March 6, 2014 by Ultiworld in Analysis with 55 comments
This article was submitted to Ultiworld by George Brell. Brell started playing ultimate in Anchorage, AK. He was the captain of Princeton and also played at Duke. He currently resides in the bay area.
Major League Ultimate commissioner Jeff Snader and VP Nic Darling hosted a podcast yesterday that was very critical of USA Ultimate. Right after the show, they released an image (above) that sought to raise questions about USA Ultimate.
While the statistics behind this image are somewhat correct (more on this later), the criticisms that it seeks to levy against the organization are simplistic. They rely on a visceral reaction and an unflattering comparison to make a weak argument. There are actual arguments to be made regarding USA Ultimate’s purpose and goals, but the arguments advanced by MLU’s presented statistics are not them. MLU appears to make three major arguments:
1. USA Ultimate’s membership is dramatically lower than that of US Lacrosse and USA Hockey even though the number of persons participating in ultimate is much greater.
2. Tom Crawford, USA Ultimate’s CEO, is dramatically overpaid.
3. USA Ultimate is prioritizing spending on the National Team over membership and development.
From the outset, MLU hasn’t sourced its image. I’ve attempted to find sources for all of the assertions and have collected them at the end of this piece.
Implicit Argument #1: USA Ultimate’s membership is dramatically lower than that of US Lacrosse and USA Hockey even though the number of persons participating in ultimate is much greater.
The main problem with this argument is that it treats two sets of numbers (participation data and membership data) as if they are related without any evidence to support such a conclusion.
From the outset, the figures reflecting total participation aren’t useful. This is due to the distinction between core participants and casual (non-core) participants. For the relevant sports, casual participants are defined as persons who participate 12 or fewer times per year. Considering that participating in an ultimate summer league will usually provide enough discrete events to identify someone as a core participant, casual participants are likely not league members and probably don’t even participate in a weekly pickup game. The truth is that USA Ultimate has nothing to offer these individuals — in the same way that the US Soccer Federation doesn’t seek members from local lunchtime games. The more relevant group is that of core participants.
Part of the blame for this confusion actually lies with USA Ultimate since Tom Crawford has often referenced the total participation figure (and the SFIA study from which it’s taken) when he talks about how ultimate is poised for explosive growth, but that doesn’t mean that this population should have any direct relationship with membership. MLU appears to include it merely to widen the disparity between the membership numbers and the relevant populations.
If we limit our consideration to just core participants, ultimate’s participation numbers are no longer dramatically higher than ice hockey or lacrosse. This still doesn’t mean that we can compare membership figures and core participant populations.
The fact remains that ultimate is a different sport with different barriers to entry than hockey or lacrosse. Playing ultimate 13 times a year doesn’t even require participation in a league – a weekly summer pickup game would represent core participation. The minimum core ultimate participant then is a mildly frequent pick-up player for whom USA Ultimate’s membership amenities — insurance, legitimate competition, infrastructure — have no appeal.
By contrast, the minimum core hockey participant likely has spent significantly more money on equipment, is probably a member of a league, and has to pay for time at a local ice rink. He will have already sunk significant costs into his sport, so the additional cost of membership is comparatively lower. And the advantages USA Hockey offers are likely to be more relevant.
While the 13 event threshold makes some sense for lacrosse and hockey, it doesn’t make sense for ultimate. The survey defined core participation in outdoor soccer – a sport that has similar equipment and field requirements – to be 26+ events per year. This suggests that the 1.4M core ultimate participant population figure is overstated. Even though lots of people may play in the park, we’re simply not that big yet.
The chart also misrepresents ultimate by making absolute comparisons rather than per capita ones. USA Ultimate has a membership roughly 1/10 that of US Lacrosse and 1/15 that of USA Hockey. If you compare their revenue on a per-member basis, USA Ultimate earns about the same as USA Hockey and more than US Lacrosse. This suggests that revenue essentially scales with membership. This is unsurprising given that all three organizations identify membership dues as their greatest source of revenue (USA Ultimate – 59.6%; US Lacrosse – 69.3%; USA Hockey – 61.4%) and all three organizations charge similar amounts for membership: USA Ultimate – $51.50/$30 for Adult/Youth; US Lacrosse – $50/$35/$25 for Adult/High School/Youth; USA Hockey – $40/player.
A much better argument against USA Ultimate is that it needs to heavily prioritize youth development. This argument achieves MLU’s obvious goal of arguing against the Triple Crown Tour, but does so by pointing to an obvious source of revenue rather than a mythical population that USA Ultimate has completely missed.
