their membership. I think our best offer to our members would be to sell memberships, until further notice, with a bonus of 6 months added on - in other words a regular membership would be for 18 months. Financially, I don't think simply extending the memberships again is a good plan.

The new normal for 2021 is online chess and in-person matches or 4 player round-robins.

Fred McKim
CFC Treasurer

[Vladimir Drkulec]

Anyone who had a valid CFC membership on Mar 1, 2020 received an 8 month extension to their membership. I think our best offer to our members would be to sell memberships, until further notice, with a bonus of 6 months added on - in other words a regular membership would be for 18 months. Financially, I don't think simply extending the memberships again is a good plan.

The new normal for 2021 is online chess and in-person matches or 4 player round-robins.

Fred McKim
CFC Treasurer

I don't think we can really afford to discount at this point. Most of the memberships sold will be people that are playing in CFC online events. We would really have to reduce costs and our costs are very lumpy. FIDE fees and salary. We need to survive until everyone is able to get vaccinated.

[Halldor P. Palsson]

I have been telling CFC members that play in my tournaments in Ottawa to renew for 2021.

We need the support. I have no idea when we will be allowed back into the RA Center to start up the chess club and the weekend tournaments again.

[Vladimir Drkulec]

It is not all gloom and doom. We will no doubt lose some members permanently but it is a recurring pattern with the CFC that a significant percentage of our players stop playing every year. These in turn are replaced by new players. The opportunity we will have once it is possible to play tournaments again will be that there will be a larger pool of players favourably disposed towards playing chess thanks to the pandemic and online play. Add to this, a bump from "The Queen's Gambit" and we should be ready for a return to better than normal that will take as long as three or four years. The good news is that we have been prudent for years and have built up reserves that should allow us to survive this pandemic. The bad news is that until we can play face to face again we are in for some pain. We do have to jump into online play but not to try to start an online platform. I am sure that in the chess community there is the expertise that would allow this but there is no real opportunity there. We would quickly lose even more money and we would not move the ball forward.

We do need to find a safe platform where people won't be able to cheat and people won't be accused falsely of cheating. In the context of online CFC play we will probably need some variation of what was done at the National Online Youth program put on by Victoria Doknjas, Gergely Szabo and the Juniors to Masters program. Many arbiters monitoring a Zoom call, all separately recording the two cameras on every participant, a team of strong players going over the games. That is the future for the next two years for CFC rated play. It is easy enough to catch suspicious play after the fact but some of the metrics that the online platforms are using are just wrong.

[Fred McKim]

I don't think we can really afford to discount at this point. Most of the memberships sold will be people that are playing in CFC online events. We would really have to reduce costs and our costs are very lumpy. FIDE fees and salary. We need to survive until everyone is able to get vaccinated.

This is not my preference, as I agree with you, but offered up as a compromise if there is too much opposition to the status quo.

[Fred McKim]

In the context of online CFC play we will probably need some variation of what was done at the National Online Youth program put on by Victoria Doknjas, Gergely Szabo and the Juniors to Masters program. Many arbiters monitoring a Zoom call, all separately recording the two cameras on every participant, a team of strong players going over the games. That is the future for the next two years for CFC rated play. It is easy enough to catch suspicious play after the fact but some of the metrics that the online platforms are using are just wrong.

While this may be possible for some higher profile events, the run of the mill one day club swiss doesn't have the infrastructure for this .... and instead goes for charging a token entry fee with small prizes.

[Lyle Craver]

I had not heard that we might qualify for a federal interest-free loan / grant but could research this. Our store has taken the first slice of this loan (which is $40k which comes with a $10k grant if repaid by 12/31/2021 and which a later $20k has been added with an additional $10k grant if repaid by a date I don't have committed to memory - our store has not taken this yet though we might)

I haven't really looked closely at the terms so can't tell you with certainty whether the CFC might qualify. I do know that some non-profits have qualified and received the loan.

It's NOT free money but the terms are very good.

[Lyle Craver]

Fred's "18 months for 12" sounds plausible though would need to be properly timed. Obviously mid December 2020 isn't it but might well be by spring especially if by then the vaccine roll-out is well under way.

Fundamentally in a standard tournament boards could easily be 2 metres apart but you can't reasonably protect white from black or vice versa at an individual board even with masks. This perception will undoubtedly change as Pfizer and Moderna become more familiar names to Canadians.

[Pierre Dénommée]

Fundamentally in a standard tournament boards could easily be 2 metres apart but you can't reasonably protect white from black or vice versa at an individual board even with masks.

A solid sheet of plastic is required is required as shown in page 5 of this document https://www.fqechecs.qc.ca/pj/documents/directeurfqe/20200831/COVID-19-%C3%89CHECS.pdf . Combined with masks, this will provide a 96% protection. Unfortunately, basic probabilities (see Bernoulli trial) easily demonstrate that the probability of getting COVID-19 increase with each game. A 96 percent per game means a 4 percent probability of infection per game and playing multiple games will increase significantly the probability of infection.

[Paul Leblanc]

Chess activity in BC is about half of what it was when we had live chess. The rating fee and membership revenue from our online events is about a quarter of what we were getting when we had live chess.
I don't think it is wise to reduce that even further.
Absolutely no one is complaining about the cost of CFC memberships out here.

[Vladimir Drkulec]

Chess activity in BC is about half of what it was when we had live chess. The rating fee and membership revenue from our online events is about a quarter of what we were getting when we had live chess.
I don't think it is wise to reduce that even further.
Absolutely no one is complaining about the cost of CFC memberships out here.

I agree with you on that. People expect us to maintain services as revenues collapse so I really don't think that a schedule of discounts would lead to anything more than a rapid drain of the foundation funds.

Clubs that have collected CFC memberships and have outstanding rating fees should remit amounts owed to the CFC. Hopefully Bob is catching up with billings and collection of receivables. Unfortunately the Rockefellers are not donating millions to the CFC like they do to the USCF. Lets get through this.

[Lloyd Lombard]

I had not heard that we might qualify for a federal interest-free loan / grant but could research this. Our store has taken the first slice of this loan (which is $40k which comes with a $10k grant if repaid by 12/31/2021 and which a later $20k has been added with an additional $10k grant if repaid by a date I don't have committed to memory - our store has not taken this yet though we might)

I haven't really looked closely at the terms so can't tell you with certainty whether the CFC might qualify. I do know that some non-profits have qualified and received the loan.

It's NOT free money but the terms are very good.

Our golf course borrowed the $40,000, invested the $30,000 and spent the $10,000. We intend to pay back the $30,000 before it'd due and thus obtain the $10,000 grant. We're shut down for the Winter and I'm told that we're not eligible to apply for the extra $20,000 because of it (ie. you have to be operating to apply). Seems to me that if the CFC can get a free $20,000, that it's something we should be looking into if it's not too late.

[Vladimir Drkulec]

Our golf course borrowed the $40,000, invested the $30,000 and spent the $10,000. We intend to pay back the $30,000 before it'd due and thus obtain the $10,000 grant. We're shut down for the Winter and I'm told that we're not eligible to apply for the extra $20,000 because of it (ie. you have to be operating to apply). Seems to me that if the CFC can get a free $20,000, that it's something we should be looking into if it's not too late.

I believe we have until the end of March 2021 if my memory of the government website is correct. I will be talking to Bob Gillanders, Hal Bond and Fred McKim about this tomorrow, I suspect.