Riverbend is $3.5 million business

Riverbend is $3.5 million business

June 12th, 2011 in Riverbend2011

Chip Baker, executive director of Friends of the Festival, announces the expansion of no-smoking areas at Riverbend.

Photo by Jenna Walker /Times Free Press.

Document: Polygraph Results for Carroll Platt on Riverbend Charges

Document: 2010 Financial Report for Friends of the Festival

Chattanooga's biggest party has grown over the past three decades into a $3.5 million, year-round business.

For its size, Chattanooga boasts one of the biggest and most enduring downtown music festivals in the country. During the next week, the Riverbend Festival will be among the city's top 10 employers, although most of the more than 1,500 workers who staff the festival and its related concessions are volunteers.

Admission pins bought by the thousands who flock to Chattanooga's downtown waterfront pay less than half the bill for the annual nine-day show.

Friends of the Festival, the nonprofit group that operates Riverbend, gets more than $1 million from corporate sponsors every year and generates nearly $600,000 more annually from concessions.

Behind the fun of Riverbend is Chip Baker, the Friends of the Festival executive director who was paid $199,924 last year to keep the festival on pace and within budget.

Under his command for the past 13 years, Riverbend has shored up its finances, adjusted to a new riverfront site and weathered a recession that crippled other similar festivals.

But one of Riverbend's bigger contractors claims Baker has sometimes exercised too much control for his own benefit.

"It's a very difficult business, especially in the past few years," said Baker, who also serves on the Hamilton County school board.

In Birmingham, Ala., the 20-year-old City Stages arts and music festival shut down last year after losing nearly $500,000 in its final year in 2009.

"The recession took a real toll on a lot of festivals by cutting corporate sponsorship, limiting or ending local government financial support and reducing paid attendance or concessions," said Steven Schmader, president of the International Festivals & Events Association, the primary trade group for major events around the globe.

Baker's Career change

Baker came to Riverbend in 1999 as a somewhat unlikely director for one of America's biggest music festivals.

"I'm not a music person," said Baker, who came to Chattanooga from Dallas in 1982 to help run T.C. Thompson's Children's Hospital at Erlanger.

Baker's passion was more for the sky than the stage, although his eyesight discouraged him from joining the Air Force if he couldn't be a pilot.

But in his role at the children's hospital and with his aviation interest, Baker quickly embraced one of the hospital's top fundraising ventures - the biannual air shows at Chattanooga's airport. He played key roles in air shows in 1994, 1996 and 1998 and learned how to put together a major event for tens of thousands of people.

"I loved planes, I loved the hospital, and the air show was a great chance to serve both interests," he said.

While looking around for a new job in the hospital industry, Baker was approached by Hamilton County Emergency Management Director Bill Tittle, who had worked at both the air shows and Riverbend. He wanted to gauge Baker's interest in heading the group that puts on the Riverbend Festival.

Baker left the hospital on June 8; he started his new job for Friends of the Festival on June 9; his daughter was born June 10, and the 1999 Riverbend Festival began June 11.

"It was a real time of transition," Baker recalled.

Riverbend Rebound

When Baker succeeded Richard Brewer as director of Friends of the Festival in 1999, the festival was more than $400,000 in debt.

To make up the shortfall, the festival got some needed help from the Benwood Foundation and used discounted pin sales for the next year's festival to pay off remaining bills from the previous year's festival.

"The 'early bird' pin sales campaign came about so you could buy pins early for less and we could use the money coming in for next year's festival to pay for this year's debts," said Donica Branum, finance director for Friends of the Festival.

Even then, Branum recalls having to pay off bills on a gradual schedule because funds often were too short to pay all of the expenses after the festival ended.

"Fortunately, everyone worked with us, but over time it got harder and harder," she recalled.

Baker developed and emphasized staying on budget and brought in better computers and software to track expenses and revenues.

Without much cash, Riverbend often uses what it has to secure equipment and services, trading pins and passes for what it needs.

"My dad was a doctor and sometimes when people couldn't pay him cash, they gave him a chicken," Baker recalls. "Well, our chickens are tickets."

Friends of the Festival moved out of its downtown office in the former Sears Building on Broad Street and moved into a smaller office in the former Civic Forum to save nearly $25,000 a year in lease expenses.

"We did everything we could to cut expenses and everything we could to raise revenues," Baker said.

No money, no mission

From his days in the nonprofit hospital industry, Baker earned early the credo, "no money, no mission."

According to the IRS filing for fiscal 2010 by Friends of the Festival, Riverbend revenues topped its expenses last year by $298,785, helping to grow the festival's assets to nearly $3.8 million.

To broaden its support, Riverbend has tapped a wide swath of community interest with its diverse stages and musical styles along with everything from singing contests for children to juggling acts. Riverbend added its "sweet tea" night on Tuesday with Christian music acts and no alcohol, just one day after what is the city's biggest beer and blues march along M.L. King Boulevard during the Bessie Smith Strut.

While BlueCross annually sponsors a Riverbend Run, until this year Riverbend also enjoyed the sponsorship and distribution of cigarettes to adults by tobacco companies. Riverbend gave up that tobacco money - almost $45,000 - this year to make the festival more of a smoke-free environment.

