February 12, 2023
The National Rifle Association held a Board of Directors (BOD) meeting on January 6, 2023 and presented financial reports which included a projection of $205M in revenue for 2022 and a proposed budget of $230M for 2023. The forecast of $230M in revenue for 2023 was presented without a business plan or justification and is wholly unrealistic with the downward trends in membership and other revenue streams. The NRA’s projections are unbelievable and would not be accepted in the real world as a viable plan.
The NRA BOD may be shocked to learn that other organizations employ industry related metrics to correlate and validate financial forecasts. In other words, instead of guessing, most companies rely upon trends in the industry directly related to the organization’s core business.
A Realistic Projection
The obvious relationship most closely associated with NRA revenues are U.S. Gun sales1. In reviewing US gun sales data, NRA Revenues will increase or decrease as gun sales vary from year to year. From 2004 through 2019, the NRA received on average $25 for every gun sold in the United States. However, after the breaking news of corruption in 2019, the NRA revenue dropped 48% to $13/gun sold.
The ratio of NRA Revenue/US Gun Sales is a useful metric because revenue for the NRA can be easily calculated for 2023 with a high degree of certainty. Based on the current declining trend of US gun sales, it is projected that total US gun sales will be similar to historical (pre-covid) norms of roughly 13 million guns sold2. With this in mind, a quantifiable estimate of projected revenues for the NRA in 2023 is $169 million (13 million guns sold at $13/gun).
The NRA is projecting $230 million in revenue, which would equate to $18 for every gun sold in the US. This is the same group that also planned $241.2M for last year and missed this estimate by $36M. The NRA estimates are not based on any practical industry metrics or upon a viable business plan to increase revenue; but, instead are misleading the BOD once again into a false premise.
The best-case scenario for the NRA is if total gun sales remain constant at 15 million guns sold, which would yield revenues equal to last year of $205 million. The bottom line is that total expenses remain extremely high, (particularly the legal fees paid to the Brewer law firm) and are projected to be $230 million which equates to a net loss of $25 to 60 million. The Board of Directors were informed at the January meeting that the NRA would break even in 2023, but the truth is that there is no plan or contingency to support their projections which are untenable.
Cost of Corruption
The revenue/gun ratio can also be used to calculate lost revenue directly related to maintaining Wayne LaPierre as CEO. After the embezzlement scandal broke in 2019, the NRA revenue was adversely affected and the gun ratio dropped precipitously to $13/gun compared to the $25/gun before the scandal. The difference is a loss of $12/gun.
The revenue lost due to Wayne LaPierre’s continued employment is roughly $667 Million (from 2020-2022) plus an estimated $100 million in legal expenses (to defend Wayne LaPierre) for a grand total of $767 million revenue loss. Including estimates for 2023, the total loss due to the corruption is approaching $1 Billion. I wonder how many programs, gun sports, grants, lawsuits defending second amendment rights or political initiatives could have been funded by the NRA with $1 Billion? Unfortunately, we will never know.
The Board of Directors have chosen (or through impotent negligence) a path that is destroying the core of the NRA. An NRA Board meeting is scheduled for April in conjunction with the NRA Annual Meeting – this meeting is likely the last chance for the Board to radically course correct. I strongly believe that it is much too late, and it is really over! The bankruptcy court filing will be the next major headline coming from the NRA.