May 15, 2020 by Charlie Eisenhood in Interview with 0 comments
On this week’s episode of the Deep Look podcast, Keith Raynor and I interviewed USA Ultimate CEO Tom Crawford about the latest at the organization, the coronavirus pandemic and its financial impact, and the future of the sport. Here is a transcribed version of the interview, lightly edited for clarity.
Joining us now on Deep Look is the CEO of USA Ultimate Tom Crawford. Tom, welcome back to the program.
Thanks very much for having me, Charlie and Keith. Good to talk to you guys.
Yeah, it’s great to hear from you. I know this is not the finest of circumstances for a time to come on for an interview. First and foremost, how are you doing personally — and your family — as we all try to sit out and stay home during this pandemic?
Thanks for asking, Charlie. We’re doing fine. We are working from home. Have been for quite a while, as has the team at USA Ultimate, very happy to say that so far, so good on the health side. And we’re being very cautious. And we’ll continue to until we learn a lot more. So I appreciate you asking. We’re doing good. So far, so good. Across the entire staff. We’ve had no sickness. We’ve had no even direct family contact sickness.
Can’t say that’s true for a bunch of my family and friends back east. There’s been some really sad stories and death and other things there. But in terms of immediate, it’s been so far, so good. So thanks for asking. And I hope that’s also true for you and Keith.
Yes we’re luckily doing okay. Thanks for asking. So USA Ultimate’s in the midst of a membership drive. This is obviously a tough time for organizations and businesses of all types across all industries right now. Given that USAU is a membership driven organization, and that we may be facing an extended time without national programming and ultimate being played, how are things looking financially for USAU? And how is the membership drive going so far?
Yeah. Thanks for bringing up the membership drive because it’s extremely important for our health as an organization. We are very challenged on the revenue side right now, as are all amateur sports organizations and national governing bodies. Everybody’s in the same predicament. So that membership drive is extremely important to us. And so far, so good on that. And we really appreciate the help that we’ve gotten from the community. If you’ve been following some of the quick little vignettes and videos we’re posting from members of our community who have reached out to help, we are incredibly appreciative of that. And I do think it’s really helping. I think people are trying their best. I mean, there’s probably a whole big chunk of our community that is also really struggling financially, just personally with the up to 20, 25% unemployment. It is just crushing so many people.
So anybody that can afford to help, we tried to put together a really attractive package of incentives and discounts. One was extraordinarily popular. The lifetime offering sold out in under three hours. So we will probably come back out before we’re done with another different looking lifetime, one not quite exactly the same as that. We’re still noodling that right now.
We’re getting a lot of emails and requests, and our member support department is working really hard with individuals to literally manually go into their membership accounts and try to work with them on the best way to take advantage of the discounts.
So a lot of activity around that. I think it’s going well. First day was great. We were really excited on day one, and as is often the case with these drives, slowing down a bit so we’re going to try to put some catalysts out into the community to get it reignited a little bit before we close it down. That’s a really important push for us to get through the year in a healthy way. So, thanks. Thanks for asking about it. I don’t know whether you want me to just keep going and you want to ask more followup questions on, on the financial picture.
Has the organization received any help from government institutions, whether it’s federal or state, loans or grants, anything like that?
Happy to say yes, Keith. We did. We got really ready for the SBA loan program. The SBA payroll protection loan program. We have a very good relationship, fortunately, with our bank. And we have a good long time history with them, with really good credit, very good relationship. And so we reached out early, as soon as we learned about that program and made sure we sort of “got in line” right away, and then probably drove them a little crazy leading up to the passage of the legislation. We probably pinged them twice a day. I would do some; Julia [Echterhoff Lee] would do some, just to keep us kind of at the front of the line. And then we had everything ready to go. We participated in a bunch of webinars across the industry that we were fortunate to get plugged into through the US Olympic and Paralympic Committee (USOPC) that allowed us to be really ready.
