Treasurer's Report

July/August 2004
Elements of the Budget, Part IV
Part I ... Part II ... Part III
By Tong Lee

In this final article about the USATT budget, I will discuss various ways that USATT could generate and increase income so that it has the financial wherewithal needed to invest in growing and promoting the sport, and to fulfill its prime and mandated mission and objective of getting an American on the Olympic podium.

As the National Governing Body (NGB) of table tennis and member of USOC, USATT receives certain fixed subsidies from USOC and also a variable amount based on the number of world-class athletes it has developed and who have a shot at an Olympic medal. In the immediate future, we should not expect much more than the fixed minimum from the USOC because we are faced with a Catch-22 situation regarding the variable amount – it’s so difficult to develop potential medallists without more funding, and we can’t get more funding without them. The USATT Foundation also provides us with a relatively constant amount of support because it is allocated based on its income derived primarily on financial investments.

USATT does possess certain properties and powers as an NGB that it could utilize to generate revenue. It owns rights to tournaments such as the US Open and US Nationals, the recently re-acquired US Open Teams Championships, Leagues, its website and the associated Forum. It also has the power to levy and set various fees such as membership dues, equipment approval fees, rating fees, and tournament sanction fees.

Increasing entry fees, though necessary, does little to increase the bottom line. A $5 increase in fees across the board at the US Open or Nationals only brings in about $3,500 per tournament – hardly enough to keep up with ever increasing expenses every year.

Last year, we made money from running the US Nationals and US Open. Beginning next year, we should be able to make money from the highly popular US Open Teams Championships (USOTC), whose valuable right USATT gave away for free in the past. We could promote the USOTC as an international event like the US Open, rather than a domestic event like the Nationals. An international event is more prestigious, brings in foreign players, and could be better promoted than a domestic tournament, thereby increasing the potential to attract sponsors. It is also relatively easier to find sponsors and get on television domestically and abroad for an international tournament. We also must find ways to make each tournament more profitable by putting more effort into finding sponsorships for all three tournaments. Usually, sponsors do not come to us; we must find and identify them, and sell them on the promotional opportunity and benefits of being a sponsor. Hitherto, for one reason or another, little has been done, but we have to change this with a plan to market all our tournaments, especially the US Open and US Open Teams Championships (wherever it might be run).

The USATT League could be a potential source of revenue by the imposition of a small fee for participation. Certain leagues matches could also be rated with regular USATT ratings to increase ratings fees.

Website and Forum

There is room to significantly increase revenue from advertisements from USATT’s website and Forum. We need a plan to effect more professional management of the website and Forum by increasing table tennis content and popularizing the Forum. At the same time, we must do a job to protect our intellectual property (table tennis content) from being used at other commercial websites through framing and other electronic means. At the same time, we have to look for more advertising revenue, not necessarily from the table tennis industry. One way to accomplish this is to hire one person to manage table tennis content, moderate the Forum, and be responsible for finding website advertisers. This could be done on a commission or profit-sharing basis.

Increasing Membership and Membership Revenue

One way to do this would be through a partnership with Clubs by giving them a financial incentive to generate memberships. For everyone who plays in a Club and is a USATT member, there are two or three who are not. This is a disconnect between the Clubs and USATT. Club owners and operators know that if they make their members also buy a USATT membership, they would lose some of their customers and revenue. However, if USATT rebated, say, 1/3 of USATT membership fees collected from club members by the Clubs or directly by USATT (instead of the current 15% on those collected by the Clubs) back to the corresponding Clubs, there would be a win-win situation for both parties. Let’s say that $210,000 is collected from memberships fees. If memberships and fees double, Clubs would receive a total of $140,000 and USATT would keep $280,000. The $140,000 should more than offset any potential loss from some club members who might quit, and USATT also increases its revenue. Clubs could increase its fees by $40 a year and offer free USATT memberships with Club memberships.

There are other ways, such as regular direct solicitation for donations for a specific program, but I have to conclude my series. I hope that it has been helpful in increasing the membership’s understanding of the USATT budget.