USA Rugby CEO ‘Light’. Dan Payne an excellent choice; should we be more concerned with David Sternberg at RIM? 7

Dan Payne is an outstanding choice for the newly minted job description created for the CEO of USA Rugby.  He most recently served as Athletic Director at Life University and has participated at elite levels in multiple sports both on and off the field.  Life is a small school; but the growth, commitment to excellence, and the creation of ‘community’ at Life is a testament to many of Dan’s skills that won’t appear on his resume.  If you had witnessed the incredible fan base and alumni support for the Life teams at the recent CRC 7’s championship in Philadelphia, you’d understand the ‘community’ component Dan is capable of bringing.

Personally, I like that he will bring his own unique ‘American Rugby’ experience to the job from his time playing, coaching, and administering. A champion wrestling mind combined with his rugby mentality will show the character required to chart some testy waters that lie ahead.

I concur with the vast majority of Pat Clifton’s, “Cliff Notes: Reaction to Dan Payne’s Hire” published in Rugby Today on July 6.  I like that Payne is American, and has represented the elite level both on and off the pitch and has shown clear commitment to rugby in America.  Unlike his predecessor, he won’t be searching for a bigger, better job any time soon.

Dan also happens to be a good guy.  He clearly understands coalition building and working in/around organizations.  People might criticize his lack of prior senior level corporate/executive and financial experience, but I personally love the ‘intangibles’ he will bring to this post. Collaborating with various support agencies (ranging from Strategic Planning group to the USAR Board of Directors, etc…) and personnel will be a strength for Payne, his list of people offering assistance will be long.

Here’s what Dom Budzisz said about Payne in his weekly letter to his military rugby distribution list: “Best move USA Rugby has made in 20 years is hiring Dan Payne…he will be the working man’s CEO…total blue collar ethics”.   This is the ultimate complement we could pay Payne, but it does bring up the question – what about the white collar part of the job (sponsorship, fund raising, media, event mgmt., etc..)?  This is where RIM comes in.

Payne is the Good News; The reduced role of the USAR CEO is not so good

It is the reduced job descriptions in the new CEO job that should concern all stakeholders in American Rugby.  As CEO, Payne will be responsible for the conduct of operations of the USA Rugby Union and all it’s relative programs.  However, this job does not include responsibility for any of the revenue streams that will be required to fund USA Rugby’s programs (from youth all the way to the elite National Teams). This is a significant change from the post that Nigel Melville created.  The responsibility for the revenue to drive all of USA Rugby’s program’s now resides with the ‘for profit’ Rugby International Marketing (RIM), LLC.   USA Rugby (a non profit) owns a majority share in RIM.  RIM was created as the revenue driver for USA Rugby, but does act at ‘arms length’ from USAR and is separately operated and managed.  RIM and USA Rugby share three common board members on both of their respective boards.  RIM was created by immediate past USAR CEO Nigel Melville and various members of the USA Rugby Board.

History: USA Rugby and RIM

A short history lesson will help explain the current scenario.  In late 2006, John Kirwan was imminently going to accept the position of Executive Director of USA Rugby. Kirwan unexpectedly pulled his name from consideration, and a quick decision was made by the USAR nominating committee that Nigel Melville would combine the original role he was hired for as ‘Director of Rugby’ for USA Rugby with the Executive Director position to form the position of CEO of USA Rugby. Melville held this role for over 9 years.  In 2014-15, RIM was created and Melville was slotted to take over the CEO position at RIM after he was slated to step down from the USAR CEO job in mid 2016.  Subsequently, Melville has accepted the job of Director of Professional Rugby at the RFU– a position allowing him to return home to the UK and fulfilling the dream he has seemingly chased since coming over to the USA.  As Melville abandoned the RIM CEO job created for him and left both positions prior to planned dates, a new hiring process started in April-May 2016, and David Sternberg was named as the RIM’s CEO. Chad Keck (a USAR Board Member) serves as RIM’s Chairman.

In short, Dan Payne will have all the accountability for USA Rugby – the results of the National Teams performances and the implementation and administration of all the various programs.  He will also be accountable, but not responsible for generating, the revenue to drive the programs. The newly diminished role of USA Rugby CEO means he will have no direct impact on the revenue piece.  This has been left 100% to RIM.   In essence, if USAR constructs a budget that relies on revenue generation funded solely by distributions from RIM, the new CEO seemingly has zero control over his own success or failure.  Money, the primary driver of opportunity and success, must come from RIM’s revenue streams (i.e., sponsorship, events, The Rugby Channel, etc..).  RIM is a completely separate entity out of the command and control structure of USA Rugby.

USA Rugby is the only union in the top 20 nations that have such a ‘separate’ organization structure (I.e., USA Rugby and RIM). This is in no way a “time-tested” model.  While I laud the efforts to create a new and innovative entity,  the organizational structure offers significant openings for dysfunction at a massive level. If RIM does not hit their revenue requirements, the USAR CEO is completely hamstrung and has little to no input to effect change regarding the financial piece.

