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On October 29 2010 07:21 LegendaryZ wrote:
Is it really that surprising to people that a non-profit organization doesn't post profits? I would have thought this much would just be common sense...
Except, as has been stated a million times, a company is still non-profit if the board members are writing themselves big 6-figure cheques every now and then or giving inflated contracts to companies owned by family members etc.
Of course everything they do could be above the board, which is the point of contention, we simply don't know. Blizzard doesn't even know, although I suspect they suspect the former possibility.
Ultimately we can theorise and legalcraft as much as we want, we aren't going to know anything until this is settled in court.
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On October 29 2010 07:11 Waxangel wrote:Show nested quote +On October 29 2010 06:26 Redmark wrote:On October 29 2010 06:22 Waxangel wrote:
Accounting is a complicated and possibly shady business, for corporations and non-profits alike. Does this mean that, as I suspect, there's no point in TL users speculating as to which side is in the right without real knowledge? As has always been the case.
I suppose that means that people should stop being spoon fed all this propaganda from these large corporations. But where shall I place all my fanboyism spirit then?
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Man, each side releases statements putting them as the good guy and blaming the opposition, I don't know who to trust anymore.
Having said that I think Blizzard should reduce the fee, in order for SC1 e-sports to continue.
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thank you for posting this. I really hope they... find some common ground here. as far as I can tell Gretech is just trying to milk as much as they can from Kespa. Now that is unreasonable.
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On October 28 2010 22:51 cocoa_sg wrote:
Thank you, Waxangel, for translating! More financial transparency is a good thing.
I agree. The hairy part of this law suit is Blizzard is going to Korea and fighting a law suite were non-GAAP accounting standards are utilized. While GAAP standards are not perfect, they're generally accepted as the most transparent accounting standards in the world. However one thing is sure, Kespa is sitting on the sidelines for not reaching agreement while others are not.
If the Korean courts do reach a ruling where they favor Kespa, they ought to remember who controls the medium for playing SC2...Blizzard! How smart of an idea was Battlenet 2.0? We may not like it but hell, shareholders fkn love it.
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On October 29 2010 07:21 LegendaryZ wrote:
Is it really that surprising to people that a non-profit organization doesn't post profits? I would have thought this much would just be common sense...
No firm is obligated to publicly post profits unless you're publicly traded. In addition, if you're from another country besides the U.S. the financial data is more often than not less transparent.
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OGN made a contract to have a starleague with Gretech, right? They managed to do that while still having starleague proftable. Why couldn't MBC and KeSPA take a page out of their book?
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On October 29 2010 07:33 RisingTide wrote:Show nested quote +On October 29 2010 07:21 LegendaryZ wrote:
Is it really that surprising to people that a non-profit organization doesn't post profits? I would have thought this much would just be common sense... Except, as has been stated a million times, a company is still non-profit if the board members are writing themselves big 6-figure cheques every now and then or giving inflated contracts to companies owned by family members etc. Of course everything they do could be above the board, which is the point of contention, we simply don't know. Blizzard doesn't even know, although I suspect they suspect the former possibility. Ultimately we can theorise and legalcraft as much as we want, we aren't going to know anything until this is settled in court.
That is true for any non-profit entity. Would you accuse the Red Cross of doing this just because they technically could? I really don't get why people seem to think there's a lot of money being made in the Starleagues and Proleague. Where would all of this supposed money to pay for these supposedly ridiculous salaries and contracts come from?
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On October 29 2010 08:31 LegendaryZ wrote:Show nested quote +On October 29 2010 07:33 RisingTide wrote:On October 29 2010 07:21 LegendaryZ wrote:
Is it really that surprising to people that a non-profit organization doesn't post profits? I would have thought this much would just be common sense... Except, as has been stated a million times, a company is still non-profit if the board members are writing themselves big 6-figure cheques every now and then or giving inflated contracts to companies owned by family members etc. Of course everything they do could be above the board, which is the point of contention, we simply don't know. Blizzard doesn't even know, although I suspect they suspect the former possibility. Ultimately we can theorise and legalcraft as much as we want, we aren't going to know anything until this is settled in court. That is true for any non-profit entity. Would you accuse the Red Cross of doing this just because they technically could? I really don't get why people seem to think there's a lot of money being made in the Starleagues and Proleague. Where would all of this supposed money to pay for these supposedly ridiculous salaries and contracts come from?
