Vol. III, No. 5, May 2003
Has IALEI Lost Its Way?
Back in 1992, Joey Herd, Manager of American Adventures in Atlanta, saw the need and had a vision for an organization that would meet the needs of family entertainment centers and similar smaller facilities. So he spearheaded the organization of the International Family Entertainment Center Association (IFECA), since renamed the International Association for the Leisure & Entertainment Industry (IALEI). The original vision was for an association that would represent the interests and needs of operators. Out of fear that somehow suppliers might dominate the association for their own self-interests, the bylaws provided that supplier members can hold only non-voting memberships and limit the number of supplier members' Board seats.
Over the years the association has grown. Along the way, however, it appears to us IALEI has lost its way. We believe the wrong turn was the decision that IALEI become a part owner in the Fun Expo trade show, along with AAMA and AMOA, when the show was purchased from Reed Enterprises in 2000.
At that time, there's no doubt the Board thought this was in the best interest of the association. However, it has not proved to be in the best interest of operator members. There is some question whether the purchase was in compliance with IALEI's bylaws. One of the bylaws' stated objectives is: "Sponsoring a regular convention that includes educational exhibits, seminars and demonstrations to encourage the exchange of ideas and information." Nowhere do the bylaws provide for the association owning a trade show. Sponsoring an educational convention is a long way from owning and operating a trade show.
In order to pay for its share of the Fun Expo, IALEI had to borrow money. The amount and nature of this loan have never been disclosed to members, nor were members ever given the opportunity to vote on such a substantial liability. It's reported that all Board members must take an oath of secrecy concerning the purchase and loan.
Just about the time IALEI purchased Fun Expo, the trade show business took a downturn. Displaying suppliers, as well as trade show attendees, began decreasing the number of shows they attended. Fun Expo, as a smaller show, began feeling the impact as suppliers passed it by, opting to show only at the IAAPA convention in the fall. Because booth rentals are the primary source of revenue for trade shows like Fun Expo, the event became less profitable. This placed a greater financial burden and responsibility on IALEI, and as result, Fun Expo became the primary focus for the association.
In a sense, IALEI has become a slave to Fun Expo. As trade shows are for-profit ventures, ownership has turned IALEI into a quasi-for-profit organization. This has created a conflict of interest with the association's primary purpose of serving its operating members. Operating members don't need a tradeshow when they can see everything and more at the IAAPA show. Most Fun Expo attendees are not even IALEI members. The Fun Expo tradeshow in many respects serves the interest of supplier members and non-member attendees to the detriment of IALEI operating members.
The economic tug of Fun Expo demands IALEI's primary focus, and everything else becomes secondary. Less money and staff attention can be devoted to member benefits like educational programs. Educational programs at Fun Expo now must be considered as revenue generating, or at worst, break-even, as funding is no longer there to subsidize them. This can limit their quality.
Unlike many associations, IALEI does not publish its annual financial statement for members to see. There is even some question as to whether member dues are subsidizing Fun Expo.
Unfortunately, members have little -- if any -- voice in these matters. They don't even get an opportunity to vote for Board members and officers. The President appoints a nominating committee that selects only one candidate for each position, and that slate of candidates is automatically elected. This creates a somewhat incestuous succession for the Board and officers. Many other trade organizations have an open election process with competing candidates and full mail voting by the entire membership.
The Board recently held a strategic planning retreat. Non-Board members were not invited. Nevertheless, it is hoped the Board did examine these conflicts of interest that work against the greater good of operating members. We also hope the Board took that opportunity to institute changes in the organization to better serve its members and to bring the organization back into compliance with founding goals. Time will tell.
