An open letter to Mr. Ron

Menaker...

©David J. Arthur, September, 2008 An open letter to Mr. Ron Menaker RE: In Response to the Chairman's Report, September 2008 Dear Mr. Menaker, You are concerned about loss of revenue from the “retail sector”. I can understand that the American Kennel Club (AKC), like any organization, cannot sustain itself while hemorrhaging red ink. But this anxiety over market share concerns me greatly. I can’t imagine you were unaware that responsible breeders never sell to retail outlets. Yet that seems to be the very market the AKC intends to target, and leads one to ask if our sport is really about “market share”? Can we really reduce the whole of our fancy to a spreadsheet? For those of us breeders who strive to perfect our art, we often face the fact that the returns on any given litter will never exceed the expenditure input to produce it. Yet we continue because of our devotion to our breeds. I agree that competition is fundamental to business. It sharpens each competitor to offer better products to the consumer. But it also separates the proverbial wheat from the chaff. And so, I’m curious as to which direction the AKC intends to take? Will you be seeking to strengthen your alliance with us, the reputable breeding community, or conversely, to find more creative ways to cater to commercial breeders? I’m sure you realize these are not parallel directions, but rather, are diametrically opposed concepts, one based on increasing quality while the other is devoted only to revenues forged from escalating quantities. I also understand that finances can be difficult during these times. Fuel costs have soared, food prices have all but leapt off of the kitchen countertop, and the whole economy is sluggish at best. But financial challenge can be met in other ways. You can go after a new competitive market share, you can assuredly cut expenses, but most of all, you can offer a much better product. Sadly, you seem to be seeking the former with only limited reliance on the latter. As you say, “The declining registrations and associated core revenues, if allowed to continue, will fundamentally change our organization going forward. Make no mistake, the very future of the AKC and our sport is at risk.” But the loss of funding is not why AKC is faltering, though it does betray a base value that is leading you down that path. You note further on that you, the AKC, was a premiere brand. But already you have lessened your own reputation because of your alliances with the retail world. Courting the commercial market does nothing beneficial in any regard to your standing. For example, Walmart has an enormous market share in retail, but you certainly wouldn’t expect to find them selling Rolex watches at their jewelry counter. You don’t get premium products from a discount house. If you want to tender a greater reputation, then you must look toward aligning yourself with superlative breeders. Taking the tact of romancing the commercial industry means that the AKC may well go the way of Westinghouse, Pan American Airlines, Standard Oil, EF Hutton, Woolworth's, and Montgomery Wards. The truly premiere amongst our sport won’t look kindly at sharing their reputation with the likes of Petland. At one point, you state, “there are at least 30 All-Breed registries in addition to the AKC, whose combined registration numbers exceed that of the AKC.” The truth is, there is only one other true all-breed “registry” in the U.S., and that would be the United Kennel Club (UKC). The others are pseudo-registries, and they do not afford reputable breeders with anything useful. They parade as registries, but are nothing more than paper mills, where you can register a Chinese Crested as a Lochen if you groom properly and send them well posed pictures. Becoming like them only cheapens your value. Yet you persist, “If this trend is allowed to continue, if we do not stop the hemorrhaging of declining registrations, we will no longer be the premier registry in the world, let alone in our country.” I’m afraid you have misunderstood our need as reputable breeders. Greater numbers of registrations may well bring in more revenue, but numbers alone have no effect on your reputation or the usefulness to us. If by “premiere” you mean being the biggest registry in the world, then this “hemorrhaging” is a problem. But if “premiere registry” means being the world’s best, then the obvious conclusion is that you can never also be the biggest. It’s a matter of quantity or quality, and you’re either the biggest or the best. That, sir, is your true dilemma. Reading further in your report, I find the following to be most interesting: “Management has been directed by the Board to aggressively pursue all dogs eligible for AKC registration. We intend to reach out, communicate, and educate those in the retail sector as to why an AKC puppy is the gold standard and why they should be registered with American Kennel Club. In achieving this objective we intend to continue to ‘raise the bar’ by vigorously enforcing our policies. This action is essential to protect and preserve our leadership.” I hope you realize this is, in fact, a complete oxymoron! You are targeting “the retail sector”, which clearly feeds the puppy mill industry, which is noted for the least quality possible. And upon what will you educate them? They have no interest in education concerning the AKC’s “gold standard”, which is bronze at best because of your unfettered efforts to cater to them. They will never replace quantity with quality, and the whole concept of milling is an absolute antecedent to the work done by reputable breeders. As you seek to enfold the pet production market, it clearly means that the AKC is not the Neiman Marcus of our sport, but rather the Canine version of K-Mart. You can’t “raise the bar” by lowering it and to date you have yet to truly enforce your policies on the industrial pet market. Is it not true that it is against the AKC policy to flip a registration? At least that was the case years ago. Yet when was the last time the AKC went after puppy brokers and pet stores who do so with regularity? In fact, if you truly enforced your policies and honestly upheld a commitment to your mission statement, registrations would reduce anyway as many so-called breeders would not be able or willing to meet your requirements. I’m also a bit confused in your assertion that, “As the pre-eminent and only not-for-profit registry, we live our values everyday with our commitment to the integrity of our registry and the excellence of our inspections program.” Through the