Letter to USAR Congress on USA Rugby Re-Org / COVID Crisis
- Mar 24,2020
To: USAR Congress
On Behalf of: Board of Directors, National Office, Restructuring Task Force
Re: USA Rugby - Re-org / COVID / Crisis Update
Date: March 22, 2020
Dear Members of Congress,
As we all know, USAR has been going through a process of fiscal and structural reorganization. Our timeline for this work (December 2019 to May 2020) was originally determined by our projection, that with no change, cash flow would run out at the end of May 2020. The Board and National Office enacted timetables for producing cash flow reports for the Board, stronger fiscal controls, and set up the Reorganization Task Force.
Our goals were to work in a collaborative way with the rugby community, giving the Board a more representative input from the grassroots, and develop a plan for financial and operational sustainability.
In March 2020, USAR received provisional approval from World Rugby for short- and potential long-term financial support and investment, contingent on implementing our proposed plan for sustainability and staged reorganization to improve overall governance.
However, the rapidly unfolding consequences of COVID-19 are having a world-wide impact, not just within Rugby but including American society and sports in general.
- Rugby in the US has been postponed for the foreseeable future, with no perceived activity through May 2020 at the minimum.
- International cross/border rugby has been cancelled for the time being.
- There is growing pressure on the IOC to reschedule the Summer Olympics.
Last week, USAR modeled the financial impact while maintaining our responsibility to contain the spread of the COVID-19 virus and implement safety measures. 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.
Additionally, 2 days ago, USAR was given notice United World Sports intention to pursue arbitration in their suit against USAR, which has projected costs to USAR of $250,000 for legal representation/defense.
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.
USAR is facing critical decisions that need to be made in the next days, not weeks. The by-laws for USAR require that Congress members vote to approve or reject matters outside the 'ordinary course of business.' The decisions that have to be contemplated in this current context are likely going to take us outside of the ‘ordinary course of business.’ The Board and National Office are looking to Congress to remain fully informed and participate in these deliberations.
We are asking for urgent action from Congress to appoint one Congress member from each of the four rugby communities (youth & high school, college, club and international athletes) no later than 12:00pm Mountain Time on Monday, March 23 . Those designees would then join the board in discussing the current financial situation and all of the options for moving forward as an organization. Each of those members would inform and deliberate with their respective communities.
Please communicate within your constituency groups and advise us as soon as possible of your nominated individual so you can be fully included in this crucial decision-making process. We have several calls and consultations potentially starting as early as Monday afternoon that should include where possible those Congress nominated individuals.
The COVID-19 pandemic is a huge, new crisis that is affecting all of America and most rugby unions around the globe. We feel that working together we will find the best and most suitable path forward for rugby in the USA given all the elements in play.
Thank you for your immediate attention and consideration.
CEO, USA Rugby