Opponents question Sturgis trademark group's charitable donation

Publish Date: 
Dec 22, 2011
By Holly J. Wagner

The company that holds trademarks for the Black Hills Motor Classic has made donations of $50,000 to help 35 Sturgis area charities, but the donation has done little to sooth jittery vendors who oppose the trademark registrations.

Sturgis Motorcycle Rally, Inc., (SMRI) gave the money to the Sturgis Rally Charities Foundation to dole out to deserving organizations ranging from schools to senior citizen agencies and service clubs. Last week that group gave out $79,000 in donations, which includes the SMRI contribution, money from the city and from the annual motorcycle raffle.

But some of the trademark opponents, who fear that the city and charities will get short-changed under new licensing agreements, say the donations aren’t enough, considering profits. SMRI chairman Dean Kinney counters that the company, formed specifically to manage rally trademarks, has high legal and debt service expenses that keep it from giving more.

The City of Sturgis paid SMRI $50,291 in licensing fees it collected from major sponsors just weeks before SMRI announced its donations. That rankles some vendors opposing the trademarks.

“I feel like it’s almost a Ponzi scheme when they take money from the city and give less back, then take all the money from the licensing fees,” said Renegade Classics owner Kent Mortimer. “Why would the city go through SMRI?”

Posting to trademark opposition group Concerned Citizens for Sturgis (CCFS)’ Facebook page page, commentator Steve Johnson called it a publicity grab. He wrote: “I got an idea. If someone would give me a check for $50,291 I will turn around and donate $50,000 in front of the national media cameras … oh wait that has already been done.”

SMRI’s major cash expenditures in its first year were debt service of $201,000, legal fees of $208,000, and $53,000 (including a $3,000 donation made earlier in the year) to the Sturgis Rally Charities Foundation, Kinney says.

“Obviously the legal fees are high mostly because a handful of folks have chosen to fight rather than contribute,” Kinney says. “We must protect the marks, of course. But for this factor, however, the money available for donation would be much, much, higher.”

Mortimer says that’s a circular argument, since SMRI has sued vendors who refused to buy licenses. He says none of the license fees collected from smaller vendors appears to be going to charity.

“None of what is collected from T-shirts and buttons goes back to the community,” he says. He, along with posters to Facebook pages for SturgisBuzz and CCFS, also thinks a donation barely more than the city’s license payment is a thin veil, a charge Kinney disputes.

“The city is just another licensee. An appreciated one, to be sure, like the others, and our relationship with the city is very important on a variety of levels,” he says. “However, the city licensing fees for 2011 are no different than the licensing fees collected from any of our other licensees. SMRi will finish the year with total income of about $435,000.”

The SturgisBuzz Facebook page also has numerous messages of gratitude from leaders of groups that received funds this year, and Sturgis Rally Charities Foundation president Kathy Hersrud knows why. “We were able to give out more money this year than we ever had before,” she says. This year’s funding was upwards of $79,000, she says, while the previous high mark was about $52,000. “We’re quite grateful that we got the amount that we did. We were able to fully or partially fund every request, and we’ve never been able to do that before.”

One thing everyone seems to approve of is the donation of $5,000 toward a satellite uplink for National Guard troops serving in remote areas of Afghanistan. The donation was made as a tribute to the late Tom Monahan, serial entrepreneur and owner of Tom’s Ts who died suddenly of a heart attack earlier this month. Monahan, who designed the Sturgis rally logo that is still in use and donated it to the chamber of commerce to help promote and run the rally, said last August that he hoped the trademark issue could be resolved in a way that benefits the community.

For the city’s part, its annual rally report shows the city took in $226,141 in sponsorship revenue, $243,600 in vendor fee revenue, $212,906 from city property rentals and $205,733 in city sales tax collected during the rally. This despite a smaller crowd that was attributed to the rally being in a post-anniversary year.

The minutes from the Dec. 5 Sturgis City Council meeting note that the city’s licensing agreement with SMRI expires at the end of this year, so the city will negotiate a new arrangement for the 2012 rally, scheduled for Aug. 6 to 12.

The lawsuits and challenges to the trademark registrations are ongoing, with no court dates on the calendar until next July.

Organizations that received donations and amounts are:

  • Adult Services and Aging $1,000
  • American Red Cross, Black Hills Chapter $2,000
  • Black Hills State University RSVP Program $1,500
  • Crisis Intervention Shelter Services $10,000
  • Greater Sturgis Area Transportation $3,000
  • Hellfighter Outreach Ministries $1,500
  • Junior Achievement of the Northern Hills $1,100
  • Meade 46-1 (school district) $500
  • Meade County Housing $1,000
  • Meade County Housing $300
  • Meade County Senior Citizens Center $1,500
  • Meade School District School Nurses $5,000
  • Northern Hills CASA Program $5,720
  • Northern Hills Drug Court $2,500
  • PCT Program, Black Hills Care System, Ft. Meade $1,000
  • Realtors for Kids $3,000
  • Rural Meade Ambulance Service $2,500
  • Sturgis Alliance for Churches $5,000
  • Sturgis Area Arts Council $500
  • Sturgis Area Child Protection Team $3,000
  • Sturgis Area United Way $1,000
  • Sturgis Center for the Arts $2,000
  • Sturgis Elementary Music/PE Department $1,500
  • Sturgis Elementary School Reading Challenge $1,000
  • Sturgis High School Softball Association $500
  • Sturgis Jaycees $2,000
  • Sturgis Kiwanis Food Pantry $6,000
  • Sturgis Public Library Children's Program $500
  • Sturgis Public Library Teen Services $500
  • Veterans Club $1,000
  • Western Resources for dis-ABLED Independence $1,000
  • Whitewood PTO $1,000
  • Sturgis High School Post Prom $1,000
  • Sturgis Community Preschool $1,000
  • 842nd Engineers Connect 842nd Home $5,000 (in memory of Tom Monahan)

 

Read more about the ongoing Sturgis Rally Trademark Wars:
- TRADEMARK WARS: Group plans to fight enforcement of 'Sturgis' mark
- Group asks feds to invalidate Sturgis rally trademarks
- Trademark wars: Expect crackdown on unlicensed products at Sturgis
- Souvenir vendors give mixed reviews for 2011 Sturgis motorcycle rally
- Organizers of dueling Sturgis rallies settle trademark lawsuit
- 'STURGIS' now a federal trademark
- Mississippi motorcycle rally battles financial and trademark woes

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