With the Dan Payne hiring as USAR CEO, we have a scenario where Payne will 100% rely on Sternberg’s entity (RIM) to finance all of the programs he must steward at USA Rugby.   The relationship between RIM and USAR has the potential for severe dysfunction, and it is surprising that we are asking our CEO at USA Rugby to be dependent on a completely separate organization (I.e. RIM) as it’s sole revenue stream.

So, while Dan Payne is an outstanding choice as USA Rugby’s CEO, we should all realize that this is a significantly downsized position from the one Melville held (I.e. Payne has no financial, sponsorship, media responsibility – that is left to RIM).

The Strategic Plan (Ever more important!!)

The Strategic Plan (led by George Henderson, and now involving a group of over 50 people) for USA Rugby is reaching it’s final stages.  We could debate whether the new CEO should have been named prior to this Strategic Plan being so far down the track, and we can only hope Payne is on board with the direction and specifics as indicated in the not yet published plan.  It will be interesting to see if entities such as RIM and PRO Rugby are considered ‘final’ or are the various relationships subject to change with the new leadership.

Some unanswered questions:

  • Has Payne been involved in the Strategic Planning process?
  • Will he buy in immediately?
  • Will he work to amend the plan if he has significant disagreement?
  •  Is RIM and it’s strange and unique relationship to USAR automatically accepted and encourage in the plan?
  • What does Payne think about RIM and his dependence on this entity as USAR’s CEO?

The possibility lies for tremendous success if all the actors ‘perform’. However, the USAR/RIM relationship has a rugby sized field of landmines to navigate.   What if RIM can’t perform on it’s mission?  Payne and USAR will be hamstrung with no way to effect change through the organizational structure.  Payne will have no authority over RIM, it’s operations, or it’s personnel.

USA Rugby CEO “Light”

So, for the new USA Rugby CEO job description – we all should be delighted with the selection of Dan Payne. His ‘lack’ of business, sponsorship, media experience is expected to be offset by the new responsibilities of RIM and it’s leadership.  I would have liked to see Payne (or any CEO selection) run the whole show, that is what CEO’s are supposed to do.  It would be interesting to see what Payne would do with all these arrows in his quiver, but for now he will have to rely on others.

However, we should not be lauding only the selection of Dan Payne as USAR CEO (an excellent choice regardless of job description). We should be exploring David Sternberg’s selection as RIM’s CEO last month, as this appears just as valuable a position for USA Rugby’s success.. The working relationship between Payne and Sternberg will be vital.

I have been nominated for a seat on the USA Rugby Board of Directors. These are my thoughts and I would welcome an opportunity to participate in the leadership of USA Rugby.

 

7 comments

  1. Agreed that Dan Payne is a great choice for USA Rugby CEO. However, a few points to note: 1. While USA Rugby and RIM are set up differently from other rugby nations, the separation (or spin off) of a for-profit is quite common and has been time tested within other US based nonprofit organizations. USA Rugby is not entering into no man’s land here. 2. True, Dan will not have direct oversight on RIM’s revenue generation, but USA Rugby is the primary shareholder (which absolutely has oversight) and Dan still controls membership, which provides funding for USA Rugby’s programs. 3. USA Rugby Trust is the philanthropic arm of USA Rugby and oversees all of its fundraising revenue, so there are two distinct revenue streams not controlled by RIM.

  2. All relationships are a potential landmine. The trick is aligning the goals of both. So, RIM is a professional sales organization which basically takes a commission equal to their stake in this entity. If there are also realistic targets I can only see a major step forward. If RIM fails there will be other sales organizations wanting an opportunity. Sadly, mediocre Melville never really developed a product to sell. Yes ‘blah blah’ he ‘resided’ over an organization that increased from ‘x’ to ‘y’ in revenue.You have to read his bio to appreciate the corporate speak and how he is almost made to seem competent. I would suggest that with a majority ownership in RIM, USAR definitely has input and command of the potential revenue stream. Not least of which is the ultimate sanction of firing them. One could write an essay on how the parts should work together. Let us hope these systems have not been developed by amateurs unfamiliar with fundraising and sales. If only we had established this type of structure 15 yrs ago when Melville first came on the scene. By now we would have a healthy relationship that benefits both entities. It must be a 2-5yr plan. I have been beating my head against a wall for years trying to get clubs and local unions to start thinking professionally by offering a commission to those bringing in sponsors and even paying a co-ordinator a small stipend with a back end commission.

  3. BTW. I hope you get a seat on the board and continue to push this debate and rugby in USA forward. Please don’t become another ‘yes man’. The tenor of this article suggests you may be going soft on us.

  4. I have witnessed Dan Payne’s work at LIfe U first hand. He is an outstanding man and administrator. He and his coaches in all sports have transformed that University. Rugby has become a very popular sport in the Atlanta area partly due to Life’s rugby performance. One thing I would like to see is some type of contract with ESPN for rugby to get more attention on the national stage. I am new to rugby through my daughter playing at Life. It is a great sport and I know people would watch it if given the chance.

  5. Pingback: USAR Board of Directors: No Plan for 10 years, No Accountability.  Time to go!  « Tony Ridnell

  6. Pingback: On USA Eagles 29 – Uruguay 23. Some thoughts from ‘Off the Field’. « Tony Ridnell

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