Today I was thrilled to witness an outstanding display of ‘leading from the front’ by USA Rugby’s CEO, Dan Payne.  I’m writing this only a few hours after the show, and there are already 10,000 views. The session was well conducted on Facebook live and there was plenty of opportunity for guests to enter their questions.  Here were mine:

1. Please comment on why the USAR elite coach (John Mitchell) resides outside USA and literally just flies in for tests/camps/etc… For the amount we pay, and the time we get for that (only 16 weeks, is that true)…wouldn’t he be well used traveling the country evaluating players, talking to teams/coaches, etc.. This ‘celebrity’ coach thing does not appear to be working; its all in the results.

2. Rugby International Marketing (RIM), LLC. – How did this entity come to exist without USAR having a Strategic Plan? Who created it? Who approved it? Why are we selling equity to overseas entities (i.e. selling the future of America’s rugby assets to UK entities at cents on the dollar? – and please don’t say how they bought at a $20MM valuation or whatever RIM’s Chairman says)? What is the performance record of RIM? What is it’s budget? How is the rugby channel performing against budget? Please discuss anything re: RIM.

Here is Payne responding to my question re: the USA Head Coach residing outside the USA. I was delighted with his response and the pressing for our head coach to also assist developing the community and culture of the game in the USA.

Dan Payne responding to my question re: residency of USA level Coaches.

While the rugby community in general should be pleased with Payne’s offerings; the likes of STRAT2020 (i.e. the Strategic Plan) will be issued shortly and creates cause for optimism, and the targeted membership category of the 5-12 age group is great to see.  I am skeptical of the Plan as I would have expected certain rugby/business minds to be brought into the process, but will reserve any judgement for a later date.

I like the ‘Big Two’ concept (who wouldn’t).  Grow the game, Raise Awareness.

However, I would summarize that Payne took a lot of ‘softballs’ and hit them out of the park, but did not (understandably) speak on the more controversial issues like RIM in detail. Payne inherited PRO and RIM, the two albatross’ that may define his tenure, and it is understandable he refrained from in depth discussion.

PRO Rugby

Payne’s ability to keep a straight face in his reply about PRO Rugby’s season’s 2 and 3 was that of a Hollywood performer. “We have a 3 year agreement, and I’m looking forward to the growth and we are excited. Year two should be an add on from year one…hopefully”.  That is a far cry from what we are seeing in the media, but of course in this case Payne must ‘fly the company flag’.

The Rugby Channel (TRC) and Growing the Game

I was surprised Payne contradicted the TRC model of ‘paywall’ by saying, ‘to grow the game, we need to be out in front of the paywall on TV’. I thought this an interesting comment.

I am more concerned with the leadership of our Board and how we have allowed our financial state at USAR to reach this nadir.

$1,000,000 Budgetary Shortfall

Payne discussed a $1MM revenue shortfall we will see in 2017 vs 2016 due to Brexit;  I assume it’s the cratering of the Pound Sterling vs. the US Dollar (i.e. from $1.50 to approx. $1.228 where it sits today), as well as a loss of a grant from World Rugby.

My comment to this is, “It’s business, and we better figure out a way to find that $1MM and more if we want to grow this game”.  What I heard is we have a budgetary shortfall from 2016 to 2017 of over $1MM and it will not be replaced. What I heard is that USAR will be operating with $1MM less in 2017, than it did in 2016.  Is that acceptable?

He discussed the four pillars of revenue stream:

1. Membership dues (I love the youth 5-12 push)
2. USOC Funding
3. Licensing fee from RIM
4. Philanthropy.

Personally, I don’t like to rely on #4 because it is unsustainable and can create resentment among the heavy ‘givers’. I see this every day in my correspondence from the blog replies. The USOC funding ‘is what it is’, and the desire to create organic membership growth to raise revenue is excellent.

RIM – So many unanswered questions

However, what about RIM?  No questions answered about RIM other than USAR obtains a licensing fee each year.  What is this licensing fee, how is the number derived, etc…

(Just now, Payne himself replied to a post on this matter and pointed me to the deepest depths of the USAR website, where I found this):

What are the ways in which USA Rugby Benefits from the Activities of RIM?

What I see here is a paltry licensing fee (just over $1MM/annum).  Point #2 is just words with no action or performance metrics and sounds good, and Point #3 is simply not true. I believe we will be hard pressed to say USA Rugby’s balance sheet is stronger due to RIM.  We all want more money for the sport and apparently based on our new revenue model, the ‘for profit’ RIM is where it should come from, … yet it appears they are being let off the hook with a meagre licensing fee?  How are we going to generate the finances required to grow our sport to be World Class contenders at all levels if we have a self imposed roadblock due to this questionable entity that is RIM.  This does not even beg the question why we are selling equity in RIM to the overseas ‘partners’, mortgaging USAR’s future value, and ultimately limiting future net returns for USAR.

We had a chance to learn some things about RIM today, but while I give Payne an A+ for effort on his performance today, and the transparent gesture… I am disappointed we didn’t hear on some more of the “30,000 feet” stuff.  Great job, regardless and a step in the right direction.

Here are some other articles I’ve written on these topics:

1. USAR Board of Directors: No Plan for 10 years, No Accountability.  Time to go! 
2. PRO Rugby and the Melville/Latham Legacy. It’s not good. USAR Board of Directors needs the Swamp drained.
3. USA Rugby: Professionalism & The Strategic Plan (The most important thing you never cared about)