So we had our finger on the go button the minute the legislation passed and our bank said, ‘We are ready to start processing loans.’ I would guess we had to be in the first 50 people to hit the go button. And so, yes, we were lucky and we got a good one that has really helped us and will continue to help us for another couple of months.
Have you had to make other payroll adjustments or cut salaries at all because of this?
Yes, we have. We’ve cut 20% of the staff, but we were fortunate to be able to do that mostly, not entirely — and it’s always painful, this is really super hard stuff — but a lot of it we were able to do through attrition. So we’ve cut the staff by 20%. And as a result of the PPP loan and a bunch of really mixed advice that we’ve been getting about that loan, we have not done anything else, and we’re not going to do anything else until we get through the loan period.
I don’t know if you guys are following this at all, but there’s just total mixed advice coming out — the whole key to these loans is most of it gets forgiven. And so it’s really a grant, not a loan. And we’ve been on a bunch of calls with attorneys and community development experts and banking experts all saying different things about how it’s gonna work. And the SBA keeps changing their guidance on exactly how it’s gonna work. So the advice that we’re following is to just play it safe. And we are using the loan almost entirely for payroll and rent. And all of the categories that the loan outlined that it had to be used for.
And we’re gonna wait until we get to the end of that, see what kind of forgiveness we end up getting, see how this membership drive goes.
We’ve been doing a lot of financial modeling. We did a bunch with the board that was, you know, based on a whole different set of scenarios.
As the year played out — return to play July, return to play August, return to play September — modifying the numbers all along the way and then a worst case scenario. So we’ve done a ton of work on this where we feel like we’re in a really good place to constantly stay nimble as we go forward.
And that’s what we plan on doing. We’re going to stay nimble. We are in a fortunate position relative to many of the other NGBs. I’ve had a window into how everybody’s doing through a bunch of surveys and focus groups and other things that I’ve been participating in. And you know, we worked really hard for many years to follow best practices and build an operating reserve that’s literally built into how we run the business every year. And that’s going to pay off, because of being really disciplined and having a really supportive board that’s understood the, the need to run the organization the right way as a 501c3 and within all of the best practice guidelines we get.
So relative to other sports, I think we’re going to be in pretty good shape. However, we are in total cost-saving mode: it’s painful, it’s extremely painful. We recognize that we’re going to have significant revenue shortfalls and are managing as best we can to get through this period.
Like everybody, we sort of wait and see kinda what happens.
Here’s the way that I have decided to think about this based on a ton of conversations that I’ve had: we are in a period where we have to let the science catch up to the virus, and I think it will — and a lot of people that I’ve been talking to think it will.
Everybody’s been in total emergency mode, right? Trying to save people’s lives and build out our health care system, which was not designed for the pandemic and all the other stuff.
In the meantime, behind the scenes, there’s a ton of scientists that are working on therapies, prevention tools , all kinds of stuff that we haven’t heard about yet, but we know that it’s going on. Sort of where I’ve landed is my responsibility to USA Ultimate is to keep the organization healthy. We have a ton of activity going on with the staff, developing some pretty creative stuff that we hope to be sort of bringing out soon. That we think people are really gonna enjoy, that will allow people to not play ultimate the way we’re used to playing it but maybe play it a little bit, play it safely, develop skills, do some other things, and just stay healthy as an organization and be ready to hit the go button big time when it’s safe to do so.
But in the meantime, we gotta hang in there and let the science catch up to the virus.
Obviously nobody knows exactly when we’re going to be able to get back to competition. You’re starting to see the inkling of some individual sports coming back. People in some states are able to play tennis again, are able to play disc golf, there was a UFC fight this past weekend, the first relatively major sport to put on an event. No spectators or anything like that. But team sports are a different game. And team sports that are not in a professional league setting are maybe even another step different. So what organizations are you looking to for guidance on how and when to restart?