Baker walks the festival site with a book in his back pocket to write ideas for how to improve next year's event. Possible future sponsors are entertained during the festival to see the potential for sponsoring part of next year's concerts, Baker said.

"We're already planning for next year's festival even before this one has begun," he said.

Business-minded sponsors are motivated by sales at Riverbend or brand marketing to thousands of people while they are enjoying a good time. Other major employers in Chattanooga often support the festival just to help sustain a special event for the city and their employees.

"It's just another one of the things that makes Chattanooga special," Baker said.

Riverbend promotes what Community Foundation President Pete Cooper calls "social capital" where people from all walks of life are comfortable being together.

Rising costs, revenues

In 12 years, Riverbend pin sale prices have gone up about 50 percent and haven't increased in the past couple of years.

"But our payments to artists have gone up more than 700 percent," Baker said. "They have seemingly been recession-proof."

Mike Costello, a Chattanooga accountant who has served on the board for several years twice during the 30-year history of the Friends of the Festival, credits Baker and his team for maintaining Riverbend's financial standing by restructuring the festival's finances and boosting sponsorship support.

"This festival didn't always do well," Costello said.

Costello said the current management team for Riverbend "is the most professional management team you are going to find anywhere."

With the Chattanooga Classic golf tournament each fall and the Saturday night Riverfront Nights concerts through the summer in addition to Riverbend, Friends of the Festival took in total revenue of nearly $4.6 million last year.

"At the last board meeting, we all applauded this team because with all that they do for Riverbend and the other events they do, you would think they would need a bigger staff," Costello said, referring to the eight full-time and three part-time employees who work year round for Riverbend.

Video Interference

But not all of those who have worked on the festival in the past decade share Costello's view.

Carroll Platt, a suburban Washington, D.C., contractor who handled video services for Riverbend for nearly a decade, claims he was unfairly cut out of the festival this year because he refused to share his business profits with Baker.

Platt, owner of Performance Video Systems, said Baker talked with him in May 2010 about another local business venture and asked, "What's in it for me?"

Platt says he has worked with government and nonprofit groups on major concerts and shows throughout the country and "never seen that kind of behavior." He said he refused to go along with Baker's appeal and last month filed a police complaint claiming Baker "has been attempting to solicit kickbacks from his production company" for the past three years.

Baker denies ever asking for any personal favors from Platt.

But Platt said Baker wanted in 2008 to become a partner in a new venture to make and market videos about the Riverbend Festival for PBS and for direct sales.

Although Platt says he ended up losing about $100,000 on the venture, he claimed that Baker initially wanted a share of the business in exchange for taping parts of the festival.

The project was endorsed by the mayors of both Chattanooga and Hamilton County as a way to promote Chattanooga and the festival, Platt said.

But according to Platt, Baker directed that unless he was a partner, the venture couldn't use the Riverbend logo, even after literature already had been printed, and couldn't contact Riverbend sponsors about advertising on the videos.

"It ended up being a bad mistake for me," Platt said, although one of the videos was shown on a PBS outlet in Connecticut.

In addition to operating the large video screens around the festival site, Platt's company provided video services used on the Chattanooga Times Free Press website from the children's stage and other Riverbend events last year. In exchange, the newspaper provided Platt with advertising space for a special section of the newspaper last year.

That arrangement ended when Riverbend terminated Platt's contract.

Investigation and denial

Riverbend officials said the contract with Performance Video was not renewed because Platt's company was using Riverbend to make and sell videos of entertainers and festival events and to solicit Riverbend-related advertisements not authorized by the festival.

"About three years ago, we had these other sponsors show up on our screens that were not our sponsors," Baker said. "I expect that I am paying to light and video my stages, not someone else's stages. It's our video, not someone else's video."

Baker categorically denied any wrongdoing and bristled at Platt's assertion that he had asked for any personal share of his profits.

"I have four kids and take pride in what I have done in my community service," he said.

Upon hearing of Platt's complaints, the executive committee of Friends of the Festival agreed in January to hire former FBI agent and Knoxville private detective W. Grey Steed to investigate Platt's allegations.

"Mr. Platt made a lot of allegations, and the best thing the board could do was to get a third party to look at these claims," said Hugh Moore, a Chattanooga attorney and chairman of the 21-member board of the Friends of the Festival.

Moore and Costello said the board has confidence in Baker's management and it is not the role of the board to negotiate or approve every contract for the festival.

Platt initially declined a request by Steed to take a polygraph exam. But last week, he took a lie detector test administered by the Virginia Polygraph Service in Fairfax, Va., to try to prove his claims. Jerry F. Shockley, who administered the polygraph exam, said his professional opinion was that Platt was telling the truth when he said that Baker asked him to make him a partner in his company and that he didn't initiate any programs without the approval of Baker.

Platt has filed complaints against Baker and Riverbend with the Tennessee attorney general and the Chattanooga Police Department, but Baker said authorities have never contacted him about the charges.

Even when Platt subsequently offered to cut his previous $102,000 contract for the Chattanooga festival to only $80,000 this year, Baker refused the offer.

"We had already moved on by that point," he said.

Read the polygraph exam of Carroll Platt and his charges against Riverbend at www.timesfreepress.com