Implicit Argument #2: Tom Crawford, USA Ultimate’s CEO, is dramatically overpaid.
This argument is authored almost exclusively by the comparison of Crawford’s salary to USA Ultimate’s gross revenue. There is no good reason to use that metric. Crawford earns less than his counterparts at the comparison organizations (and less than comparable persons at USA Rugby and the US Soccer Federation). Fact-check: the CEO of US Lacrosse earns $220K, not $188K. US Lacrosse also has a COO who earns $200K.
If people wanted Crawford to earn 1% of USA Ultimate’s gross revenue (like the fictionally-salaried head of US Lacrosse), he would be earning $25,000/year or $12.50/hour. That’s simply not a legitimate salary for his position.
[Editor’s note: An Ultiworld analysis of CEO pay in US-based sports National Governing Bodies in 2013 found that Tom Crawford’s pay — even when considered as a percentage of gross revenue — is well in line with CEO pay at other federations. We didn’t publish the analysis because it was a non-story; Crawford’s compensation, when looked at in comparison to ALL NGBs (not just high revenue earners like lacrosse and hockey), is perfectly reasonable.]
Crawford was hired by the Board of Directors because of his credentials, his relevant experience with the USOC, and because the Board is seeking to mold USA Ultimate into an organization very similar to those of US Lacrosse and USA Hockey. That requires a specific kind of CEO — one who tends to be compensated around the amount that Crawford is compensated.
The better argument is over the goals and direction of USA Ultimate. If you don’t agree that USA Ultimate should be pursuing the goal of Olympics inclusion, then Crawford is probably overqualified. But that’s not an argument about salary, that’s an argument about organizational direction. And using the gross revenue comparison is clearly a scare tactic that is completely unrelated.
Implicit Argument #3: USA Ultimate is prioritizing spending on the National Team over membership and development.
This is the point where the chart is disingenuous. None of the figures listed are technically wrong, but they’re wrong. They simply aren’t comparing apples to apples.
USA Hockey is listed as spending ~$10.5MM (26.5%) on “Sport Development.” That figure appears nowhere in USA Hockey’s Annual Report or their Form 990. Instead, MLU appears to have added together expenses in the Annual Report (pg. 18) labeled “Internet Program,” “Player Development,” “Coaching,” “Junior Program,” “Adult Program,” “Youth Program,” “Membership Development,” and “American Development Model” for a total of $10.6MM.
USA Ultimate, in contrast, is listed as spending $144,000 (5.7%). This corresponds to a single entry in its Annual Report (pg. 54) labeled “Sport Development and Outreach.” But it simultaneously ignores “Communications and publications,” “Youth development,” “Coaching development,” “Observer development,” and “SOTG/Rules.” If we add these categories into the total, we get $776,814 – 30.4% of gross revenue.
Similarly, USA Ultimate is listed as spending $1.1M (44%) on “National Team and Events.” This figure appears to be the sum of the entries labeled “National Teams” ($202,153) and “Championship Series” ($875,502).
The similar categories for U.S. Lacrosse are “National Team” ($784,550) and “Specials Events” ($1,531,798). But there is no evidence that “Special Events” are the same thing as the Championship Series. Similarly, for USA Hockey, the relevant entry is simply “ National team development” ($3,369,516). MLU appears to ignore any events put on by USA Hockey.
So MLU is comparing the USA Ultimate National Team and the Championship Series (its biggest expenditure) to the USA Hockey National Team (and no events) and the US Lacrosse National Team (and special events). This is a comparison guaranteed to make USA Ultimate’s spending appear unfair.
USA Ultimate’s spending on its National Team only represents 7.9% of its gross revenue, less than USA Hockey (8.5%) and slightly more than US Lacrosse (4.6%).
Finally, Member Services has no consistent definition across categories. It appears, based solely on quantity of spending, that member services include the Championship Series-type events put on by USA Hockey and US Lacrosse. If you add the cost of the Championship Series ($875,502) to the “Member services” entry ($141,448), it represents about 39.9% of gross revenue, almost identical to US Lacrosse and more than USA Hockey.
USA Ultimate is spending money in ways that are very similar to its comparison organizations. Cherry-picking data to make it appear as if that is not the case is lying.
The participation figures appear to come from a study done by the Sports and Fitness Industry Assocation. A copy of the 2013 study can be found here. Sludge Output reported on this survey back in October 2013.