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Issue Date: Vol. 49, No.6, June 2009, Posted On: 6/26/2009


As Key Vote Nears, IALEI-IAAPA Merger Debate Heats Up


by Staff Reporter
International Association of Amusement Parks and Attractions, International Association for the Leisure and Entertainment Industry

HUMMELSTOWN, PA -- The board of directors of the International Association of Amusement Parks and Attractions is expected to vote today on the question of whether or not to merge that organization with the International Association for the Leisure and Entertainment Industry. Assuming the IAAPA board approves the proposal, IALEI's board is scheduled to cast its own vote June 30.

The already vigorous debate over the merger question has heated up considerably in recent days and weeks. IALEI leaders, past-presidents (and/or past-chairmen; the title has evolved over the years) and critics have made arguments for and against the merger. They have traded charges of improper conduct. In some cases, they have openly blasted each other's motives and honesty in highly personal terms.

By VENDING TIMES' count, from May 25 to June 25 all these parties exchanged a furious round of public emails, announcements and press releases totaling more than 15,000 words.

Among the most prominent volleys: 10 IALEI past-presidents launched a 2,100-word broadside on June 15. Signatories to the past-presidents' letter were Joey Herd, Phil DeAngelo, Ken Vondriska, George McAuliffe, George Smith, Larry Davis, Ed Pearson, Gene Hinkle, Harold Skripsky and Jack Cohen.

The past-presidents responded to charges leveled publicly by past-president Frank Seninsky and former board member Bud Umbach. Seninsky and Umbach have asserted for many weeks that IALEI's executive committee violated the association's bylaws in order to ram through a merger that -- according to these two critics -- is not in members' best interest and does not represent the will of the majority. Read the Full Letter here.



June 15, 2009

To Whom It May Concern,

Over the past two years IALEI (International Association of the Leisure and Entertainment Industries) and its board of directors have been studying options about the very existence and direction of the organization. The decisions, which will lead to a board of directors' vote June 30, 2009, and a special membership vote to be completed by August 28, involve the possible merger with IAAPA (International Association of Amusement Parks and Attractions). Members will have an evaluation period between July 15, 2009 and the August 28 vote to consider the proposed merger. Many of the statements made public by a small group of former Board Members who disagree with the majority vote of the board are by our reading rife with inaccuracies and unsubstantiated opinion. The process of analyzing a merger is painful, but the outcome either way is hopefully to the betterment of the members of the IALEI. The IALEI board, its staff and advisors are working through difficult times. We find certain attacks on them from this small group of current and former Board Members to be inappropriate. Board members are bound by confidentiality of sensitive matters when they accept the board election. The Past Presidents are not all of one mind concerning the merits of this potential merger, but we believe the current IALEI leadership is acting in the best interests of the association as they see it. In short, the process needs to be fair and balanced, not a public lynching of the rule of the many by the wishes of the few.

The original association IAFEC (or IFECA as it was originally known) was founded in 1993. Bailey Beeken (Bellwether Expositions) who owned and ran the Fun Expo show (first located independently in Atlanta 1992), teamed with Joey Herd of American Adventure in Marietta Georgia and later of Riverchase Golf N Games to initiate the organization. The purpose of the organization was to act as an independent and unbiased educational arm for the emerging and somewhat orphaned Family Entertainment Center community and began its educational forum in conjunction with the Fun Expo show. Joey and American Adventures were the exemplar of innovative Water Park and FEC operations at that time. Critical to the formation of the association were other industry leaders who served on the association board and became Presidents during the "early" days, among them such well-known industry operators as Harold Skripsky (Enchanted Castle), George McAuliffe (Time Out Centers) and Ed Pearson (Seattle Funplex). The judgment of the association founders was that fostering best practices in FEC operations would benefit this fast growing community. Essential to the foundation was the notion that it was an "Operator" driven organization. While manufacturers and suppliers were welcome it was thought that a truly operator formed and run association would limit any potential bias to one group of products, suppliers and most especially "consultants". Over the years the non-operator members have performed valuable service and financial commitment to the industry and IALEI. The distinction was made because supplier members have different interests and motivations with respect to an association. A critical consideration was the association's mission: Education. To be an educational leader requires credibility. To develop credibility even the appearance of conflict of interest had to be avoided.