grapevine, it has come to light that you intend to register any dog that the owner states has an unbroken line to registered ancestors. Can you not see that once pups are placed, even reputable breeders have little to no control over their future propagation? More than just a few of us have been bilked into situations where someone has violated a contract, took their AKC registered dog(s) – including those with limited registration – and bred them further in an corrupt manner. They may even switch sires or add puppies to other litter paperwork. So there is no telling as to the validity of any given pup. This is occurring even now with the present rules in place. Once you open the door to register puppies from unregistered litters, then your limited registration is meaningless, as well as the purity of your stud books. What is to stop someone from simply breeding paperless pets, handing the new owner a copy of the pedigree – or a copy of any pedigree, for that matter – then telling them of your new program? Bingo, they now have a registered purebred. These pups can be bred as well, seeing as they too share that unbroken lineage. You will undermine the only thing that makes an AKC registration worthwhile, the purity of your studbooks. As to requiring adherence to your “compliance and inspection programs”, again, you speak of elevating the quality of AKC puppies. Yet if you truly held to a strict quality assurance program, you would again lessen your number of registrations. It’s either quantity or quality, and you cannot escape this principle. If you put limits on the number of litters bred, the quantity of pups produced, or even the health and care of the breeding stock, your largest producers will either find you too restrictive, or may not be willing to submit to your inspections. Will they lose money by lessening output or spend money to raise the level of care? My guess is that they will simply retain their relationships with the other “registries”. I doubt seriously you will be able to suddenly turn the commercial market into a font from which happy and healthy show quality puppies spring forth. The commercial market – the very same that you seek to attract – doesn’t care about puppy socialization, genetic health screening, grooming, exercise requirements and least of all, adherence to breed standards. They care only about money, which is alarmingly close to the core value that seems to fuel your most recent efforts. So while you anticipate your compliance program will become the benchmark of excellence, excellent breeders are not the ones who will fill your coffers. You don’t find quality breeders amongst the mills. Then you assert, “The American Kennel Club provides what no other registry provides.” I’m not sure what the AKC is able to give us that the UKC can’t provide. You speak as if the AKC is the only outlet we have as exhibitors. Granted, an AKC championship still outshines nearly all other titles. But in most breeds it is also less difficult to obtain than a UKC Grand Championship, and the UKC shows are more fun to attend. They are far less stressful, wonderfully informal, have no professional handlers, and use many of the same judges as does the AKC. They also offer something your registry does not, the Total Dog title, which requires qualification in both performance and conformation on the same day. UKC dogs are required to do much more than just look the part; they must also be able to perform. So as exhibitors, we are already experiencing, “the same joys and passions we have so fortunately enjoyed for more than a century,” and are doing so at considerably less cost. And when you talk about a “staggering 53% decline” in registrations, this has little to do with any of the legitimate registries. Are you oblivious to the fact that those of us in the show fancy often have multiple registrations on our dogs? My own are AKC and UKC registered, with conformation and performance titles from both. But when the UKC invited the genuine breed and all-breed registries to a summit, it was the AKC who declined to attend. You cut off the others who were your greatest allies in this situation. You would have done much toward fostering our desire for that dual registration had you not turned your back on them. And I won’t even mention the firestorm that arose over your decision, now reversed, regarding judges holding dual approvals. All of this leads me to wonder if you are seeing this situation correctly; is the glass truly half-empty? Maybe the reason your registrations are falling is because of potential brand value. Maybe the AKC really can become something more than just an advertising tool in the local classifieds. You will never be able to hold sway over the likes of the American Pet Registry, the National Kennel Club, the Universal Kennel Club Inc., or any of the paper mills. They will always be the darling of the commercial market and in the eyes of many – if not most of us within the sport – they are spouses within a marriage made in Hades. The unscrupulous will always take the track of less effort. So compromising your standards for the sake of increasing your revenues should work. For example, your deal with the Hunte Corporation would have clearly padded your bottom line. But as we in the reputable breeding community made it abundantly clear, it would have sold out every one of us who hold our own reputations in the highest regard. You surely would have increased your commercial share, but would have done so in trade for losing us. And the AKC brand would have been further degraded. So maybe this really isn’t about the sport. You say that, “as we lose registrations, we also lose our core revenues, our ability to generate alternative revenues and our legislative influence.” Is it all about “core revenues”? You say you want to, “get back on track growing our influence as the premier registry in the world.” I grant you, the AKC was the premiere pride of our sport. But the reason you have lost your standing is because you sold out by chasing after those “core revenues”. You should be striving to ensure that the buyer has a puppy that is a full measure above those bought in pet stores, flea markets, and parking lots. By your present policy, the free, out of the standard, next door neighbor’s sex education project for their children, is suddenly placed on the same level with our highest show champions. To have an AKC registered dog means little, if anything, these days. And this is all because of your focus on fiscal returns over the quality of a Best In Show special. You say that you, “know that AKC