Miscategorizing Costs
Miscategorizing Costs
USA Rugby assigns costs to three bodies: USA Rugby, USA Rugby Partners, and High Performance.
It makes sense, of course, that those in the High Performance department, along with national team expenses, would fall under High Performance.
USA Rugby Partners is the for-profit arm of USA rugby (what used to be called RIM), and income from sponsorships over $25,000 credits to that organization, while events and broadcast rights also are handled by USARP.
OK, that seems straightforward … except that when USA Rugby puts on a domestic championship event, the bookkeeping basically charges USA Rugby for all the expenses, and only records a small amount of income (we’re pretty sure just the gate and maybe concessions). So USARP doesn’t pay the other side of the organization, USA Rugby, for signage shown at national championships, or a portion of the broadcast rights. USA Rugby absorbs the loss, and USARP gets to take credit for the income.
In HP, there are subtle little shifts, mostly in payroll. USA Rugby CEO Ross Young’s salary is mostly charged to USA because, the argument is, he spends most of his time on USA Rugby domestic issues. This is unlikely to be correct. Young’s activities are heavily related to international rugby and to major business and union partnerships. He isn’t involved in the college game or eligibility or youth pathways.
But most of Young’s salary is charged to USA Rugby (read—membership dues). There is a gray area related to where you allocate costs, but the gray area isn’t at 70-80%, it’s 10-50%.
The same for CFO Eric Gleason (whose major headaches have come from the national teams, not community rugby).
The USA Rugby Communications staff is the best the organization has ever had. They do a fine job, but that doesn’t mean they don’t get wrapped up in this. There’s a position in communications directly related to High Performance rugby. And yet, it’s not high performance dollars that pay for that salary; it’s USA Rugby membership dollars. It’s not a lot of money in the grand scheme of things, but it starts to add up.
As much as $1 million in USA Rugby costs should actually be attributed to either High Performance or USA Rugby Partners.
Solution
When HP is separated out, their problems become their problems. Funding from the USOPC, World Rugby, Golden Eagles, international events, a small percentage of membership dues (maybe as much as $250,000, but not more than that), sponsorship, and rights fees should cover all national teams, and major events. No more than 20% of the CEO and CFO salaries should be covered by member dues. National office staff cut significantly. Training and Education funds itself.
And ... if USARP sells a sponsorship deal that includes major domestic events, then they have to pay the College, Club, or HS events a portion of that deal to have those ad banners or branding efforts fulfilled.