Authors note: I have made a number of assertions and assessments in this document. To the best of my knowledge all of them are well grounded. Many of these assessments are made based on personal conversations with numerous USAR Board members, USAR Congress members, and global rugby executives. I have personally reviewed many financial documents of the organization.
American Rugby’s greatest accomplishments are approaching the century mark; most occurring in the amateur era (pre-1995), including Olympic Gold in 1920 and 1924, the founding of USARFU in 1975, and the Women’s World Cup victory in 1991.
Despite the great efforts of many, the Union finds itself wallowing in continued mediocrity; on the field, off the field, and in the boardroom. Nearly 25 years into the professional era, we continue to generate optimism only through eternal faith in our vast resources and potential, which we never seem to realize.
Prior to their nominations, each USA Rugby At-Large Board member possessed little-to-no connection to rugby. In rugby terms, all are amateurs. None are sports executives to any degree (investors maybe, but certainly not sports executives toiling in the battles of sponsorship acquisition or running a successful/sustainable/winning organization), nor have they shown commercial acumen to successfully grow and monetize Rugby in the United States.
In the attempt to move USA Rugby into the professional era, the USAR Board made a bold move creating RIM and self-admittedly did little-to-no due diligence regarding requirements for such a ‘for profit’ entity. The off shoot of RIM – the oft-maligned The Rugby Channel – has gone through three different content models and visions in the past two years. The recent 40% increase in subscription fees will not fend off inevitable failure.
RIM was formed, and The Rugby Channel followed. Recent financial results show the extent of the disaster. In In 2016 The Rugby Channel’s expenses exceeded revenues by a factor of 10.
- The USAR Board and RIM Board have usurped financial accountability from the USAR CEO, but not the fiscal responsibility. The RIM CEO’s current compensation exceeds the USAR CEO by >$150,000, a clear indicator of the USAR Board’s priority for RIM.
- USAR has been mismanaged in the past decade to the point where the non-profit status could be jeopardized including significant tax fines and penalties if audited.
- USAR and RIM financials will show mounting and increased cumulative losses in the millions of dollars. These losses are currently underwritten by the kind investment of those entities overseas (England Rugby, Global sports entertainment group CSM, etc..) who ‘wanted to dip a toe in the American market’ with an investment in RIM.
- The 10-year licensing agreement ‘negotiated’ by RIM with USAR allows continued poor financial results at RIM to hamstring the success of USAR in fulfilling its mission. If RIM continues in any form, these figures must be renegotiated in favor of USAR. The question of who was negotiating on behalf of USA Rugby when this agreement was signed has gone unanswered for several years.
- USAR was awarded the RWC 2018 Sevens tournament. There was no bid process for the ultimate location; San Francisco (one of the most expensive venues in the country to host such an event) was unilaterally chosen despite USAR’s Board getting numerous requests from various entities to host the tournament. The USAR Chair’s financial interest in ATT Park is noted. Current estimates advise that a sellout of the event does not guarantee profitability.
- Global sponsors avoid USAR. Literally, and figuratively.
Those ‘in the know’ can only recognize the void of leadership and vision demonstrated by the likes of the current Chairs of USAR and RIM, and the level of desperation with which they operate.
- The current business standards and practices at USAR and RIM are far below those of top tier rugby nations, which have well thought out and vetted strategic plans, timelines, and metrics to gauge performance.
- The RIM CEO and USAR CEO have no direct responsibility for the others’ success, and no unified leadership to ensure that both do succeed.
- The USAR CEO is completely hamstrung to effect financial change in his organization. He would not challenge this assessment.
- The financial mismanagement is closely defended by the last vestiges of those who have been attendant for so long and are now complicit in it.
Actions must be taken to dissolve RIM and completely recreate USAR: There must be ONE person whom is ultimately responsible for the success/failure of the organization. That is the USAR CEO. He does not have that responsibility now.
USA Rugby has operated as amateur entity in a professional world for too long.
- RIM has failed to produce a commercial platform (in relation to its primary shareholder, USAR), has no vetted business plan, and has chosen a ‘damn the torpedoes’ stance continuing its Rugby Channel efforts.
- The composition of the USAR Congress and its responsibility creates significant challenges. There are members of Congress voting on very important matters (i.e., ratifying RIM and the PRO Rugby sanctioning agreement several years ago) who literally have no knowledge of the subject matter they were asked to vote on, and frankly many who do not have the time or willingness to care. All very committed, well-intentioned people – but for the most part hobbyists being asked to perform like professionals.
- The USAR bylaws require an annual operations plan, budget, and annual business plan – none of which exist in any meaningful capacity.
- Despite assertions by both Chairmen, the idea that RIM and SUM (Soccer United Marketing) are analogous at any level is absurd. This myth must be debunked. SUM is a ‘for profit’ supporting a ‘for profit’ League (i.e., MLS). RIM is a ‘for profit’ supporting a ‘not for profit’ (i.e., USAR). The disparity between the two entities is enormous. It is nothing short of arrogant to say otherwise.
- Give the ‘investors’ back whatever can be salvaged to avoid total embarrassment.
The current state of affairs in the management of the fastest growing sport in the most financially abundant nation in the world is not acceptable. For American Rugby to achieve anything close to the potential all participants know is present (and the rest of the world envies) we must correct the poor decisions of the past.
Our limited recent successes on the field (Men’s 7s, Women’s WRWC), have only been made possible by the generosity of certain benefactors literally funding the teams. Any success on the field cannot be sustained without effective financial management, revenue management, etc. off the field. Sustainable success is not possible if these donors don’t show up one day.
USAR CEO Payne was considered an optimistic replacement for his predecessor. He freely admits his limited knowledge of/effect on RIM. He knows he cannot succeed in this structure.
He should be held responsible by Congress to propose a new, overhauled structure for USA Rugby. It should ensure the CEO is responsible 100% for the financial performance of the organization. They should completely overhaul the Board of Directors and focus on members with a commercial vision of the game and how that vision can be implemented/executed in the United States – the fastest growing sport in the financial capital of the free world. As our players and teams strive to be World Class and participate competitively in the professional era, so too must our leadership and Board.
Other articles I have written on this topic