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Is Carnival profitable?

Natalie Briggs Thursday, January 12 2017

click on pic to zoom in

A check on the Internet will reveal a number of documents on the profitability of Carnival, giving the casual observer a sense that Carnival, as an enterprise, earns this country money akin to that of the energy sector and its untapped potential represents billions in revenue.

The well-known Economics of Bacchanal, by Dr Keith Nurse states that from 1997 to 2006, Carnival visitor expenditure tripled from US$10 million to US$30 million or almost TT$200 million. Meanwhile, a paper written by George Luis Morejon says that extra-large mas bands earn, on average, between TT$ 9 million and TT$12 million, with the top five extra-large band earners taking home between $45 and $60 million each year.

To give us an idea of the potential of our own festival, Nurse quotes earnings for TT inspired Carnivals across the world. Caribana in Toronto, he says, earns CDN$200 million, London’s Nottinghill Carnival, ?93 million and New York’s Labour Day Carnival US$300 million.

However, every year, our annual festival seems to be mired in confusion, much of it related to funding. It has become a staple of the months leading up to Carnival, for some interest group or other to claim that it hasn’t received prize money, or the requisite funding to carry out its activities. The ensuing media coverage produces a rash of signed cheques from central government. Winnings are distributed. Suppliers and vendors paid. The festival can go on for another year. Rinse and repeat.

But perhaps the time has come to start asking Carnival bodies like the NCC, the NCBA, Pan Trinbago and TUCO some hard questions about their activities. If Carnival is so profitable, at least in theory, why does the taxpayer continue to subsidise the festival to the tune of hundreds of millions every year? And in the country’s current financial straits, can and should subsidies continue at this level? Many of these bodies are decades old. Is it unfair for the public to ask, with their experience in their respective field, hasn’t the time come for them to start generating more of their funding through their own business activity?

There is a gap between what is said about the profitability of Carnival and the reality. And somebody, be it the government, or the Carnival bodies, needs to close it.

A Joint Select Committee report into the activities of the NCC in 2011 revealed that 95 percent of the body’s funding comes from government subvention, while five percent is income earned from the NCC’s activities. That year the NCC received $124,692,840.

According to the report the allocations for that

year were as follows:

Government Subvention $123,287,840

Other Income $1,405,000

Total $ 124,692,840

Meanwhile, expenditure incurred was broken

down as follows:

Personnel Emoluments $ 3,759,540

Goods and Services $64,577,080

Minor Equipment Purchases $ 1,595,200

Current Transfers and Subsidies $ 54,761,020

Total $ 124,692,840

A further $61,754,140 was subsequently approved for additional work on the stage and the North and Grand Stands.

Perhaps the time has come to start challenging basic assumptions we have been making about Carnival and its profitability. It is clear from the above that if the NCC had to support its operations based on its earnings, Carnival as we know it, could not happen. What does this mean? Is it that audiences are not paying to go to the events? Are not willing to pay the entrance prices? Or are not interested in the events entirely? Alternatively, could the problem lie in the management and administration of the events?

What does this do to assertions that Carnival is inherently profitable?

And while it seems that little work is being done on finding the answers to these questions, more money is being asked from the public to continue.

The current face-off between Pan Trinbago and pan players was only the latest example of this dynamic at work. The pan player complained that they had not been paid their stipend since last year, Pan Trinbago promised to pay, but pan players claim they have been unable to cash cheques. Both sides expect government intervention to settle the issue.

Business Day reached out to Keith Diaz, Pan Trinbago president, to learn more about the issue and to ask why the organisation continues to need government subvention after decades of operation.

His response is instructive. According to Diaz, as the national instrument of the country, pan was entitled to government support.

“The national instrument is accepted worldwide,” said Diaz, “The State has to understand it needs to contribute to the development of the instrument. Any other foreign country would have seen the virtue of this.”

He said the organisation had not been receiving government subvention since the early years of the People’s Partnership government and has been functioning on funds earned from Panorama.

He also said that Pan Trinbago had relatively limited opportunities to earn money on its own, but was working on business plans and had started putting things in place.

However, attempts to probe further into these activities and why Pan Trinbago continues to function unprofitably was met with hostility from Diaz, who threatened to end the interview, if it continued in that vein.

The Pan Trinbago president insisted throughout the interview, that government should remain one of the primary drivers of the instrument’s development

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