Well Beyond the Dollar and a Half

From Wayne Cavanaugh’s Facebook Page; In light of today’s AKC announcement regarding increased fees…

Well Beyond the Dollar and a Half

The AKC recently announced that the event service fee for conformation events will increase from $3.00 per entry to $4.50 per entry beginning October 1, 2025 – a 50% increase. Along with the recording fee of $.50 per entry, clubs will now pay $5.00 to AKC for every dog entered at their shows. Backlash from clubs and exhibitors was swift and furious.

Soon after the initial news made the rounds, questions grew larger in scope. It wasn’t just the $1.50, it was the point. Eventually, there was more discussion about the reasoning than the amount. Who should cover the new $1.50 increase? Why have we accepted, without question, that clubs should pay any fees at all? Should volunteer clubs be the ones that pay? Or should it be a cost of doing business for the AKC? Are clubs feeling less appreciated for all they do for AKC? As new questions arose, it seemed that this simple fee increase cracked open the lid on Pandora’s box, a box that had been sealed shut for far too long.

AKC is a not-for-profit organization. The AKC Mission Statement reads in part as follows: The American Kennel Club is a not-for-profit organization dedicated to upholding the integrity of its Registry, promoting the sport of purebred dogs, and breeding for type and function. Additionally, one of the AKC Core Values reads as follows: We are committed to advancing the sport of the purebred dog. But nowhere in the Mission Statement or Core Values does it say: and our volunteer clubs and customers should have to pay for it.

One explanation from AKC is that the fee is being adjusted to catch up with inflation. Apparently, many clubs, those that work long and hard hours for free to keep their clubs alive, don’t quite see it that way. Dog clubs are composed of dedicated, experienced, and often exhausted volunteers. If clubs are promoting the AKC Mission, should they receive more financial support from AKC? If so, how can those concerns be addressed with positive and creative thinking? Will this issue result in a standoff or an opportunity to open a long overdue discussion about the relationship between AKC and the clubs that put on AKC events.

There is no one-size-fits-all in dog clubs. For clubs on the bubble, any cost increase can become an untenable financial burden. Those clubs work diligently just to break even. For these clubs, the $1.50 per dog increase for a typical 800-dog show would incur an additional $1,200 expense, an expense that some clubs cannot afford.

Other clubs reacted to the fee increase with little to no concern. Those clubs have built larger treasuries and can more easily absorb the costs. Other clubs may be less flush but have created enough demand over the years to pass on the cost to exhibitors by raising entry fees without losing entries. It is not always just a matter of clubs working smarter and harder. Other factors, the club’s zip code for example, also can determine the economics of success.

What about clubs in less populated areas? Do they have the same issues as clubs in more populated regions that now have to compete with clubs within a few hours’ drive? Is one set of rules working for all clubs?

Regardless of a club’s treasury, increasing expenses are a genuine concern. Clubs have had to embrace a new normal to stay afloat; that is, they hire the fewest judges with the most groups. Sometimes, for financial reasons, the number of groups a judge has becomes more important than their background and experience. And now, the $1,200 fee increase for an average show could shrink the panel even more. How has this become the typical method for building a panel? Isn’t that approach reason enough to consider new ways for AKC and clubs to work better together to promote the sport?

The background for the increase is AKC’s claim that they are losing money in conformation events. From an outside accounting perspective, that may sound reasonable. But actually, it depends. Do the accountants making those calculations have a true understanding of the business, the sport, and the AKC mission statement? Or are they calculating profit and loss by simply comparing direct event income from expenses? If so, they’re missing the important big picture.

Are conformation events a simple P&L category? Is the goal for dog shows to make money on their own for AKC? Should dog shows be viewed as an AKC profit center? Or are dogs shows an advertising expense and core element of good will? Most important, aren’t dog shows the most visible AKC outreach program for the promotion the sport of dogs?

You wouldn’t expect advertising to make a profit on its own. Are dog shows a “mission expense? Or are they more accurately categorized as a “loss leader.” In financial terms, a lost leader is a product or service that a business sells at a loss to attract customers who will then purchase, more profitable products, for example, registration fees. Are the accountants including related registration income in the income for conformation events? Why not?
In fact, don’t conformation shows create considerable indirect registration income far beyond the registration of show dogs? Show breeders create single and litter registration income from the dogs they breed that end up in the ring, and those sold pets or performance competitions. The income stream is exponential over time. Show-breeders also promote breeding for type and function, another specific requirement from the AKC Mission Statement. The AKC supported “high-volume breeders” do not.

Most people on the street have watched or heard of Westminster. Did they buy and register a purebred pet because they fell in love with purebred dogs by watching conformation events like Westminster or other televised dog shows? We all have stories to suggest that dog shows indeed are a factor for promoting purebred dogs.
What other tangentially related income is earned through conformation events? Even Goodwill, for example, is real. In basic financial terms, Goodwill is an intangible long-term asset listed on a company’s balance sheet. It’s impossible to imagine that when all related income is included, dog shows still don’t make “a profit” for AKC. But even if they didn’t, so what! Dog shows and clubs serve a far bigger purpose than making a profit and they do so without bleeding the bank.

