The Gathering 2014 – Not repeating the financial failure of the 2009

[MacMillan of Rathdown]

Why be surprised? After all, the record of public servants using public money, when it came to estimating the cost of the New Scots Parliament building and what it actually cost hardly fills one with confidence. Now perhaps we could discuss the projected and actual cost of the new tram system in Edin-----------------------------? OK, perhaps not!

My point exactly!

[cessna152towser]

Can someone explain why "Stirling 2014" is being given £3 million of tax payer's money?

It is important to distinguish a Homecoming Year from a Gathering of Clans which takes place during that year.
My understanding of the news item is that the £3 million is to be made available for the whole of Homecoming Scotland 2014, a programme of events designed to attract visitors from the diaspora throughout the year, of which Stirling 2014 will be just one part.
When we had Homecoming Scotland 2009 there were a large number of special events held country wide, opening at Robert Burns' birthday in late January, throughout the year until the grand finale on St. Andrews Day, 30th November. The Edinburgh Gathering in July 2009 was just one event within Homecoming Scotland 2009. Throughout 2009, other towns held events at different times, for example Dumfries held its major events in January and November at the start and finish of the Year of the Homecoming, and also held lesser events in June and August. Our major Homecoming events here in the Scottish Borders took place in September and there was a Highland Homecoming based around Inverness during October.
I would expect much the same will happen in 2014.

[mookien]

Can someone explain why "Stirling 2014" is being given £3 million of tax payer's money? Semple's event in 2009 (including a £300k loss) cost barely a million to produce. Surely the cost of doing business in Scotland can't be projected to increase by 300% between 2009 -2014?

Maybe, and hopefully, some of it will be spent on a surety/performance bond to help any subcontractors, who might again be left holding the bag.

[mookien]

This was discussed in some detail ("Collapse of Lord Semples Gathering Company" -- 14 posts) back in 2010 when it was first announced that Semple's company had lost money on the event. The thread is now locked, but can be accessed by clicking on "search" in the tool bar, and entering "Lord Semple" to find the thread. There was further discussion throughout the year, and, again, using the search feature in the tool bar you should be able to find the relevant posts.

Thank you for pointing me to 02/03/2010 thread. It was one I don't recall reading, though I did read at least some of the others.

I am convinced part of the "confusion" is that we are addressing two different subjects - one broad - "The Gathering", and the other narrow - "Posting a Surety Bond". I am, of course, interested in the latter, and it has hardly been discussed at all. For example, in the aforementioned thread only post #6 by ForrestorModern addresses the subject, though it is stated clearly and succinctly. It is a short comment, so I reproduce it below.

"They probably should have had the private organizing company put up a bond in a sizable amount to cover just these unforeseen and uncovered expenses. At least then the organizers would be paying the insurance comapny bond for the excess costs, instead of the little guys taking the hit---the people who should have had most to gain as a group from hosting the gathering. Too bad the financials were not worked out better in advance."

That, too, was my suggestion in post #29 of the 02/26/2011 thread, "Poor Communication Plagued Gathering", to wit ...

"My ignorant/naive question is "Why didn't Scottish authorities require the promoters/developers to post insurance bonds against possible financial distress, so that local contractors could recover at least some of their costs in the event of financial disaster?"

I realize this question in posed with the benefit of 20:20 hindsight, but certainly experienced organizers would have considered this option. Or, am I wrong?"

I was hoping, and continue to hope, that someone reading this blog would be both knowledgeable and familiar enough with the subject material to enlighten us as to why the requirements for producing the Gathering did not include a stipulation for a surety bond, and why the same can't/shouldn't apply to any upcoming similar events.

I patiently wait edification.

[mookien]

In the instance of the 2009 event the rights were held by a private company, in much the same way the rights to a concert in a park are held by the promoter, not the municipality that rents out the park.

In the motion picture and television industry it is possible to get what's called a completion guarantee bond, which assures the completion of the film/show if the producer exceeds the projected budget. When this happens the completion bond company becomes the owner of the film-- and when it is completed they recover their loss from the money generated by the marketing of the picture.

Unfortunately, it is virtually impossible to insure an event against loss for two reasons: (1) it can be weeks, or months, after the event before the true financial picture is known; (2) in the event of a loss, there is nothing the bond holder can attach to recoup his loss.

This raises the question of who repays the "loan"? Generally the "repayment" is achieved by the bond issuer selling off the assets of the company that has defaulted. Where there are no tangible assets it is virtually impossible to get a bond.