It's not an accusation, but a possibility, which is what I'm saying, we haven't got a clue and probably never will.
However, while a doubt KESPA is doing anything too underhanded, the fact that their board is made up of representatives of some of the largest Korean companies makes it significantly more likely than the Red Cross.
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Actually, in the US and most European countries, nonprofits' financial information are public record. I'm not sure if SK has different rules, but for an organization that wields the word "nonprofit" like a big stick to hit everyone over the head with, it's still rather curious they obscure their accounting books so.
Especially considering how the keep emphasizing how they are "reinvesting all their profits back to the community," yet they won't say how much they have "reinvested," which is in sharp contrast to how unshy they are about their losses. And let's not even go into how they have can any profit to invest with to begin with when they are consistently posting losses. That's such a ridiculous oxymoron it has to either be a mistranslation or very lackluster politician-speak.
I really don't want to be so cynical, but for an organization that tries so hard to present itself as charitable and just all around "the good guy" so as to be sympathized by the community, Kespa's whole situation just looks so shady at best.
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On October 29 2010 08:31 LegendaryZ wrote:Show nested quote +On October 29 2010 07:33 RisingTide wrote:On October 29 2010 07:21 LegendaryZ wrote:
Is it really that surprising to people that a non-profit organization doesn't post profits? I would have thought this much would just be common sense... Except, as has been stated a million times, a company is still non-profit if the board members are writing themselves big 6-figure cheques every now and then or giving inflated contracts to companies owned by family members etc. Of course everything they do could be above the board, which is the point of contention, we simply don't know. Blizzard doesn't even know, although I suspect they suspect the former possibility. Ultimately we can theorise and legalcraft as much as we want, we aren't going to know anything until this is settled in court. That is true for any non-profit entity. Would you accuse the Red Cross of doing this just because they technically could? I really don't get why people seem to think there's a lot of money being made in the Starleagues and Proleague. Where would all of this supposed money to pay for these supposedly ridiculous salaries and contracts come from?
This is false. Neither the Red Cross nor most other westerns can hide their earnings because they are public record by law. You can go ahead and look up their finical statements on the web or get it straight from them for a small handling fee.
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While thats true that is not the default modus operandi for all NFP organisations.. The only times where you have to make transparent your account is when it is demanded by the government, with good reasons.. If they wish to do so outside of that is their own will to provide more transparency but it is not a must.. I am aware that organisations like Red Cross functions a little differently.. But Red Cross is not the only NFP organisation there is, nor is its operational model the one and only.
And those who speculate that Kespa is paying itself fat six-figure income.. You havnt taken the time to read or answer LegendaryZ's question: where do you think those six-figures salary come from? VoDs, streams as well as live seatings are all free.. Organising and operating fee over a year is obviously not cheap.. Where do you think those 6-figure salary come from, i would really like to hear about it as well.
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Well, being in "public record" means it's available for everyone to see for whatever reason, that's how NPF is supposed to hold itself responsible in the public eye for receiving that tax exempt status. Good reason is needed for the government to audit private businesses, not nonprofits.
But again, I don't know if SK has different laws. I find it interesting Kespa can even be granted a NPF status to begin with for how it operates to be honest.
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Non-profits typically get tax breaks, which is the reason for why their finances are part of the public record, regardless of whether or not they ask for government handouts. (Let's gloss over the part where a tax break is technically a government handout. I doubt KESPA pays much tax.)
And as I understand it, you can start a non-profit where you re-invest profits into your organisation, while paying yourself a salary. The sticking point is that you don't own the organisation's profits and assets - when you retire, you can't cash out. (There's obviously a lot more regulation governing non-profits, but that's the key clause.)
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On October 29 2010 08:31 DiamondTear wrote:
OGN made a contract to have a starleague with Gretech, right? They managed to do that while still having starleague proftable. Why couldn't MBC and KeSPA take a page out of their book?
Yes, but CJ has partial ownership of OGN and Gretech so negotiations probably weren't too hard. 
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ALLEYCAT BLUES50601 Posts
On October 29 2010 07:35 Mintastic wrote:Show nested quote +On October 29 2010 07:11 Waxangel wrote:On October 29 2010 06:26 Redmark wrote:On October 29 2010 06:22 Waxangel wrote:
Accounting is a complicated and possibly shady business, for corporations and non-profits alike. Does this mean that, as I suspect, there's no point in TL users speculating as to which side is in the right without real knowledge? As has always been the case. I suppose that means that people should stop being spoon fed all this propaganda from these large corporations. But where shall I place all my fanboyism spirit then?
put it in the players...not their sponsors.
