USA Swimming Operated at Nearly $1.5 Million Deficit in 2018

The April 2019 USA Swimming Board of Directors (BOD) meeting minutes reveal the organizations final audited 2018 accounting, as well as budgets for 2019. In reflection of last year, the financial statements reveal that the 2018 operating revenue of $36.1 million, which was $1.7 million short of budget. Expenses totaled $37.5 million and were 823,273 better than budgeted, and in total, the organization operated at a $1.45 million deficit in 2018 – almost a million dollars worse than estimated.

Among the major drivers of the undershoot on the expenses side was a $1 million overhead in “rent and lease expenses” for the year; some off-setting savings in categories like Television and Video production (almost $800k) helped though, but big revenue shortfalls in membership ($616,855 less than budgeted) and partnership marketing revenue ($1.3 million less than budgeted) resulted in the big net loss.

Savings on the National Team side came primarily from the National Junior Team having fewer events than originally budgeted. Also, by not staging a multi-day National Team vs. NCAA competition as they did in 2016 with USA vs. B1G and in 2017 with USA vs. Pac-12, National Team savings increased by another $82,150, which would have presumably been used to pay for National Team travel and lodging expenses. Events & Member Services also reveals a savings of $178,900 due to the omission of the National Team vs. NCAA meet, for a total of roughly a quarter-of-a-million in expenses off the books.

Year-over-year, 2017, 2018, and 2019 all show increases in revenue from USA Swimming’s partnership with the United States Olympic Committee (USOC), as well as from investment income and membership. Membership, however, did not reach the 2018 projected goal of $23.4 million, falling short at $22.8 million. That number was still an increase of $300,000 from the $22.4 million take in 2017.

Funding from the USOC, on the other hand, was $200,200 more than anticipated.

Partnership marketing suffered in 2018 as USA Swimming was between deals with Marriott, though the two organizations signed a new multi-year partnership in 2019. Chobani, however, did not renew, taking a $150,000 sponsorship with it.

Expenses under Events & Member Services have steadily gone down from 2017 to 2019. This could be attributed in part to USA Swimming’s new model for hosting the Pro Swim Series. In the past, USA Swimming paid cities a hosting fee for staging one of the multi-day professional competitions. In 2019, under the new structure, cities interested in hosting a leg of the Pro Swim Series had to submit a Request-For-Proposal (RFP) to USA Swimming and pay for the rights to host the meet.

Total payroll and benefits sums have also been up-and-down for USA Swimming. 2017 payroll totaled $11.68; 2018 showed a decline of over $300,000 to $11.36 million as several prominent names left the USA Swimming headquarters staff; in the first quarter of 2019, USA Swimming has budgeted $12.18 million for payroll and benefits, however, indicating that they expect to spend the prior-year’s savings. USA Swimming says that restructuring led to significant severance costs in 2018, or they would have likely been well under budget (which they missed by about ($100k)

Other highlights of the 2018 financial statements include:

  • $176,490 first-quarter revenue from USA Swimming’s new Flex Membership
  • $1,123,181 major gifts/grants exceeded $850,000 budget by $273,181 or 32%
  • $830,000 sponsor support including $625,000 from Phillips 66 (5-year renewal beginning 2019). Missed budget by $70,000 of which $50,000 was budgeted from Marriott
  • $361,920 in Swim-a-Thon receipts missed annual budget of $400,000, but were up $6,514 or 1.8% from 2017
  • $783,600 in National Team grants (most in history) including $623,600 from endowments, $100,000 from Phillips 66, and $60,000 from other donors
  • $701,591 in USA Swimming Foundation grants to Make a Splash local partners – $206,854 more than 2017 and most in history.

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Meeeeee

Article states a drop in USA membership. Was there a real drop or did they overestimate the increase in their budget? I’m thinking the latter based on the planned membership dollar amount increase. If there is a real drop then raising the fees is the last thing you’d want to do because fewer will be able to pay. They may be shooting themselves in the foot with higher fees.

Widebody

Part of that drop in membership income was likely the result of members who previously held full membership but opted for Flex membership.

Coach

The flex membership was created because of the decrease in 10 & under numbers and a less than anticipated Olympic bump. Unfortunately the majority of people in Colorado Springs (and the Board of Directors) are out of touch with the grassroots system.

KST

I think the numbers quoted were approx 10% drop in membership. I think that includes flex.

tallswimmer

I think one clarification that would be important for your readers is that USA Swimming budgets on a Quad cycle, so that the net $ over each Olympic Quadrennium runs in the black. Olympic years provide a big boost to revenue from both sponsors and the USOC, and have shown the ability to boost membership #’s in the year following. So saying they’re $1.5M in the red this year is a bit inconsequential to the overall health of the orginization

This is partially true – however, missing their budget by almost a million dollars is fairly consequential.

Greg Brance

For me the percentage of missing a budget number as compared to the overall budget is more important than overall number. The revenue was about 5% lower than budgeted. I know it isn’t as headline grabbing as Million+ dollars but realistically that is what happened.

Taa

A miss on the revenue side is pretty worrisome to me. How come golf is so boring but pro golfers are all millionaires? The only other numbers I am really interested in is the salaries of all the highly paid people. I guess we can wait for the 990 to be made public and we will know.

Green Eyeshade

We don’t need to wait for the 990 to know that salaries and wages plus professional fees and honoraria totaled more than $12 million, while membership revenue was $22.48 million. So, essentially, half of membership revenue is going to salaries. Also, it makes no sense to pay Foundation personnel over a half million dollars per year when you are only distributing out about $700,000 per year. The fundraisers should be volunteers or very low salaried. Meanwhile, direct athlete support is just $3 million, equal to only 25% of the organization’s salaries and only 14% of membership revenues. Why would you want to put your kid into a sport where the athletes are supported 25 cents on the dollar compared to… Read more »

Taa

I still want the specifics. I dont want a handful of people being paid big bucks for doing essentially nothing to advance our sport. They are just baby sitting the organization in my opinion…and dodging any meaningful implementation of Safesport.

Oh my

Move it. Bring it to DC area. I’ll turn it around.

Swim Dad

You’re right on point there. Implimentation means getting rid of unruly and psychopathic coaches.

James Ash

We need more brand new and beautiful swimming complexes in places other than Clovis to do that. No knock on Clovis. Very nice people there. Other than Devin Nunes. But I like his cow. 😉

Daboss

Salaries is one thing. I would be more interested in bonuses paid in a deficit year!

Taa

Good comment. Also what were the criteria used in determining the bonuses? Honestly I don’t see how someone could earn a bonus with this organization. Whoever came up with the Flex membership thing may need a paycut. Its like a government job so why would they be eligible for a bonus.

JJ Graham

Tucked in on the last sentence was the “severance” which was stated as the cause of the deficit. So some got a huge payday to go away. Doesn’t sound like smart management to me.

About Reid Carlson

Reid Carlson

Reid Carlson originally hails from Clay Center, Kansas, where he began swimming at age six.  At age 14 he began swimming club year-round and later with his high school team, making state all four years.  He was fortunate enough to draw the attention of Kalamazoo College where he went on to …

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