Probably because you can't insure against going broke.

Actually, a private company can be insured against "going broke" in the performance of a contractual obligation, and it happens all the time, at least in the U.S.

I spoke with a surety/performance bond expert at a large insurance company, which shall remain nameless for their protection against my inadvertent misrepresentation. Thus, take the following with a grain of salt, and please correct me, if/where necessary.

First, surety bonds are not insurance. They are more like a short-term loan. They are most often written for liability, but they are also written to assure that a contractor's subcontractors will be paid. Those are called "payment" bonds and are the subject with which we are dealing.

The bond is acquired via contract at the time the municipality (Stirling) grants the rights to a private company (Semple). The underwriters for the insurance company examine Semple's financial strength with a fine-toothed comb. Based on their risk analysis they set the fees for the "loan", ie bond.

The bond is placed in escrow. If everything goes well and all the subcontractors are paid, the bond amount plus fees (including short-term interest, I assume) are paid to the insurance company, and they make a profit. Everybody's happy.

If Semple declares bankruptcy, then a lot of the important details are determined by the contract, and often the courts, but in general the subcontractors will, at least in part, be paid from the bond. The important point is that they won't simply be left holding the bag. The insurance company incurs a loss, has a Dutch-uncle talk with its underwriters, and puts the loss in the debit column of its financial sheets under "Accounts Uncollectible".

Now, after all this trouble, some expert will write in and tell us all how wrong the above really is. If so, I will welcome it and take it as a blessing in disguise.

[mookien]

Since we have two discussions going on in this thread; the first information on the upcoming 2014 Gathering., and the second, a discussion about the financial loss of the 2009 Gathering and what can be done not to repeat the situation for the 2014 Gathering. Let’s separate the threads:

The Gathering 2014 – Upcoming Event News

The Gathering 2014 – Not repeating the financial failure of the 2009

Mael,

Excellent idea!, ... if it can be done.

John

[Mael Coluim]

Mael,

Excellent idea!, ... if it can be done.

John

Done!

Click here to go the The Gathering 2014 - Upcoming Event News

[mookien]

Done!

Click here to go the The Gathering 2014 - Upcoming Event News

Mael: That was fast. Thank you.

John

[Sir William]

You could place the population of the whole of Scotland(about 5.5 million) into greater London(nearly 8 million) and still have an awful lot of room to spare.

As I understand it, the intention is to spread the visitors around the surrounding areas including Edinburgh. Perhaps they may be thinking of also using the facilities of Stirling University as it will probably be empty at that time of year? I know that the road system around Stirling towards the central belt is now up to date and is very good and I understand that the rail system is good too. I do wonder how well the communication system will stand up to this event though. I will do my part in helping by staying away.

Jock,

I've absolutely nothing against Stirling as the venue but my concern (and something that I hope is of concern to the organizers) is whether Stirling has the logistical infrastructure to support a Gathering? Edinburgh was stretched to the limit to provide lodging, and restaurants and pubs were standing room only with a line out the door much of the time. I met several attendees who were staying in Stirling and heard there were others spread all the way to Glasgow.

That said, I'm planning to attend. I had a grand time in 2009 and since the Gathering is only about 3 days long, its a good excuse to explore more of Scotland to justify the time and expense getting there. Since I'll be exploring the Borders in 2013, I hope to see some of the islands in 2014.

Hopefully, the organizers will make the 2014 Gathering a truly national event and do more this time around to involve the Scottish people and economy.

[AcuteEnigma]

Jeez! How mean! Lord Sempill worked for years to get that first event off the ground. Then the Great Recession happened and economies all over the western world were in the depths of despair by the time of the Gathering 2009. Thousands of people had a wonderful time. Sure some things went wrong, but that is always the case with big events and especially on the first run.

As for the workers who did not get paid - shame on the City of Edinburgh which took in all the profits.

As for calling him nasty names, please do that in the privacy of your own home?

Julie

"After the meeting, Lord Sempill repeated his desire to help organise a second Gathering in an email to Mr Wood: "I wish to take this opportunity to reaffirm my interest in helping you to attract the international clan community and to provide whatever assistance you may need in putting the event together.""

He added: "I would be looking for a consultancy fee to provide my services."

Gotta admire the stones on that guy

So do ya'll refer to this guy as a scam artist or confidence trickster? Or is he just a 'colourful character' that gets a pass because he's a peer?