puppies and our breeders are the best”; that, “they are the ‘Gold Standard’ in the marketplace.” Reading this, I have to wonder if you have been out in the trenches as of late. The average person on the street sees you as no better than the Continental Kennel Club. In the near twenty years I’ve been a breeder, it has always been the case that an AKC registration only meant the dog was purebred, but not that it had any inherent quality. And the reason the other “registries” are weakening your position is because you are now seeking to emulate their practices. You are not bringing the sport up to a higher standard, but rather, you are sinking the AKC’s reputation to a much lower one. Follow that course, and you truly will become, “a nostalgic memory.” I also beg to differ that the millions of registration dollars you collected from AKC pet owners, “overwhelmingly subsidized our sport.” Other than sanctioning events, what services do you really provide? I’ll grant you that the Canine Health Foundation (CHF) is of value to us. But they are an independent entity to which the AKC lends support. And when some of us have sent information to you to help identify puppy mills, we are regularly told that you are just a registry and that it is not your function to police the breeding community. And though you do keep a well-dressed website, the fancy, not the registry, subsidizes the “sport”. When I was on the board of a breed club, AKC never once sent us a check to cover any of our expenses. Yet we were required to outlay resources toward some form of public education. I know many a judge who has yet to be paid directly from the AKC, and that includes their training. The clubs write the checks for the shows, and judges pay for the various seminars and other education themselves. The clubs pay for the facility, the hiring of the superintendent (if one is used), the equipment, food, advertising, printing, postage, and in the end, when all of the entries fees are collected, we send a check to you. The clubs are the sport, not the registry! It seems almost laughable to hear you say, “let me make it clear to all, that the AKC will continue to enthusiastically support the Parent Clubs' Codes of Ethics including, as it relates to their members' sale of puppies through commercial entities.” Is that not the very market you intend to pursue? Or are you looking to make headway with the backyard breeders, who are equally as abhorrent to those same parent clubs? I’m not sure how you can reconcile the two concepts, as membership in even the local breed clubs have stipulations that you may never sell puppies to brokers or direct commercial outlets. In the end, I guess the most telling aspect of your report is as follows: “If the current trend continues and dog registrations decline to 250,000 over the next several years, AKC will face an annual revenue shortfall of $40 million. To put this in perspective, if this scenario occurred, and we relied solely on raising the event service fees to make up for this revenue shortfall, the fee would be a staggering $20 per entry. Our preference would be to grow our registrations to the point that we could lower, not increase event fees. Some would say the obvious solution is a significant reduction in expenses. However, a $40 million revenue shortfall would necessitate a reduction of our expenses by two-thirds. This is totally unrealistic.” Either way, you lose market share. And the question begs an answer as to why you have such high expenses. Yes, you reduced the number of employees. But you still reside in some of the most expensive real estate available. Shouldn’t you have moved your entire operation to North Carolina? I understand the cost of living is much lower there. I disagree that you only have a revenue crisis. You also have a serious expenditure problem. So maybe change is necessary, and I do believe our sport truly faces additional risk. But I dare say it is not from lost revenue to any single registry. We are in far greater danger from Breed Specific Legislation (BSL) than from the fiscal trials facing the AKC. By fostering commercial breeders, you actually feed into the pet overpopulation hysteria, and thus your desire to increase funding is the very attitude that puts the sport at greater risk! Welcoming the commercial market also ushers in the likes of Petland, Jack’s Pets, and the whole of the Midwestern milling industry. They flood the country with countless hordes of substandard pups – complete with genetic and health problems –and stimulate the rise of PETA, the Humane Society of the U.S., and even such fanatical groups as the Animal Liberation Front. If you succeed in making this unholy alliance, you will see these organizations blossom, taking us ever closer to the edge of destruction. My advice is to simplify your operation and cater to those who will bring you the most honors. Our future should never include legitimizing industrial puppy breeding! It should remain as the home-spun sport we, the reputable breeding community, have tried to keep it for ages. We want to enjoy our sport, and not see it professionalized to the point where competition is out of reach to the average exhibitor. We want to see good dogs brought forward, not just spectacular handling. We would love to see the AKC address the puppy mill problem and to have protection against the ravages of BSL. Do this, and we would gladly bring our registrations to you. But that will take a commitment from you, so that an AKC registration would mean more than just the hope one’s puppy has a reasonably pure bloodline. If you truly want to regain being the “Gold Standard” of our sport, then you will have to give us a registry whose aim and purity meets that same standard. While I know my few registration dollars will not entice you to listen to my words, as I only breed one litter every two or three years, maybe you’ll begin to listen to the fancy at large. We’ve been discussing this ringside for decades, and though we still are amongst the faithful for now, should you follow this stated desire to chase after market share in place of strengthening your bond with us, you could find yourself being the top-dollar pet registry, with little support or respect from the sport to show for it. Backing the mills means abandoning even your own parent clubs. My hope is that you will listen to us, lest you find in the end that the AKC has lost their status for the sake of money. You will have lost the greatest treasure of all, the ability to validate our fine and noble breeds. Sincerely, David J. Arthur Aircastle Standard Poodles