Obviously this is not something that USA Ultimate will just determine on its own. So what are you looking at for setting a plan when the time comes?
Yeah, it’s going to be tricky for us as a team sport. Particularly, you know, a team sport with a lot of fairly close contact and sharing of a “tool or device” puts us in a pretty high risk category.
I’ve been really fortunate, based on my network. I was asked to chair a task force for team sports, particularly outdoor team sports. So I’m leading a task force right now that includes us and lacrosse and football and field hockey and cricket and basketball and a bunch of sports.
And we’re fortunate to have the input of some really smart people that are sort of helping everybody. Figure out how to modify their sports and design phases for coming back. And I think we’re going to combine our work with the work of the CDC. So just before I jumped on with you guys, I was on another webinar that the Aspen Institute put on that included an expert from the CDC.
And we’ve kind of all been waiting for this, and we knew that it was coming and now it sounds like it’s coming really soon. But they’re about to come out with a return to play guide that we’ve sort of all been waiting for, that I think will shape a lot of our best practices going forward for ultimate, and it’ll be aligned really closely with the other sort of outdoor team sports.
So it’s sort of a blend, Charlie, of this task force that I’m working on, some of the USOPC guidelines that have come out. And then I think we’re all waiting for the CDC guidelines because obviously everybody’s going to want to fall in line with them as much as possible because they’ve got a bunch of smart people working on them.
And there’s a very specific task force at the CDC — we just learned this in the last hour — that is very focused on youth sports, in particular amateur sports. So it’ll be interesting to see. I’m pretty sure it’s going to be a phased approach, just like we saw come out of the administration, you know, phase one, phase two, phase three, phase four. Same thing that came out of the USOPC, if you saw that guidance.
So it’s a blend of how to make these decisions, I think.
Have these conversations altered your optimism or hopes for returning to play in this calendar year? Or is everything just still too up in the air?
I think it’s still too up in the air. Like I said, we got to let the science catch the virus, and if they do and they find some things that can, let’s say, prevent death or even severe illness. And it turns out that you can treat the coronavirus the way you can treat other respiratory — or obviously now it’s getting so complicated, it’s not even just respiratory anymore. They can’t figure this virus out, which is part of the problem. But if they can figure out some therapeutic things that I know they’re working on, because we’ve heard that there’s a ton of science going on right now to try to figure all of these things out.
It’s really hard to say, because I think that the attitude that that survey that we did told us a lot.
Just to talk about that briefly, what we learned is people definitely want to get back to playing ultimate, there’s no doubt about it, but they want to do it safely. And initially they’re going to be way more comfortable doing it on a local, regional level than on a national level. Which obviously makes total sense. So that’s our focus right now with our team is to really try to develop some new competitive and playing opportunities that basically follow what our members told us they wanted in that survey.
But I think there’s a general feeling for us to get totally back to normal — you know, national events, people jumping on planes traveling — that if it’s not a vaccine, it’s going to have to be something fairly close to a vaccine, or people are just not going to feel 100 percent safe.
Or municipalities and local health authorities are going to say, ‘We don’t want always people from all over the country coming into our community, potentially, you know, spreading the virus.’ And I think it’ll be a blend of all of those things that determine when we can get going.
But I haven’t lost all hope. I’m planning for the worst and hoping for the best. That’s kind of my mantra. And along with let the science catch the virus, and I think, who knows? There could be a breakthrough in a month that really changes all of our thinking about getting back to team sports, and that’s why I want to be ready for that.
I want to be ready if that happens that we can hit the go button and get back to some really fun activities while we simultaneously plan for that not being the case and try to develop some alternatives in the meantime that keep people active, keep them safe, keep their skills up, having some fun. And then we’ll see if the science can catch the virus.
Maybe this is just out of mind for now, but do you think that this is going to impact the push for ultimate to get into the Olympics in 2028 in Los Angeles at all?
