Competition: fair/unfair

Dick Rees

Dick Rees

Curmudgeonly Scandihoovian
Jan 11, 2011
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St Paul, MN
I'm posting this in the Varsity section as it is a serious professional matter.

I was asked by a local "community access" television outfit to do some sub-contracted audio work for their field shoots. This organization receives the bulk of it's funding from sources other than the clients for whom they provide service: public funding from taxes/grants/etc..

The problem is that they have not learned to say "no" when asked to do jobs which put them in direct competition with folks who run a business providing video production services. Since they have a funding stream apart from the client fees, they can send out a video truck with tech, a director and three cameramen for very little money. The videographers for whom I work at other times of the year have lost business/clients to these people.

What I'm wondering is if this is a matter for the City Attorney or the State Attorney General.

Professional opinions needed.

thanks

DR
 
Re: Competition: fair/unfair

Dick Rees said:
I'm posting this in the Varsity section as it is a serious professional matter.

I was asked by a local "community access" television outfit to do some sub-contracted audio work for their field shoots. This organization receives the bulk of it's funding from sources other than the clients for whom they provide service: public funding from taxes/grants/etc..

The problem is that they have not learned to say "no" when asked to do jobs which put them in direct competition with folks who run a business providing video production services. Since they have a funding stream apart from the client fees, they can send out a video truck with tech, a director and three cameramen for very little money. The videographers for whom I work at other times of the year have lost business/clients to these people.

What I'm wondering is if this is a matter for the City Attorney or the State Attorney General.

Professional opinions needed.

thanks

DR
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And so it goes! The local PBS affiliate here is now offer video and studio services in direct competition to local businesses.
 
Re: Competition: fair/unfair

I will be watching this topic closely.

I live in a town where the University is the largest entity and the largest employer. Like most Universities, they have a sound unit. This unit handles most of the work on campus because they're dirt cheap. They can afford to be, they don't have to be profitable.

Our on-campus clients are those entities who have higher standards than that. Many have been burnt and learned their lesson Thank goodness for them!!!

Unfortunately, they also occasionally travel off-campus and use our tax dollars to compete against us. Not cool.
 
Re: Competition: fair/unfair

An issue for the IRS. Operating a commercial enterprise as a direct function of a charity (rather than for fundraising) could jeopardize their 501(c)(3) status.
 
Re: Competition: fair/unfair

Tim McCulloch said:
An issue for the IRS. Operating a commercial enterprise as a direct function of a charity (rather than for fundraising) could jeopardize their 501(c)(3) status.
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Agreed. In general, recognition as a tax-exempt non-profit organization within a state only come after federal recognition by the IRS. (Form 1024 - Application for Letter of Tax Exempt Recognition)
 
Re: Competition: fair/unfair

Could be worse: The city and county I operate in use my tax dollars to directly compete with me. Nothing I can to about that.

Tim Mc has the answer. I've seen a couple of churches dip their toes into the pool once or twice before they were reminded of their tax status. Once reminded they go back to directing their energies toward their stated missions.
 
Re: Competition: fair/unfair

Don't worry, since the sequester the government has had to cut back funding so severely they will surely drop all but mission critical government activity.

======

Seriously they may innocently have no idea what they are doing, try talking with them person to person. If that doesn't work, vote them out of office, unless you are outnumbered.

JR

PS: sorry I have nothing really constructive.
 
Re: Competition: fair/unfair

Dave Rickard said:
<snip>Unfortunately, they also occasionally travel off-campus and use our tax dollars to compete against us. Not cool.
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Then again, the tax-paying client that gets a cheaper service is getting a better return on their tax dollars, so it works both ways.
 
Re: Competition: fair/unfair

John Roberts said:
Seriously they may innocently have no idea what they are doing, try talking with them person to person.
JR
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That's where it lies right now. They are without a clue....or have been up 'til now. In the OP, I made allowance for that when I put the blame equally on the people who ask them to do this to save money. The askers are not at fault in that it's no crime to save a few bucks, the company is similarly blameless in that they are simply responding to a request for services, not actively seeking out the business. This is what I was talking about when I said that the difficulty comes in knowing when to say "no".

They do not, at this point, realize that they've likely violated the law as well as what I would term professional ethics. They will be informed of the possible 501C3 conflict (Thanks, Tim). If that doesn't get through to them, the information will be passed on to the appropriate authority.
 
Re: Competition: fair/unfair

Per Søvik said:
Then again, the tax-paying client that gets a cheaper service is getting a better return on their tax dollars, so it works both ways.
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Per....

You're not often wrong on this forum, but that's just WRONG.

How would you feel (or Helge B or Kristian J) if NRK started jobbing at half the going rate for legitimate companies?
 
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Re: Competition: fair/unfair

Dick Rees said:
Per....

You're not often wrong on this forum, but that's just WRONG.

