On March 22, USA Rugby CEO Ross Young informed Congress that COVID-19 has negatively impacted the national governing body’s financial outlook. Although the initial assessment was bleak, the loss of membership dues and philanthropic contributions puts USA Rugby in more of a doomsday scenario.
The pandemic could not have come at a worse time in terms of USA Rugby’s rescue. With rugby activity now on hiatus, it stands to lose more than $1 million in unrealized membership dues, and that deficit increases with the evolutions of the UWS lawsuit as well as charitable donations routing to pandemic-proofing accounts. USA Rugby has taken some austerity measures in the reduction of staff, high performance and contractors, and even with the unexpected savings that come with cancelled regional and national championships, the NGB is now scheduled to go cash negative in April.
World Rugby has already agreed to a $2.5 million loan – which doesn’t need to be paid back until next year and thus not reflected in USA Rugby’s payables. But the coronavirus quotient necessitates an even bigger ask, closer to $4 million, and that’s just to maintain bare operations.
There’s hope for a rugby aficionado who saves the organization with one check, or maybe the stimulus programs coming out of Washington, D.C., might be of use to the 501c3? And maybe the reality calls for declaring bankruptcy and starting all over again.
If USA Rugby were to file for Chapter 7 bankruptcy, then all of its contracts and financial obligations would be erased. And so would USA Rugby. A new organization would have to replace it, install new leadership, and then rebuild trust with its constituency and beyond, Chapter 7 would also mean losing control of the USA 7s teams, as the U.S. Olympic Committee would step in. Outside of that, it will be tough to return to the international stage.
The domestic game already knew that more autonomous days lie ahead, and the sooner USA Rugby makes a decision – fight or flight – the sooner it can deploy measures to ensure the local game is operational going forward.