Rose/33″/dt1st/mark2nd

By DANIEL TAUB

Staff Reporter

As millions of groggy Americans turn on their televisions to the 110th Rose Parade on the morning of Jan. 1, they likely will see the same whimsical floral floats, rousing marching bands and trotting horses that have made the event a national tradition.

But there is one unknown: whether the Rose Parade, and the Rose Bowl Game that follows, will make or lose money.

In two of the last three years, the parade and game have been in the red. In 1996, the Pasadena Tournament of Roses Association, which organizes both the parade and the game, lost $119,000. Then in 1997, it lost even more $279,000.

In 1998, the parade and game did turn a profit, earning $283,000 for the Tournament of Roses Association, which splits the pot with the city of Pasadena under an agreement reached two years ago.

For the past three decades, most of the annual events have earned money, with the exception of 1996, 1997 and 1989, when an elaborate anniversary celebration resulted in a very expensive parade. But given the uneven performance, there is no longer any guarantee that the next Rose Parade and Rose Bowl Game will be profitable.

“Any time, in a business, that you see something happening that is abnormal, you need to look ahead for several years into the future and really focus on your direction,” said Dick Ratliff, president of the Tournament of Roses Association. “Just because we had a good year last year does not mean that everything is all better.”

Of course, the Tournament of Roses Association is not your typical business. It is a non-profit organization that has less than 15 employees for much of the year, and relies on a network of more than 900 volunteers to stage its enormous annual production.

Numerous organizations throughout Pasadena have come to rely on the association for donations, which are awarded by the Pasadena Tournament of Roses Foundation, a separate entity that receives $100,000 each year from the association.

This year, the foundation handed out about $150,000 to Pasadena City College, Altadena Christian Children’s Center, the Pasadena Unified School District, the Pasadena Symphony, the Pasadena Mental Health Center, the YMCA of Pasadena and other groups and institutions. (The extra $50,000 came from the foundation’s own holdings.)

“It’s a trend you don’t want to repeat,” said Lynne Hess, president and chief executive of the Pasadena Chamber of Commerce, of the parade’s losses in 1996 and 1997. “When they can’t put money into the foundation, that affects a lot of people.”

Despite losing money, the association continued to give to the foundation, as required by its agreement with the city of Pasadena. The contribution was possible because the association has about $6 million in assets, both in property and cash. “We never really need it except in those years when we show a loss,” Ratliff said.

Making money is not an easy proposition. The parade has become more and more elaborate over the 100-plus years it has been staged, and this year’s event has a budget of about $6.5 million. Much of that goes for operating expenses, ranging from portable toilets to security to telephone and radio communications. The budget also includes $1.5 million for the association’s paid staff. (Materials for the Rose Parade floats themselves, as well as the hiring of their designers, are paid by the floats’ sponsors.)

The cost for city services such as police, street cleaning and traffic control has risen to about $500,000 this year, and some, including Hess, partially attribute the association’s economic problems to that expense.

“In most other major cities, with an event of this magnitude, the cities contribute those services, or major parts of those services, because it is an economic development tool,” Hess said, noting that the parade and game produce sales, hotel occupancy and business license taxes for the city.

But Cynthia Kurtz, Pasadena’s city manager, said that the true cost of the parade and game to the city is around $1 million, meaning that, in effect, the city already subsidizes the events to the tune of $500,000. Tax revenues brought in by these events don’t add up to the full $1 million paid out by the city.

“There is no way, even through bed taxes, with the (hotel) rooms being full, or sales tax, or anything, that we would get that (million dollars),” she said. “We would have to use general-fund money to do that. It’s always looked at as, ‘We will do everything we can at the lowest cost we can.’ ”

The Tournament of Roses Association has limited sources of revenue to cover the cost of the parade and game partially because of the logistics of the parade, and partially because of tradition.

The association’s revenues come from a variety of sources. The largest is the game itself. Under the association’s agreement with ABC Inc., which broadcasts the Rose Bowl Game, and the Big 10 and Pac 10 athletic conferences, the association makes about $3.2 million a year. (The Rose Bowl Game has a corporate sponsor for the first time in its history this year, meaning that it will be referred to as “The Rose Bowl, Presented by AT & T.;” But that deal benefits ABC, not the association.)

Revenues from other sources in 1998 were smaller: $900,000 from game and parade clothing and souvenir sales, $500,000 from grandstand ticket sales for the parade, $210,000 from program sales, $175,000 from event sponsors, $95,000 from parade entry fees, $50,000 from volunteer membership dues and smaller amounts from other sources.

Although the parade gets national TV coverage, it doesn’t produce much revenue because it takes place on public streets, and thus the networks and stations don’t have to pay for broadcast rights.

And because the parade remains a sacred event in Pasadena, the association has resisted signing a naming sponsor. Even the “Presented by AT & T;” tag added to the game was met with resistance as was a proposal earlier this year to find a naming sponsor for the Rose Bowl stadium itself.

Some longtime Tournament of Roses Association observers expect that the financial difficulties the association has faced in the ’90s will spur it to look for new forms of revenue.

“They’re in a tight spot,” said Rick Cole, former mayor of Pasadena and now city manager of Azusa. “Losing a quarter of a million dollars is not really the issue. The question is, where are they going to be a quarter of a century from now?”

For the time being, the Tournament of Roses Association is not making any major changes, Ratliff said. Rather, the association is looking to cut costs through greater oversight of its 33 committees, and to find more money through sponsorships of the numerous smaller events that take place on the same day as the parade and game. Those things, he hopes, will prevent the parade from being a money-loser in 1999.

“The outlook is that we’re hoping that it will be a break-even year,” he said. “We’re hoping that it will be a little bit above the line in the black, rather than in the red.”