How would you feel (or Helge B or Kristian J) if NRK started jobbing at half the going rate for legitimate companies?
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I'm sure I would feel different than Helge and Kristian, allthough Helge is active in a semi-charity (I think) program that provides certain types of venues with sound equipment, thus "undermining" those who would earn a profit supplying same venues. While I would think it would be somewhat wrong of NRK to go into competition in a field that was outside of their regular area of service, using their already paid for resources to generate profit that would indirectly benefit the taxpayers and licence payers would not in my mind be such a bad idea. Politicians in the US and EU seems to think that free market is such a good idea that one needs to regulate that freedom by restricting those who have gained an "advantage" in that "free" market, wether it is breaking up Bell, insisting that a purchaser can't give preferential treatment to local business, or deciding that lowest bidder always wins even if what the lowest bidder is providing is not the equipment you really want.
One thing is Live Nation putting out tender for sound for a concert, another thing completely is a charity or a school putting on a show. When young, local artists no longer gets to perform because the cost of performing prevents them from performing, culture suffers.
When someone is pocketing the profits, by all means let them pay for what it costs to rent a "real" company.
 
Dick Rees said:
Per....

You're not often wrong on this forum, but that's just WRONG.

How would you feel (or Helge B or Kristian J) if NRK started jobbing at half the going rate for legitimate companies?
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Per,

A parallel to my situation is if the Norwegian Govt. started a sound company for govt. events. Makes sense for those events, but they don't actually have to make a profit because their funding is already provided. They can afford to work for "free".

Their insurance, their vehicles, their fuel, their rigs, their buildings, their accountants, their attorneys, their attorneys, are all provided by the govt.

Consider how cheaply you could provide in that non-realistic situation!

Later, they start taking non-govt. shows and charge half the going rate because they can afford to. And they "make money" doing it. They will undoubtedly cost you clients, and lower the rate that promoters expect to pay. It's a serious market changing situation.

It could get really bad if you angered the wrong people and they decided to actually target your business and intentionally went after your particular clients. Would you, and could you, instantly cut your rates in half to keep them? How long could you afford to do that? (pretty extreme example, but it could happen)

Does that make more sense?
 
Re: Competition: fair/unfair

Dave Rickard said:
<snip>Does that make more sense?
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In a semi-socialist society it does. ;)~;-)~:wink:

Where do you draw the line? Should police stay out of the malls because police presence potentially hurt the security-firms, should public healt services close because they hurt the profits of private health business? Public roadworks, public roads? Non-profit radio and TV?
Of course it all comes down to good management of resources, and we all know that public spending isn't allways a good way to achieve that :(~:-(~:sad:
 
Re: Competition: fair/unfair

The US is struggling with being semi-socialist, which to some seems like being semi-pregnant, but we have flirted with modest social programs for decades. Where to draw the line, and how to pay for moving the line are IMO significant questions.

JR
 
Re: Competition: fair/unfair

John Roberts said:
The US is struggling with being semi-socialist, which to some seems like being semi-pregnant, but we have flirted with modest social programs for decades. Where to draw the line, and how to pay for moving the line are IMO significant questions.

JR
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Well, I am all in favor of socialism. I like public libraries, fire departments. DOT's seem important to me. I like big government. I like having oversight that makes for safe work places.
I like having government regulations, such as forcing employers to carry insurance, both for their employees, and their customers (liability).

I like the idea of socialized sound systems. That everybody in the community owns, and everybody benefits from.

So if I am a socialist, why did Per's comment not ring true to me? Why did I instinctively side with Dick?

First I went to the people running it. So, if they have competent people, who are being fairly paid, I have no problem with that.
I do run into the exact opposite in the cases of colleges. But I don't have enough information in the OPs case to determine how I feel about it.
I know I like Dick, and based on how he comes across, I think he would do a competent job. But that is not enough. This is sort of nepotism. I am rooting for him just because I like him, and know him.

It took more thinking on a bike ride to figure out what is bothering me about it. And I came back to my pet peeve about our society.
This is privatization of the gains, and socializing the losses.

So Dick is getting screwed about three ways.
First off, if it were a social system (sound/video system, and political system), then Dick would have equal access to it.
As would everybody in the community. This does not seem to be the case.

Second, Dick is paying for this system, (as we all are) that is in competition with him.

Third, and most to the point, this system is being operated tax free. So their overhead is lower to start with. This is the biggest triple wammy. That Dick is paying taxes, (probably federal, local, and property), and they are not. So, on this note I would suggest following JR's suggestion and talking to the NPR people, politely and with forethought.
And if they don't respond in a positive manner, then the DA needs to be alerted, and probably the IRS.

Regards, Jack
 
Re: Competition: fair/unfair

John Chiara said:
And so it goes! The local PBS affiliate here is now offer video and studio services in direct competition to local businesses.
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This is worse than the OP. A podunk cable access channel is to my mind not supposed to be as knowledgeable about how this works, and why their tax free status is not to interfere with private companies, as PBS. Action needs to be taken. Same as above, in person, then local and federal intervention.

I remember reading on this forum about production houses that now have to compete with casino's (off site) for production.
If these are Indian casino's, are they held to federal regulations?
Or are they like a sovereign nation?

My mom used to be a lawyer, and on or near Indian reservations animal control was nearly impossible.
There were different regulations for Indian dogs, and the rest of the dogs. And impossible to tell from looking at them which was which.

Regards, Jack
 
Re: Competition: fair/unfair

Jack Arnott said:
My mom used to be a lawyer, and on or near Indian reservations animal control was nearly impossible.
There were different regulations for Indian dogs, and the rest of the dogs. And impossible to tell from looking at them which was which.

Regards, Jack
Click to expand...

So Sioux me.......
 
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