The voting rights established then and in effect today are biased to the operator. For good or ill this is the basis of critical by-law rules. IALEI has always tried to be an independent and non- biased forum for FEC and related industry best practices. The hope was to keep the association in the hands of motivated "volunteers" and assisted by paid staff to disseminate in unbiased forums the products and services that would safely grow the FEC (family entertainment centers) industry.

The association grew every year until a stabilized base of 600-800 members was maintained. The benefits of membership grew to include a valuable insurance program, various education benefits and industry surveys, and the addition of other association allies such as the Skate Park, Paint Ball, Go Kart and Mini Golf associations. In the early 2000's Reed Exposition, which had bought the Fun Expo trade show from Bellwether, made a decision that the show was not large enough to generate sufficient profit. The IALEI board had an opportunity to buy the trade-show. The purchase was a stretch for the young IALEI association but with the unstinting push by Harold Skripsky and Phil DeAngelo (who backed the endeavor by loaning IALEI the money!) and others, IALEI approached the AMOA (American Music and Operators Association) and the AAMA (American Amusement Manufacturers Association) to buy the trade show.This even included the move of the show from its fall time slot and typical co-location with the AMOA show to the 2009 premier of a co-location with the ASI (AAMA) show.

Most of the moves related to the trade show mimicked the changes, primarily economic, that were affecting the amusement/entertainment industries. In the recent past, related industries have seen a reduction of membership in the manufacturing, distribution, supplier and operating communities. Mergers, consolidation and public tastes, particularly those related to at home entertainment, have made fundamental changes to the income of all associations and shows.

The largest amusement related trade show is the November IAAPA show. In the past 10-15 years the show has become the host of FEC, Water Park, Coin-Op and other industry's largest gatherings. IAAPA is known for its affiliation with amusement parks, but the organization has been focused on FECs for some time, as evidenced by a vibrant FEC committee. Some have insinuated that IAAPA will ignore the FEC community. This is absurd. IAAPA is clearly committed to the FEC industry, with FEC's constituting its fastest growing segment. At FEC related seminars at IAAPA, the attendance often exceeds room capacity, and is in fact much larger than the educational seminars at the Fun Expo, AAMA, and AMOA, Foundations, U Profit or any similarly formatted forums. In summary IAAPA has made many changes that may make it a good merger partner if IALEI members are inclined. IAAPA also has substantial financial reserves, the ability to market, and to carry through on FEC initiatives in a way that IALEI may be hard pressed to accomplish in its current tenuous financial condition.

The Fun Expo trade show has seen declining income in recent years. Under discussion for many years was a move to the spring because a large percentage of suppliers were opting for one fall show (more often the IAAPA). Fun Expo show ownership then decided to move Fun Expo to the spring, to co-locate with the ASI show, and potentially other trade shows (NAMA, Pizza Expo, etc) in the same time slot, would generate more exhibitors and attendees. Instead, the move to the spring in 2009 so soon after a 2008 Fun Expo stretched the IALEI resources even thinner.

