ATLANTIC CITY — After a short stint in Las Vegas, the Miss America Organization’s return to the resort in 2013 was seen as a symbolic and economic boost to a city and state that badly needed one.
But while coming home was supposed to generate goodwill and a tourism boost to a region dealing with a crippling recession and the effects of a devastating hurricane, the economics of the deal largely flowed in the opposite direction.
State agencies have committed nearly $20 million in subsidies as well as several thousand free and discounted rooms and suites, meals and transportation to the organization since 2013.
And with each contract, the pageant’s reliance on subsidies increased. Now, the state’s funding of the event is coming under scrutiny after an email scandal involving former Miss America Organization CEO Sam Haskell.
“During the first two years, they were getting their sea legs,” said John Palmieri, who led the Casino Reinvestment Development Authority until the end of 2016 and helped negotiate both contracts with the pageant. “But then in years three, four and five, Haskell just became more difficult. Our board was frustrated, but of course the importance of the pageant prevailed.”
Moving forward, the state subsidies will be used to help increase tourism, jobs, national television exposure and revenue for the casinos, Gretchen Carlson, the newly appointed chairwoman of the Miss America Organization, said in a statement.
“The relationship between Atlantic City and Miss America is historic, and we are delighted to be able to support our birthplace and thank the state for working with us through our change in leadership as we continue our efforts to empower women,” Carlson said.
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The increased reliance on state subsidies is not what Lt. Gov. Kim Guadagno envisioned when she helped bring the event back to resort.
“When we brought back Miss America in January 2013 — with much less money, I might add — we hoped that it would be self-sustaining,” said Guadagno, who was not involved in the negotiations for the most recent deal. “I agree with Mr. Palmieri that the organization needs to do more to be self-sufficient.”
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Following the completion of the 2013 contract, Haskell sought more money for the pageant despite not promoting the event, Palmieri said.
“They kept coming to us asking us for money,” Palmieri said.
The 2016 three-year, $12.5 million contract saw the yearly subsidies continue to grow while the draw of the event continued to drop. Instead of paying $2.7 million a year as the CRDA did during the previous contract, the state agency saw its contribution increase annually, topping out at $4 million for this September’s event.
In addition, the state agency agreed to pay the pageant $325,000 to cover hotel rooms, meals and other expenses for each show, as well as a one-time $311,000 payment to cover expenses from past competitions.
As part of the contract, the Miss America Organization is required to promote the resort during the opening of the pageant’s ABC telecasts. Also, Dick Clark Productions, the producers of the event, agreed to include a live performance in Atlantic City in each “New Year’s Rockin’ Eve” show through 2019. Those shows never materialized, and Dick Clark Productions cut ties with the competition in December.
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The state agency said it was still reviewing its options regarding the future of the contract, which is set to expire Jan. 1, 2019.
In 2013, Guadagno, the CRDA and the now-defunct Atlantic City Convention and Visitors Authority agreed on a $7.3 million subsidy over three years to get the competition to return from Las Vegas. The contract included more than 800 complimentary hotel rooms for the 53 contestants and their chaperones. Any of the rooms that weren’t used by the contestants were allocated to Miss America staff.
In addition to the free rooms, the visitors authority also was responsible for meals and providing more than 240 discounted hotel suites for the pageant’s celebrity judges and VIPs, 1,000 discounted rooms for pageant direct production staff and 4,000 rooms for pageant fans at host hotels, according to the 2013 contract.
“I frankly haven’t read this contract. I didn’t negotiate the second contract. The second was negotiated between CRDA and the Miss America Organization,” Guadagno said. “We worked on the first one, which was a lot less.”
Bob Ambrose, a gaming consultant who previously worked in the resort, said the event was seen as a way to draw people to Atlantic City.
“Pageant week was a good draw in the ’80s and ’90s when I worked in the city. A.C. was still trying to brand itself as a resort city with casinos, and there were not many large events,” Ambrose said. “However, in recent years, both the brand identity of the pageant and A.C. has changed.”
And in recent weeks, the makeup of the pageant’s leadership has changed as well.
“I’m very excited to see Gretchen Carlson take over as the chairman of the board,” Guadagno said. “I’m absolutely positive with her reputation that we are going to be able to reinvent Miss America.”