By breaking its deal through 2012 with the Los Angeles Convention Center, the ESA spent more than $5 million moving E3 from LA to Santa Monica and back to LA.
According to IRS reports obtained by Kotaku, the Entertainment Software Association spent $5,377,808 million to break its contract with the Los Angeles Convention Center to move the show to Santa Monica for 2007, only to move it back to LA the next year.
The decision to move was made by the ESA's board comprised of 19 game industry and ESA member executives.
"I don't think it's a mistake," defended Rich Taylor, Entertainment Software Association senior vice president of communications and research. "There was a model in Santa Monica that we tried and after the event we polled participants across the board about what they thought of it and then we tried to figure out what we could do to make it better and returning to the Los Angeles Convention Center was the right decision."
This expense, labeled an "event cancellation fees" in the ESA's tax filing, is a partial cause for the raise in membership rates last year. Additionally, the move from a "profit generating E3 to a revenue neutral summit" hurt the ESA's profitability and encouraged a bump in membership costs.
"In the past the membership dues here were deflated significantly because of income that was coming from other sources including the summit," Taylor said. "Now we're closer to what other trade associations charge."