Beyond Fun Expo the board and merger committee discussions focused on many very difficult subjects. Not often discussed is the need for clear and understandable rules and regulations to operate a Non Profit organization. As mentioned previously, the desire of all the IALEI founders and the majority of every IALEI board were and are to practice ethical stewardship. This includes rules to govern conflict of interest. This is extremely difficult in a volunteer driven association. The PRIMARY and oft stated goal of IALEI was and is to provide factual, useful, unbiased education to its existing members and to those considering a life in the FEC community. In recent years the effort to keep free of paid consultants has been a struggle. Too often the services delivered by IALEI might be considered improperly biased if the educators conducting seminars or selling products benefit from a close proximity to the association banner, or those who may gain immediate benefit from an attendee's use of one supplier's (or Manufacturer's) services over another. The IALEI volunteer board must also wrestle with the very make up of its volunteers. How many board and committee members can afford to desert their businesses for long time periods to deal with the questions of the association? How many members can sustain the out of pocket expenses that association involvement often demands? Many times the board member will say that "I can't afford the time, money and grief that accompany my board seat" however well intentioned a volunteer may be. This becomes much more difficult in trying economic times. It may also become impossible when board members, especially Executive Committee members, are publicly attacked, by vocal minorities, for advocating positions, which they believe to be in the best interests of the membership. This is particularly troubling when those positions are approved by a majority of the board in compliance with the organization bylaws.

For more than two years the board has struggled with an internal conflict of interest that included a board member threatening legal issue against each seated board member and the association itself. Imagine being a volunteer and being pilloried for making the best informed stand but sued by a loud, well funded opponent who seeks to have his own way because the conflict of interest test may well indicate culpability.

The IALEI board, particularly under its last two Chair people, has had to deal with many unpleasant and difficult choices. Chief among the list are declining financial resources, lessened show attendance, a measure of internal strife and most especially a decision as to how to best serve the IALEI community.

The board and Chairpersons of the last two years agreed to investigate 3 possible but plausible options to maintain its ongoing mission.

1. Continue with the current program and hope to streamline in some parts but to maintain its trade show and educational forums in as similar a fashion as had been in place for 15 years.

2. Seek a merger with AAMA, a sister owner in the Fun Expo show and similarly in need of a direction change. This might well provide a catalyst to other industry association mergers and certain economies. The merger might also be very close to the spirit of independence sought by IALEI for many years.

3. A merger with IAAPA. This option offers a strong financial partner with a long and celebrated history, a large and well attended trade show and sophisticated educational resources and opportunities. The FEC component and committee of IAAPA is focused, operator driven, professional, and may well be the spear point of the IAAPA membership drive and recruitment.

In committee investigations stretching for months, a simple majority of the IALEI board voted to investigate the merger with IAAPA as its primary go forward strategy. This vote took place at the most recent ASI/Fun Expo show

Under the bylaws as written, the board also sought to find the best method of allowing the membership to vote on the critically important questions of whether to merge with IAAPA or not. To that effect it asked its members to allow paper ballot voting, to avoid holding a special general meeting or postponing until the next Fun Expo, scheduled for spring 2010. By an overwhelming majority of the voting membership the members approved the rules change that will allow paper ballots to be sent to members and tabulated when the ballots are returned.

The current board and especially the executive committee are bound by the rules of the association. As duly elected, the board must be presumed to be acting in the interests of the membership. In a democracy the majority will becomes law. Protest over questions as large as merger and direction must be vigorously debated but attacks by the few should not be construed as representing the will of the "entire voting membership", "the Board of Directors", the Executive Committee", "Past Presidents", or indeed the will of anyone, either for or against a merger.

The membership of IALEI and its elected officials will need to debate and discuss the pros and cons of the merger. This should be completed within the membership body. The board of directors vote which takes place June 30 is the next critical juncture of this process. All members are welcome to attend the meeting and we hope you can. The elected officials of IALEI need to communicate the reasons for any given action. Simply by having some declare publicly to all who will listen that the rules are "misinterpreted", "hijacked", or that "our survey shows" constitute the aspirations of the few to seek their will over the consideration of the many. The forum for any changes, regarding the reasons why IALEI should or should not merge with IAAPA, or take a different course, should be discussed by members within the available internal methods of deliberation.


Signed,

Joey Herd, Phil DeAngelo, Ken Vondriska

George McAuliffe, George Smith, Larry Davis

Ed Pearson, Gene Hinkle, Harold Skripsky, Jack Cohen

Past Presidents of IALEI


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