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Coronavirus Shutdown Forces USA Rugby Reorg To Speed Up

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Coronavirus Shutdown Forces USA Rugby Reorg To Speed Up

USA Rugby

The Coronavirus outbreak and subsequent sequester of people in the USA and the halting of rugby in the foreseeable future has had a huge and negative impact on USA Rugby and the organization's reorganization plans.

Previously, improving financial news had prompted USA Rugby's Reorganization Task Force to change its timetable, saying that instead of USA Rugby running out of money in March, it had until the end of May to come up with a new way of doing business.

That slightly rosier outlook is out the window. With the halting of rugby due to the coronavirus, USA Rugby is now running out of money faster, and has no prospects of any income through events or additional dues or other fees. In addition, plans to collaborate with various constituencies have had to be adjusted as people aren't allowed to congregate.

Sunday, USA Rugby CEO Ross Young sent a letter to the USA Rugby Congress and to the USA Rugby Board saying that things have to be sped up.

"The immediate loss of revenue from membership dues, and projected reduction in corporate sponsorship and philanthropic funding has placed USAR in an even more difficult financial and operational situation than we envisioned when we started the reorganization process last December. This also significantly changes/increases the figures presented to World Rugby in February."

Added to this is the fact that USA Rugby's lawsuit with United World Sports (the company that ran the USA 7s and CRC) is going to arbitration. That could well lead to significant legal fees for USA Rugby—Young estimated those costs at $250,000.

So, said Young, "USAR can no longer assume it will remain in a cash positive situation until May 2020, as we originally modeled and as presented by the Task Force.  In considering the next steps for USAR, the Board and Congress need a collaborative discussion around a path forward."

So Young and the Board are asking for four members of Congress, one each from youth & high school, college, club, and international athletes, to be names no later than today, March 23, to join the Board in figuring out how to pay the bills going forward.

This is horrible timing for USA Rugby. The Coronavirus shutdown has hit the organization right when it needed a little bit of time to figure out its next steps. But, it could also end up being a catalyst to getting a final plan figured out. USA Rugby is out of money, and out of time, and needs a bailout while it reorganizes into a smaller, leaner body. 

That was the idea all along. Now it has to happen in a matter of days.