USA Swimming Discusses Financial Standing as Olympic Year Approaches
Last week, reports surfaced concerning USA Swimming’s financial standing, specifically how it fared during the 2022 calendar year. Compared to 2021, USA Swimming endured a loss of $17 million in net assets for 2022. This figure can be attributed to three areas: An operating deficit of $1.29 million; Expenditures of $10.36 million from non-operating, board-approved reserve funds; and a $6 million investment loss.
However, a closer look at the financial figures of USA Swimming provides a greater overall picture of the organization’s standing. In an interview late last week with Kenneth Chung, a member of the USA Swimming Board of Directors, Swimming World provided the opportunity for the governing body to address its financial standing. As the Vice Chair of Fiscal Oversight, Chung served as the spokesperson for USA Swimming, given his role with the organization.
“USA Swimming is in a strong financial position. 2022 was undoubtedly a challenging year, but it is not a trend and was not unexpected. We suffered an unrealized investment loss because of the market and were impacted by the previous opening of statutes of limitations across the country. These are unusual situations, and we are not the only organization across various industries and organizations who had to deal with these circumstances in 2022. We were committed to uninterrupted programming and member services as we navigated through these challenges.”
Here is a look at several areas concerning USA Swimming’s finances:
- USA Swimming’s operating deficit of $1.29 million was a smaller shortfall than the Board-approved $2.6 million deficit.
- Due to the extension of statutes of limitations related to litigation, there was a direct increase in the total amount of money spent from non-operating reserve funds. This total rose to $10.36 million, and also included investments in Keeping Athletes First 1.0, a massive project that included technology improvements and coach education meant to safeguard young athletes.
- USA Swimming experienced a loss of $6 million in investments for 2022, a dip of 15%. Based on the S&P loss of 18% for the same timeframe, USA Swimming lost less than the market average. Additionally, these losses are unrealized, meaning they only exist on paper and may be recouped if the governing body’s investments rebound.
- Outside of the COVID-impacted year of 2020, in which financial struggles were the norm for most businesses/organizations, USA Swimming’s revenue has remained steady. Its 2022 revenue of $37 million was on par with figures from 2018, 2019 and 2021. Meanwhile, the governing body’s 2023 revenue is projected to be $38.3 million, its highest mark in four years.
- In its discussion with Swimming World, USA Swimming confirmed that its spending on the National Team for the 2022 campaign was lower than the previous year. However, there is an obvious reason for that discrepancy. Due to the COVID pandemic, the Tokyo Olympic Games were pushed back a year from 2020 to 2021, and it is typical for USA Swimming to spend a greater sum on the National Team during the Olympic year. In Olympic years, there are expanded training-camp costs for preparation ahead of the Games, and travel for National Team members is enhanced to ensure optimal performance at a competition that is the pinnacle of the sport.
- USA Swimming confirmed that it has not experienced any cash-flow issues and noted its current 2024 quad operating projection stands at a surplus of $1.3 million, which is consistent with previous quad periods.
“We strive to be transparent and above board in sharing information with our members and the public. For example, we are required to display three years of Form 990s on our website and, for USA Swimming, we show five years on our website, as well as displaying our annual independent audits. We recognize the critical need to share financial information with our members. We have highly astute senior staff and a robust business and financial management process – led by our Chief Executive Officer and Chief Financial Officer – who are diligent stewards of our finances. Also, our Audit and Investment Committees add to the organization’s financial oversight beyond just the Board and staff. These Committees of volunteers are comprised of professionals and athletes. They ensure that the financials are reported according to applicable reporting standards and that our investment portfolios are managed as intended and approved by the Board.
“Admittedly, our business model is unique and can be seen as complex by our membership. USA Swimming as a National Governing Body is subject to requirements and audit by the U.S. Olympic & Paralympic Committee. We are committed to exploring opportunities to improve communication of our financial information in a manner that is more intuitive for our membership to understand. Everything outside of confidential and privileged information is in the public domain, including on our website and within our posted Board of Directors meeting minutes. We share information in the public domain when it is legally permitted and not in breach of privacy or confidentiality.
“And while we are familiar with the complexities of our financials, we know others aren’t as close to those details. And so we want to minimize any misunderstandings or misinformation. We are grateful for the opportunity to have this conversation with you, allowing us to be thoughtful and comprehensive with this critical topic.”