Why weren’t the U.S. National Teams at the London Olympics?: Part 3: A lack of funding

Since the 96 Olympics the bottom line for USA Team Handball has been trending down.

In Part 1, I provided some top level analysis as to why our current national teams didn’t qualify for the London Olympics- we’re simply not very good.  In Part 2, I addressed the challenges USA Team Handball has had in finding and developing athletes.  In Part 3, I tackle the current lack of funding, some potential sources of additional revenue and why the U.S. has struggled to raise more funds.

It doesn’t take long for anyone observing the state of Team Handball in the U.S. to come up with a number of potential solutions as to how things could be turned around.  Very few of those solutions, however, come free and even the lowest cost options require some level of funding to implement.  It can be amusing to hear or read these would be solutions and then do some back of the envelope cost analysis to quickly determine that  the first year of implementation alone would bust the entire U.S. budget for the last decade.

Just how lacking is this “Lack of Funding?”

So, just how cash strapped is USA Team Handball?  I don’t have all the financial details, but the U.S. Government’s tax reporting requirements do provide a pretty good window of the trend that have occurred in the past two decades.  Using the Internal Revenue Service (IRS) Form 990s that are available through different online resources, I was able to do some forensic analysis.   For each year, the first number is the amount listed on USA Team Handball’s Form 990s in regards to “gifts, grants and contributions received.”  The second number is the contribution amount listed in U.S. Olympic Committee (USOC) Form 990s as being granted to USATH.

Year       Total Contributions         USOC Grant
1993       $841,615
1994       $1,396,152
1995       $1,204,365
1996       $1,383,813
1997       $867,116
1998       $585,000
1999       $563,152
2000       $741,322
2001       $652,364              $510,000
2002       $614,930              $379,000
2003       $547,091              $487,561
2004       $458,621              $354,237
2005       <<N/A>>             $281,620
2006       <<N/A>>             $3,184
2007       <<N/A>>             $500
2008       $489,150              $0
2009       $974,612              $238,268
2010       <<N/A>>             $335,552
2011       <<N/A>>              $283,202

First, a few notes regarding the data above:

– I couldn’t find USOC Form 990s prior to the year 2000.
– From 2006-2008 there was essentially no USA Team Handball Federation due to the USOC’s decertification of the Federation.  During that time period, however, the USOC took over many of the responsibilities of the Federation.  It would be interesting to see what it cost the USOC to run Team Handball during that period, but those numbers aren’t available.
– The USOC fiscal year is the same as the Calendar year while USA Team Handball’s Fiscal Year is from 1 July to 30 June.  In other words 2009 data is actually from 1 July 2009 to 30 June 2010.
– Reportedly, there was a number of accounting problems with USA Team Handball’s 2010 Form 990 and I think that is why it hasn’t been filed yet.
– There are several other items that I could have listed in the table to include total revenue and total expenses.  With few exceptions, however, total revenue and expenses track very closely to the total contribution number.  In other words, almost all of USA Team Handball’s revenue has been in the form of grants and USA Team Handball expenses have matched that revenue.  (Although, based on reports of debt problems this is probably not true for the 2010-2011 timeframe.)
– The Form 990 does not require the filing organization to fully break out where the contributions come from and for what amount.  This is why I include the USOC reporting of grants to Team Handball.  Additionally, it appears that older versions of the form don’t clearly delineate between grant and sponsorship funding.

While there are a lot of limitations with this data, it does provide a pretty good indication of the downward trend in funding.  Certainly from the high water mark (around the 96 Olympics) to the demise of the Federation in 2006 there’s a significant drop in funding.  And not surprisingly, there was a corresponding drop in performance on the court with the U.S. not coming anywhere close to qualifying for the 2000 and 2004 Olympics.  Aside from the drop in national team performance the lack of funding undoubtedly exacerbated USA Team Handball’s management/leadership problems leading to the Federation’s eventual decertification by the USOC.

With the establishment of the new Federation in 2008 there was an uptick in funding, but this uptick was mostly attributable to the generosity of Dieter Esch.  USOC funding from 2009 to 2011 has ranged from $238K to $335K, still far below reported figures from 2000-2004 and surely below grants provided during the 1996 Olympics timeframe.  With Dieter Esch deciding to turn off the spigot in 2010, USA Team Handball is reportedly back to a budget in the $300-500K range.

It can be debated as to just how much USA Team Handball needs in terms of funding to field competitive teams, but few would argue that $300-500K is sufficient.  Certainly, if $1.3M budgets were required in the 1996 timeframe to be “respectable” in Atlanta, then probably at least that much (adjusted for inflation) is needed today.  And not to mention, there’s a whole lot more than just national team budgets to consider.  How do you also pay for development and the interests of the membership at large.  And marketing, staff salaries, etc, etc.  Really, to do things right you probably need more like $5M.

So, Where’s the “Mo Money” Going to Come from?

So, if it’s so obvious you need more money, why you just craft a plan and go get it.  Right?  If only, it was so easy.  On the plus side, it is fairly obvious what the potential sources of additional revenue are, it’s just that convincing those sources to actually cough up the bucks is easier said than done.  What follows is a list of the potential sources, why they haven’t contributed as much as maybe they should and some top level assessment as to what it’s going to take for them to change their minds.

USOC:  For decades the USOC has been the main funding source for USA Team Handball.  This funding has varied over the years at times probably pushing the $1M mark at the high end and bottoming out to zero at the low end.  (It would be interesting to see more definitive financial data going back to the 1970s and adjusted for inflation, but that information is not readily available.)   In more recent years it has been around $300K.  So what happened?   Why the dramatic decrease in funding support?

The simple answer is that since the 96 Olympics the USOC has increasingly decided to base their funding decisions on what a sport’s chances for getting a medal are.  With the U.S. not being coming close to a medal in 96 and clearly no chance of medalling on the horizon it’s easy to see how Team Handball is going to come up short when competing against the likes of Swimming and Gymnastices.  Even worse as a team sport the costs of fielding a competitive team are pretty substantial and the return on investment can only be one medal in each gender.  The bitter reality is that no matter how you slice and dice it, if you’re trying to maximize medals for the least cost, investing in Team Handball is a fool’s errand.

Might the USOC, however, rethink its current medal emphasis?  I can think of a number of other factors that should be considered when the USOC makes these decisions.  Those factors include Federation need, potential TV audience and health/fitness for the nation as a whole.  In each of those areas USA Team Handball scores pretty high.  “Need” certainly doesn’t need to be explained.  As witnessed by the buzz from the recent Olympics it should be even clearer to USOC reps that the sport is tailor made for TV.  I’m obviously biased, but I don’t think it should be lost on anyone that the dynamics of attractive Team Handball match is inherently more entertaining than watching an arrow hit a target or boat crews rowing their oars back and forth.  Finally, with obesity becoming an increasing health concern the prospect of thousands of youths running up and down the court is a selling point that the USOC will/should at least listen to.

While these are factors that the USOC appears to consider, the goal is still clearly gold, silver or bronze.  And as long as that’s the case the best USA Team Handball can probably hope for is probably around $500K/year, an amount which is more in line with the funding levels of some of the other minor Olympic sports.

But the USOC isn’t the only game in town, in Part 4 I’ll review why funding has also been lacking from international entities, sponsors and other sources of potential revenue.