Dog shows and show dogs are ambassadors, a kind of soft advertising that shows the general population the benefits of purebred dogs and the dedication of those who breed the best to the best to preserve and advance their breeds. Seeing conformation events as an expense not worthy of investment is contrary to “promoting the sport of purebred dogs and breeding for type and function”.

AKC may consider this particular increase as inconsequential, an issue that will blow over. And they may be right. For now, however, the reaction from the sport suggests they may have underestimated their customers. Customers who believe their concerns aren’t being addressed find interesting ways to vent their displeasure. In this case, club members, breeders, and exhibitors didn’t roll over. Instead, they chose to look for other ways to offset the perceived losses incurred by dog shows.

Lots of low-hanging fruit was quickly discovered and discussed. It did not take long for social media posts to pop up suggesting there may be better places to find $1.50 than in the treasuries of volunteer dog clubs or pockets of exhibitors.

Basic corporate financial information such as salaries and tax returns, especially from not-for-profit and non-profit organizations, have always been available to the public. The new fee was the spark that created the incentive to research and report AKC financial information. Increasingly, internet and free access sites have made it easy to find. Let’s be clear, AKC is highly respected for its absolute financial integrity – no one is suggesting otherwise. It was the numbers themselves that lit up social media – especially the nearly 7 million dollars spread among the top ten AKC executive salaries. Exorbitant numbers, especially for a not-for-profit entity.

The public revelation of executive salaries in particular lit a spark that singed more than a few eyebrows. The dedication and hard work of AKC executives deserves appropriate compensation. But when compared to other not-for-profits and non-profits that are similar in size, prominence and scope, AKC executive salaries are absolutely staggering, double or more than that of many similar entities.

I’ve chose not to list individual salaries here; they can be found on-line elsewhere. But here are some summary averages to set things in perspective. For example, the average salary for the top five AKC executives, from the 2023 tax returns, was $909,930, so just shy of a million dollars per person annually. The top ten salaries combine for a total $6,629,472 annually in 2023. That number has reportedly increased again since that time.

Occasionally, we see social media posts from those in our sport complaining, rightfully so, about the salary of the CEO of HSUS. However, AKC’s executive salaries more than double HSUS executive salaries. The average salary for the top five executives at HSUS is $470,414 per person annually, less than half than at AKC. HSUS may not the perfect comp for AKC when comparing missions. But with HSUS employing nine times as many employees and a much larger treasury, it does shed some light on a financial perspective.

The other area of major concern as seen on the internet and heard around the rings are the bloated expense and reasoning for keeping AKC offices in NYC while the vast majority of staff and all operations are in North Carolina.
The expense of keeping offices in one of the highest-rent buildings in New York City has been controversial since the early 1990’s when AKC moved all operations to North Carolina. During that transfer, for reasons difficult to defend, 75 employs were kept in the AKC offices at 51 Madison Ave, that served as headquarters at the time. Those were impressive offices, but they pale in comparison to the absolute opulence of the newer offices on Park Ave. to which AKC moved in 2019.

Why can’t resources spent on grand NYC offices be reallocated to support clubs so clubs can afford to do help the AKC promote their Mission of promoting the sport of purebred dogs?

If there ever was a time that companies thought a fancy address meant prestige, that ship sailed years ago. If companies believe they need to be in NYC because of access to media, look no further than the headquarter addresses of the top ten companies listed in the NY Stock Exchange. Not a single one needed an NYC address:

1. Walmart Bentonville, AR
2. Amazon Seattle, WA
3. Apple Cupertino, CA
4. United Healthcare Minnetonka, MN
5. Berkshire Hathaway Omaha, NE
6. CVS Woonsocket, RI
7. Exxon Spring, TX
8. Alphabet Mountainview, CA
9. McKesson Irving, TX
10. Costco Issaquah, WA

It seems like companies in Bentonville, Woonsocket, and Issaquah have had pretty good luck at getting their word out.

Not-for-profit organizations are allowed to make profits. However, those profits must go back into the company to support its mission as AKC has done for over a century. Some profits may be reallocated into reserve funds, funds set aside for future use. Some may be applied to other cost centers. But the question becomes, how best to allocate profits to fulfill its mission to promote the sport of purebred dogs. And, how best to cut expenses to re-allocate funds to the areas that best serve the AKC mission.

Sometimes a seemingly small issue can serve as the impetus to ask questions that hadn’t been asked before. For example, instead of raising the fee, why not ask why AKC should charge the fee at all? Outlandish? Maybe, but raising those kinds of questions can encourage a fresh look far beyond the old “we always did it that day” mentality. The sport is shrinking. Avoiding uncomfortable questions and challenges is a great way to guarantee failure. It’s time for a deeper look.

Wayne Cavanaugh

Short URL: http://caninechronicle.com/?p=335690

Posted by Liz on Aug 14 2025. Filed under Current Articles, Featured. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.