Spaceport CEO Hicks

Talk about a tempest in a teapot. When we heard that Spaceport America CEO Dan Hicks was placed on  "administrative leave" and the reasons were being kept secret, we sent out a call to our Alligators (senior sources) for some insight. We received that as well as a report from the Las Cruces Sun News that reveals that Spaceport Chief Financial Officer Zach De Gregorio has filed a whistleblower complaint against Hicks and has now resigned his position.

The problem? The complaint alleges no criminal wrongdoing--like wiring contracts for buddies or diverting funds--instead it reads like a memo on bureaucratic infighting. It's accompanied by a 14 minute phone call that De Gregorio taped--unbeknownst to Hicks. During the call the CFO pontificates about his supposed right to talk directly to the Spaceport board and Sec. of Economic Development Alicia Keys independent of Hicks. Hicks rationally responds that as CEO he would like to be advised of any such communications.

Secretary Alicia Keyes is a major figure in the power struggle. She is the chair of the Spaceport Board of Directors and obviously in the De Gregorio fan club. MLG adviser Dominc Gabello is also brought up as also in the loop on Spaceport internal affairs.

As the Sun-News reported, the complaint "makes clear no laws or regulations" have been broken. It appears Hicks is on administrative leave because he believes the initials CEO stand for Chief Executive Officer and that he's in charge. Sec. Keyes and the administration seem to want a poodle in the position. Work it out folks, the Spaceport has enough challenges without public bureaucratic battles harming its stature.

Sidebar: De Gregorio has a B.A in cinema from the University of Southern California and has worked in the movie biz. Keyes is the onetime Executive Director of Worldwide Acquisitions for the Walt Disney Company. Interesting. . .

THE SPACEPORT RIGHT NOW

The Keyes-Hicks-De Gregorio kerfuffle did surface something worthwhile--a helpful backgrounder on the Spaceport and where things stand today. Reader George Richmond posed a series of questions that we sent to Brent Eastwood, Ph.D,  political scientist, author, political consultant, intelligence analyst and former director of business advocacy for the state Economic Development Department.  That's a lot of hats and Richmond has a lot of questions.

Richmond: Why aren't the big hitters, Blue Origin and SpaceX, at this center?

Eastwood: Blue Origin and SpaceX launch out of Texas. It is better to launch in Texas because it is closer to the equator. The earth is spinning faster the closer you are to the equator so spaceships get an extra boost on liftoff in Texas. Texas is more business friendly than New Mexico. Also, NASA has been in Houston forever. Texas has more people and thus better human capital than New Mexico. 

Richmond: What is it about Spaceport America that the big hitters do not like?

Eastwood: That's a tough one. New Mexico is not known for space like Texas and Florida. Again, as a small state New Mexico does not have the human capital (aside from LANL and Sandia and New Mexico Tech) that lends itself to producing, recruiting, and retaining scientists and engineers. 

Richmond: And will Spaceport America meet their needs?

Eastwood: The North-South runway at Spaceport America is problematic because in that part of the country, the prevailing winds blow west to east or east to west. This creates crosswise wind shear on takeoff and landing making things more dangerous and risky than necessary. There is not a major airport close to Spaceport. The closest one is in El Paso. There is not a luxury hotel near the Spaceport either. New Mexico State University is not known for aeronautics or aerospace engineering. This makes it more difficult to produce human capital that can make states competitive for space flight. 

Richmond: Can you get Q 1 2020 revenues of Spaceport America? And expenses for the same time period?

Eastwood: You can get numbers from Virgin Galactic because it is publicly traded. In 2019, Virgin Galactic had $3.8 million in revenue and it lost $210.9 million! In the first quarter of 2020, Virgin Galactic had revenue of only $238,000 and lost $60 million! 

Richmond: Who are the five largest clients, in revenues, of Spaceport America?

Eastwood: Spaceport as of July 2020 claims these companies as clients: Virgin Galactic, Boeing, UP Aerospace, EXOS Aerospace, and SpinLaunch. EXOS and SpinLaunch are small startups. UP Aerospace is headquartered in Denver. UP has only done 18 launches at Spaceport since the early days and that's really not many. There are very few days at Spaceport when there is activity or launches. Most days at Spaceport there are no space launches and no activity. I don't know the revenue of those other companies but Virgin Galactic pays Spaceport $1 million a year.

Richmond: How will Virgin Galactic conduct its space flights? Will passengers wear masks? Social distance?

Eastwood: Spaceport on its website says its personnel are working from home. VG is working from home and on site. There was a VG glide test launch in June, but if Spaceport personnel are working from home because of Covid and their CEO is on admin leave, it is difficult to see how there will be regular launches of tourists this year.

Richmond: How about more shooting of TV ads, movies and TV shows at the Spaceport?

Eastwood: I don't agree that TV ads, movies and shows are a viable business model for the Spaceport. You don't build a $250 million movie set in the middle of the desert and then get paid a pittance for commercial shoots. That is just a silly waste.

Richmond: And what states have space operations of any consequence, after FL, CA and TX? Where does NM rank? 

Colorado has a Spaceport. As do Hawaii, Alaska, Virginia, and Alabama. New Mexico Spaceport has just had too many delays. If it could have launched regular flights 10 years or even 5 years ago, it could have scared off the competition. Now there is too much competition.

Delay and hype have been the words most associated with the promising Spaceport in Sierra County. It appears that will hold true at least through this calendar year.

THE BOTTOM LINES

In a first draft Monday we had John Sanchez finishing his tenure as lieutenant governor at the end of 2010. The correct date is the end of 2018.

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(c)NM POLITICS WITH JOE MONAHAN 2020