Miss America Pageant Under Fire for Casino Reinvestment Funds Subsidy

Controversy surrounding the Miss America Pageant has led to some New Jersey lawmakers questioning the pageant’s $4 million a year subsidy of casino reinvestment funds (Contestants on the Boardwalk in Atlantic City at left). Lawmakers argue that the pageant has not brought the economic impact to the city to justify the subsidy. Coupled with the pageant’s recent loss of Dick Clark Productions as a TV partner, the pageant’s future in the resort is uncertain.

An email scandal that led to the resignation of several top Miss America pageant officials may also hurt the pageant’s relationship with Atlantic City.

The Miss America Organization receives a $4 million subsidy from the state Casino Reinvestment Development Authority to hold the pageant in the resort. The recent scandal has caused several Atlantic City area lawmakers to question the deal and whether the resort is getting its money’s worth.

State Assemblymen Chris Brown and Vince Mazzeo, state Senator Colin Bell, and Atlantic City Mayor Frank Gilliam have all called on the authority to get out of the final year of the agency’s contract, according to the Press of Atlantic City.

“Renewing the multimillion-dollar Miss America contract with CRDA was never the right move,” said Mazzeo. “It’s time to end the handout and move on. Atlantic City has too many good things happening in the future to be stuck on an event that has only brought in a respectful return in the distant past.”

The pageant found itself embroiled in controversy after leaked emails by pageant officials—including former CEO Sam Haskell—making derogatory and lewd comments about past pageant winners. Several members of the pageant’s board have resigned and Dick Clark Productions—the pageant’s TV partner—cut ties with the Miss America organization.

Former Miss America Gretchen Carlson has been named the new chairman of the pageant’s board and several other former pageant winners have also been named to the board.

“Everyone has been stunned by the events of the last several days, and this has not been easy for anyone who loves this program,” Carlson said in a press statement. “In the end, we all want a strong, relevant Miss America and we appreciate the existing board taking the steps necessary to quickly begin stabilizing the organization for the future.”

But the controversy has also re-ignited a long-standing local debate of the pageant’s importance to Atlantic City. The pageant originated in Atlantic City in 1921 and was a mainstay in the resort for decades, especially during its heyday in the 50s and 60s. However, the pageant left the resort in 2005 and was held in other cities for 10 years before returning. When the pageant returned, it negotiated a subsidy with CRDA.

According to the Press, the Miss America Organization and the authority signed its latest three-year deal to keep the pageant in the resort through 2018. Under the contract, the organization was to receive about $11.9 million in casino reinvestment funds over the three years.

“The CRDA finds the reports of the Miss America Organization and the behavior of its leadership troubling,” Christopher Howard, executive director of the CRDA, said in a press release. “The CRDA is working with our legal counsel to undertake an immediate review of its contract with the Miss America Organization and Dick Clark Productions to assess what steps we may need to take.”

Much of the rationale for the subsidy has revolved around the publicity the city receives for hosting the pageant. As part of the contract, the Miss America Organization is required to promote the resort during the opening of the pageant’s ABC telecasts.

Dick Clark Productions also agreed to include a live performance in Atlantic City in its annual “New Year’s Rockin’ Eve” shows through 2019, but no performances from the resort have ever been included in that show.

Gilliam, the resort’s incoming mayor, said the split with Dick Clark Productions should be a deal breaker.

“It’s a great opportunity to pull out of the contract,” Gilliam told the Press. “Now that the television has gone, it’s not what we are paying for. I’m not one of the biggest fans of Miss America, because we don’t get back compared to what we give.”

Even after changes were made to the organization’s board, criticism over whether the pageant lived up to its end of the authority deal continued.

John Palmieri, a former head of CRDA also told the Press that the pageant no longer deserved the reinvestment funds. Palmieri left the authority in 2016 and helped negotiate the Miss America deal two years ago.

“Miss America Organization did very little to market and promote the pageant,” Palmieri told the paper. “They were supposed to do that. They kept coming to us asking us for money.”

Assemblyman Chris Brown said the authority should look at spending its money on events or projects that benefit Atlantic County residents.

“Which is why it doesn’t make sense to keep throwing taxpayer dollars trying to promote the resort through an event whose marketing ability and TV audience gets smaller and smaller each year,” Brown told the Press.