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ICANN’s new gTLD fund at $352.3m

Kevin Murphy, November 2, 2012, Domain Policy

ICANN had $352.3 million in its new gTLD program bank account as of October 13, according to notes from a recent board meeting.
The numbers suggest that ICANN had only spent about $6 million on the program since the application window closed at the end of May.
With 1,930 applications at $186,000 a pop, excluding the seven refunds, ICANN should have grossed about $358 million.
The money is being held in a non-interest-bearing account, partly due to ICANN’s insistence that the program is not an exercise in self-enrichment.
Notes from the October 13 Board Finance Committee meeting also reveal that ICANN plans to revise its 2013 budget to account for the accelerated gTLD timetable.
The current budget was prepared before Digital Archery was scrapped and ICANN expected to process its applications in batches over two years. It now expects one batch lasting one year.

ICANN budgets for 2,000 new gTLDs

Kevin Murphy, May 2, 2012, Domain Policy

ICANN could net $150 million from a 2,000-application new gTLD round.
That’s according to a proposed budget published for comment last night, which for the first time contemplates more than 500 new generic top-level domain applications.
The budget also contains budgets for 500-application and 1,000-application rounds.
But with ICANN revealing this week that it has 1,268 registered users of its TLD Application System, 2,000 applications is beginning to look extremely plausible.
ICANN would receive $368 million in fees from a 2,000-app round, according to the budget, of which an estimated $33 million would be returned in refunds when applicants withdraw.
But the operating cost of the program would only come in at $156 million – slightly cheaper on a per-application basis than a 500-app round due to volume discounts from its contractors.
What happens to the rest of the money?
About $30 million is returned to the ICANN contingency fund to recoup program development costs. A $31 million surplus could be considered “profit” – it’s budgeted as an increase in net assets.
But the majority – $120 million – is budgeted to the amorphous “risk costs” line item.
The risk fund – sometimes flippantly referred to as the legal war chest – was budgeted to cover unanticipated costs such as delays and litigation.
ICANN evidently does not anticipate any economies of scale here. The $120 million in the budget is a simple multiple of the $30 million it said it needed to cover risk in a 500-application round.
It’s quite possible that ICANN won’t even need to dip into the risk fund, or that it might only need to withdraw a small amount, which would leave it sitting on an embarrassingly large wedge of cash.
The organization has yet to decide how its surplus would be deployed, but it’s going to be kept in a separate bank account and accounted for separately.

As new gTLDs loom, ICANN expands

Kevin Murphy, September 21, 2011, Domain Policy

ICANN plans to upgrade its offices in California and Brussels to deal with anticipated staff growth as the new top-level domains program kicks off.
In a resolution passed late last week, the board of directors said that ICANN should start negotiating for more space at its current location, or to find a new location in Marina Del Rey.
It also resolved to lease a permanent office in Brussels, where it’s currently paying month-to-month at a Regus managed office facility.
Both resolutions are redacted of the specifics of price and locations of interest, presumably in order to not jinx ICANN’s negotiating position with its landlords.
ICANN employs 124 staff, and has job openings for 21 more, according to its latest CEO’s report. Many of its open positions are intended to support the new gTLD program.
Its fiscal 2012 budget includes $2.1 million to pay for its offices in Marina Del Rey, Brussels, Washington DC, Palo Alto and Sydney.
Also in Friday’s board meeting, ICANN approved the formation of a search committee to find itself a new CEO, following the announcement of Rod Beckstrom’s July 2012 departure.
The committee isn’t likely to be formed until the next meeting, in Dakar, October 28, so don’t all start typing up your resumes just yet.
The board also approved the appointment of new chief financial officer Xavier Calvez, who was named to the post on an interim basis earlier this month.
He will receive a salary of $250,000, with a 30% ($75,000) performance-based bonus. That’s compared to his predecessor’s $170,000 base and 20% bonus.

The price of ICANN transparency: $2.6m

Kevin Murphy, April 24, 2011, Domain Policy

ICANN has estimated that it will need an extra $2.6 million on its fiscal 2012 budget to cover the cost of becoming more transparent and accountable.
In March, the organization decided to implement the 27 recommendations of its Accountability and Transparency Review Team, and last week the board asked its finance committee to look into budgeting the project.
The cost is estimated at $2.6 million for fiscal 2012, which begins in July, according to the resolution passed by the board on Thursday.
That’s much more than the initial estimate of $965,000 mentioned in staff briefing documents (pdf) provided to the board before its meeting in March, which excluded the ATRT recommendation that ICANN’s directors receive compensation.
The extra cash is required to hire additional staff and pay for consulting services. Presumably some of it will now also be needed to pay the board.