With finances 'dire,' MusicNL scaling back operations, awards week

Newfoundland and Labrador's leading music trade association is scaling back operations and events this year because of debt that could send the non-profit organization into bankruptcy.

In an email to organization members sent Friday by interim chair Amy House, the organization's debt is about $200,000 on a total operating budget of $436,000.

"MusicNL's financial situation is dire," wrote House, who noted that as a non-profit, MusicNL should not run a deficit or have any significant debt.

"Unfortunately, financial challenges continue to plague the organization as unexpected bills continue to emerge."

House told CBC on Saturday afternoon that the interim board that took over had no idea about the financial problems at the organization.

It seems like nobody realized the extent to which they were in debt, that's my understanding.- Amy House

"We didn't realize what we were getting into to, but that's what unfolded, so that's where we are right now, just trying to right the ship, if you will," she said.

"There are still invoices that are still surprisingly coming in."

House said it appears MusicNL has been overspending for the past five or six years, and that they're trying to reduce expenses nowto erase about a $30,000 deficit this year.

Lack of oversight

She said she thought there would have been more oversight to prevent the organization from running deficits each year.

"One would assume that was going on, but it seems like nobody realized the extent to which they were in debt, that's my understanding," she said.

"This board is there, working with what we have. We're working, we're focused, we're trying to move forward and find our way up out of this. We're not going backward."

In her letter to Music NL members, House also wrote the board is "working closely with government agencies and the bank" to prevent bankruptcy.

"It is not something we can guarantee, but it is something we are working hard to avoid," she wrote. "We continue to be hopeful that we will be able to lead MusicNL out of this situation and are grateful for the understanding and assistance of our funders and lenders."

Reduced MusicNL Week

House attributed the problem to a "number of compounding issues," but after a review of records, it's "largely a product of significant budget overruns on various projects over a number of years with no emphasis on debt recovery."

House's letter blames "inadequate financial management" but says the review has not found any evidence of intentional misconduct.

Our priority is to get the funding out to the artists- Amy House

The letter notes the organization will have to scale back operations and programming until its financial situation improves. That includes a reduced MusicNL week, the organization's annual industry showcase and awards, which includes a conference and showcases.

"This model of MusicNL Week will not take place in Corner Brook or anywhere else this year," wrote House, who added that the awards portion of the event will go ahead, "albeit on a much smaller schedule in contrast to the sizable event shows produced in previous years."

Export program on hold

The organization is also cutting staffing from two full-time jobs to one, along with two positions that are funded through the provincial government's job creation partnership. MusicNL is also suspending its export program, which sends musicians from the province to perform in other countries as a marketing showcase for local talent.

"Our priority is to get the funding out to the artists, like the grants programs and artist development, that kind of stuff," she said.

"We want to make sure that that happens. But the programming, like the export program and the MusicNL Week, those things we have to scale back. We won't be doing a lot of that this year. We'll still be having our 2019 MusicNL awards, but it'll be a very small event because we don't have money to have a big long week of showcases and a big awards show."

House said artists should continue to apply for grants as usual, as that remains the organization's focus.

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