Report: Miss America Pageant Finances Raise Questions

In an analysis of the Miss America Pageant’s finances by the Press of Atlantic City, the paper found the pageant organization’s expenditures and top executive salaries fluctuate wildly even as the New Jersey Casino Reinvestment Development Authority is pumping $7.5 million into the pageant, which returned to Atlantic City this year.

The Miss America Pageant returned to Atlantic City in 2013 as the state provided the organization with .5 million to offset production costs.

The pageant is credited with bringing $32 million to the city when it aired in September, but a recent analysis of the pageant’s public financial documents by the local Press of Atlantic City is bringing some criticism to how the pageant handles its finances.

The Press study found:

• The Miss America Organization, a registered nonprofit as a scholarship organization, operates under the guidance of Sam Haskell, a CEO who has no set salary. In 2012, the organization agreed to pay Haskell’s firm $500,000 as a consultant while he was serving as board chairman.

When that money wasn’t available, he took $100,000 with the balance still owed “at a future date,” according to tax returns for the organization, which lost more than $430,000 in 2012.

Haskell is a former Hollywood agent, who has been included on lists of the most influential people in television. He became CEO last year after seven years as Miss America Organization board chairman.

The Press quoted officials from charity watchdog groups as saying that having “unspecified” salaries is a poor way to conduct business.

• CRDA agreed to advance a $250,000 payment to the organization in November after the organization said it could not pay its bills without the added cash flow. The organization is due $7.5 million in installments stretching through 2015.

Miss America officials blamed the deficit on the fact that the organization had not properly accounted for putting on two competitions in one year. The pageant was held in Las Vegas in January 2013 and Atlantic City in September 2013.

Pageant officials denied the shortfall came because the organization overestimated the revenue it would receive from the return of the Miss America Parade to the Atlantic City Boardwalk. While attended by and estimated 100,000 people, the parade did not draw expected crowds nor generate expected revenue from seating tickets. CRDA officials, however, pointed to low parade revenue as the source of the shortfall.

• Haskell joined the 14-member Miss America board in 2005 and became chairman a year later. As chairman of the board, Haskell has never drawn a specified salary. The organization agreed to pay $500,000 to Haskell’s firm, Magnolia Hill Consultants. Haskell called the payment “reimbursement money” for the seven years he has spent leading the organization’s board. He said there is an agreement that the organization will pay him only if it can afford to do so.

The Press interviewed former board members and pointed to records that show the board chairman and board members have not traditionally been paid. Haskell, however, is said to have used his entertainment contacts and expertise to help negotiate deals for the pageant broadcast.

• Miss America’s assets have fallen from $873,895 in 2009 to $61,418 in 2012, but officials say many assets now rest with a new foundation, which does not specify liabilities of individual funds such as the Miss America Scholarship Fund on its tax returns.

• CRDA splits the annual production costs and one-half of the annual building operation costs associated with the pageant, up to $4.5 million. The organization pays for the Miss America Parade, with CRDA helping to secure necessary city permits and security services.

Every year, the CRDA will pay up to $2.3 million. In May, $500,000 is due; another $700,000 is due 30 days before the competition; $800,000 is due on the day of the show; and the remaining balance is due 30 days after the event.

Budget reports submitted by the Miss America Organization to the CRDA show the organization stuck to its $4.4 million budget.