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and yes u can see financial data, but you cant audit the American Red Cross if you wanted to.
Auditing is a very intrusive process for a company, and there's pretty much always going to be some sort of excess spending, whether it's choosing a nicer hotel for that company trip, or choosing to eat at a slightly nicer restaurant for 'promotional' purposes or something. Further, no company wants all their investment strategies and financials to be viewed by a company that very well could be a competitor or a company that you have no idea if your information will be kept confidential. I realise Kespa is meant to be non-profit, but they still have to make money to keep alive.
Secondly, just putting it out there, but everyone getting cranky that Kespa may be paying the board too much money, the top salary for the American Red Cross was over 1 million USD in 2008 (according to Forbes)... I'd be tentative to be argue along the lines of salary paying and Kespa.
Thirdly, Kespa makes profit. Yes they need to. Noone wants to operate at-cost, especially for something as intangible and infant as an electronic gaming industy. If anything goes amiss for the year, and Kespa doesnt have any contingency options Kespa crumbles, and then esports in korea suffers a huge blow. And when Kespa is a operating in the billions of wons, it's a fairly big operation they're running, all the facilities, pro-gaming teams, advertising, they're not small costs, and they're not running costs you can easily cut and remove. Furthermore, any cost-cutting that they would try to do, would have a detrimental impact on the e-sports scene which goes against the purported goal of Kespa.
I think it's more viable as well for kespa to say how much they really need to reinvest and develop the market, because they are in the market, and whilst it is biased, it'd probably be more biased for gretech/blizzard viewing what they think is the amounted needed for reinvestment.
Im also curious what the contractual relationship between blizzard and gretch is. Im assuming gretech paid money to blizzard for the airing rights and stuff, and if gretech cant actually get anything from this arrangement (in regards to bw), then wouldnt blizzard be liable to gretech as well now? since gretech cant actually get their end of the contract?
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On October 28 2010 23:50 ffreakk wrote:
It seems that many people are taking condition of Blizz "Rights to audit Kespa" lightly..
No matter what kind of organisation you are, even the Government needs a DAMN good reason to audit ur finances at any time.. So giving another firm the rights to audit your finances anytime is as ridiculous a condition as it gets.. I do not know, but i firmly believe that never before has such a condition been agreed upon outside of parent-child companies.
That said, other conditions of Blizz were about as ridiculous too, so there =/
See, mergers / acquisitions. Even companies trying to parter sometimes share the books with each other. This case isn't so different from those.
I'd say being able to legitimately claim that you are insolvent and prove to those that are negotiating with you that you absolutely cannot pay more then XXXXXX would be worth it. Given that corruption is/was rampant in the korean government and higher levels of business it makes sense for blizz to want to be able to audit finances.
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This whole thing wouldnt even be a matter if the korean government have some balls and use the ministry of culture as a defacto regulator of korea e-sport. But no, they have to let a private organization like kespa abuse their monopoly,
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On October 29 2010 05:40 VonLego wrote:Show nested quote +On October 28 2010 22:48 Waxangel wrote:On October 28 2010 22:46 Furycrab wrote:
Well we might expect a response from Gretech/Blizzard. We're obviously not getting the whole picture.
This is just personal opinion: but Kespa really hits my nerves when they insist on calling themselves a "non-profit" organization. We live in a world where even Charity organizers pay themselves salaries... =/ Profit just means any leftover income after operating costs, which INCLUDE salaries. Which means as long as you're investing all extra income in growing your company you're a non-profit organization. Does that not sound like double-speak to everyone else? If I started a company and paid myself a salary, then invested the rest of the profit back into the company, would my company be considered non-profit? Not a chance, but apparently that is what kespa is claiming? Interesting subject, just wish the best for all parties involved in the end. Unfortunately if Kespa is truly as in the red as they wish folks to believe (to no apparently fault of their own) they are a poor business and deserve to go under. Floundering business die, that is how it works.
Seriously... reinvesting their profits into E-Sports, when E-Sports IS your business doesn't make them non-profit whatsoever. Non-profit means you give AWAY your profits to others, who usually have no direct relation to you. E.g. Unicef gives away profits to people in developing countries. So much carefully worded shady language here.
Every company in the world reinvests their profits into their business after paying off salaries, and other expenses.
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EPT