No. Nob [WFDF President Robert Rauch] and I still talk very regularly about that and don’t think that this will have any — this is impacting everybody the in the same way, especially summer sports.
So no, I don’t think it’ll have any impact at all. I think everybody is in the same place we are when it comes to team sports, which is, we all got to figure out a way to get through this. We all gotta be ready to go when it’s safe, but everybody wants to get back to as normal as possible.
I think you’re going to start to see it, based on the call that I was just on and some of the things, Charlie, that you alluded to earlier, I just think there’s a pent up demand and particularly as summer is opening up and the weather’s getting nice. There’s going to be a lot of energy and push around getting out and getting active and trying to figure out how to do it safely.
And I think you’re going to see sports start to slowly come back. I wouldn’t be surprised if we don’t see a modified NBA season, a modified Major League Baseball season. Soccer’s getting going over in Europe. I think it’s going to think it’s going to gradually happen, and I think we just have to be ready to see how it goes and what’s safe.
So I have one last question. In a world where ultimate starts to come back in certain places locally, which does feel like the most likely outcome, maybe organized pickup begins to open up in some places. Maybe there’s some summer leagues even — I don’t know if I would count on that, but it could happen in certain states, certain cities.
Is USA Ultimate in a position to benefit from that? Obviously, you want to see people getting back to being able to play ultimate, period, but from a financial perspective, is the option that you need to have a club season or it’s going to really impact your membership, or is there a way for the organization to be involved in some way with those more local efforts?
Really good question. Again, on the membership side, what we are really hoping is that anybody that can afford to will go ahead and take advantage of that membership drive that’s under way right now to help the organization, help the sport, and get an amazing deal. By the way, some of those deals are just — we’re never going to offer anything like this again. That’s for sure. Because they’re really good deals. So that’s a really important thing on the membership side that could help us. And we’re working weekly with our state-based organizations and affiliates, every single week, to help them navigate this and figure out safe return to play, strategies, plans, and I think that they will be able to before the end of the year, at the local level will be able to generate some activity that is safe, falls within the local safety guidelines, depending on what phase their state or municipality is in. And I think they’re going to be able to do that. I’m really optimistic about that.
And I think that’s really going to help them stay — and obviously they’re struggling. Huge. Just like we are. I t’s going to be tough for everybody cause no one wants to do anything that’s not safe for the athletes and the families that are involved. Whether we participate in that revenue or not is going to depend on some of these really cool new programs that our team is developing based on the survey results that we got. And the creative collaborations that we’re thinking about. We’re going to be ready to go with some of those, and some of those could generate some revenue for us. It’s gonna look very different probably than it’s ever looked, but it could definitely work.
And then I also think we’re going to be 100 percent ready if the science can catch the virus and it starts to get safe to play. We are making sure that we are in a position both here at headquarters with our incredibly hardworking, smart staff that I just love to work with as well as, you know, our volunteers all over the country continue to just be incredibly helpful helping us think through this and talk through this and make decisions around postponement and cancellation and new ideas and what we could do in the fall if it’s safe. And everybody’s still 100 percent engaged, which has been really fun to see. As a matter of fact, we had a staff meeting a couple of days ago. We were joking about how everybody feels busier than normal because we’re on phone calls late at night and we’re trying to make some pretty difficult decisions on certain things.
And it takes an enormous amount of phone calls and WebExes and board members helping us. And so everybody’s fully engaged. We’re ready to go. We’re cautiously optimistic. I think we’re going to have to plan for the worst — because this is a really dangerous, tricky virus — and hope for the best.
And if the science can catch the virus, we’re gonna be ready to hit the go button and ultimate’s going to get rip-roaring again.
Our conversation with Tom continued in a subscriber-bonus segment, where he took questions from Ultiworld subscribers. The interview continues below.
Bonus Content for Interview: USA Ultimate CEO Tom Crawford on the State of the Organization, Coronavirus, and the Future is only available to Ultiworld Subscribers
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