I’ve written a couple of recent posts that were extremely critical of PASS and more so C&C which is the company that manages PASS. Someone who read my last post pointed out that I probably didn’t emphasize the budget numbers I talked about enough. So let’s talk about that. I grabbed the most recent PASS financial data which was published in March 2020.
| Income | 7,538,163 | |
| Expenses (total) | 6,589,810 | |
| Expenses (Non-Summit) | 3,275,430 | |
| Cash on Hand (effective) | 2,477,769 |
Summit Revenue Projections
This is a challenge, because obviously I don’t have the actual costs for PASS is spending per attendee for virtual summit. Many years ago, my rough understanding of Summit cost per attendee was that it was $400. So, for the purposes of my math, I’m going to estimate that virtual summit will cost $100/attendee (I suspect the actual cost is closer to $250 given that is what chapter leaders are being charged. Per the June, meeting minutes C&C has agreed to reduce their expenses by $500,000. It’s not clear where that comes in, but let’s just say that drops non-Summit expenses to $2.7MM.
If we have 2000 attendees of virtual PASS Summit in 2020 which I think may be generous estimate, all paying for the whole conference.
| Income | 1,998,000 | |
| Expenses (Summit) | 200,000 | |
| Expenses (Non-Summit) | 2,700,000 | |
| Summit Subtotal | (902,000) | |
| Cash on Hand (effective) | 1,575,769 |
If we have 1000 attendees doing the All in One Bundle and 500 attendees doing the 3 day conference.
| Income | 1,298,500 | |
| Expenses (Summit) | 150,000 | |
| Expenses (Non-Summit) | 2,700,000 | |
| Summit Subtotal | (1,551,500) | |
| Cash on Hand (effective) | 926,269 |
Given my experience and the current economy, I think my above projections are fairly optimistic. Let’s say my cost projections of $100 per person are too low, and the costs are $250 per person. Also, let’s say only 500 people sign up for the full conference and 500 register for the three day conference.
| Income | 799,000 | |
| Expenses (Summit) | 250,000 | |
| Expenses (Non-Summit) | 2,700,000 | |
| Summit Subtotal | (2,151,000) | |
| Cash on Hand (effective) | 326,769 |
PASS doesn’t officially release attendance numbers, they say that 4000 people attended PASS Summit last year, which sounds really great. However, conference math is a factor here—many conferences count precons separate from the individual conference attendance. If you attended two precons, and the conference you would count as three conference attendees. In a best-case scenario where you had 4000 attendees, top line revenue would still drop by $3.5 million (or 54%) and fixed operating expenses are only down $500k (or 16%). That is as they say in business school is an untenable situation.
This is just focusing on the short term—2021 will face similar challenges. It is very possible that by November 2021, in-person conferences will be back (this assumes a vaccine in place, but Goldman Sachs does, and I trust them when it comes to money). However, I don’t see attendance quickly returning to pre-pandemic levels until 2022 or 2023, which means PASS will likely continue dipping into its cash on hand until reaching bankruptcy.
Sure, PASS Pro is a second potential revenue source, but it faces many challenges in getting of the ground and adding enough revenue to have any substantial impact. In addition to the fact that it has many community speakers feel alienated by the conversion of their Summit sessions or networking events into paid of profit sessions.
One final note, in FY2020 PASS spent approximately five percent ($385K) of its revenue on community activities. That number was substantially beefed up by a Microsoft SQL Server 2019 upgrade effort and to the total community spend has been dropping over time. For a point of reference C&C charged pass $525k for IT services in 2019. It’s important to remember that PASS exists to serve the broader SQL community and not a for-profit firm.
