THE RETURN OF THE USCF
Is the nightmare era finally over for USCF? Are the incessant predictions of imminent bankruptcy about to end? Based on recent discussions with Frank Niro, I believe that a dramatic recovery is under way.
After two years of office mismanagement and hostility to affiliates, and after a year of the Redman Board's efforts to curtail or eliminate the federation's book and equipment sales, discourage Tournament Life announcements, and invest six figures annually in the unproductive US ChessLive project, Interim Executive Director Niro and the McCrary Board have returned USCF to its mission of promoting chess. The results have been spectacular.
Niro took over as ED from George De
Feis on December 21. Look at how things have changed since that time:
CASH FLOW
In mid-December 2001, USCF had accounts payable of $654,000, owing most of this money to chess book and equipment vendors. Most of these creditors had not been paid in over 90 days, some as long as nine months, and numerous vendors no longer extended credit to the federation.
USCF was able to obtain a $300,000 bank line of credit in January, and $240,000 of this credit was accessed on February 1. As of April 26, accounts payable was down to $212,000, with no vendors owed for over 30 days, and all these businesses now allow the federation to purchase merchandise on credit. And $15,000 per month has been repaid to the bank, reducing that debt to $195,000.
BOOK AND EQUIPMENT SALES
Under the Redman Board and De Feis, the USCF inventory of books and equipment had been drastically reduced, with the number of book titles dropping from 400 to under 100. Evening and Saturday phone sales had been eliminated, and customers offended by an unrealistic 15% shipping charge. As of mid-December, there were $149,000 in back orders, many because the vendor refused to ship the merchandise to USCF without advance payment. The federation also owed refunds to many members, mostly related to back orders, going back as long as nine months.
The Board and ED stated that USCF could not compete with other vendors, which made no sense, as the federation has major advantages over its competitors- the ability to advertise in Chess Life at cost, the availability of lucrative national tournament concessions, and the prestige of being the national chess organization. A misguided emphasis on "casual players" rather than tournament and club players led to such ludicrous situations as the fact that at one point, if you went online at uschess.org and typed in "clock" to the federation's merchandise search tool, the first product that appeared was not a chess clock, but an alarm clock with a chess design!
Under Niro, the USCF book & equipment program is coming back in a big way. At the recent National Elementary in Portland, sales were $68,000, a record for any tournament other than the Supernationals. And last year's Supernationals in Kansas City, despite having more than twice as many players, sold just $88,000. Sales were about $32 per player at Portland compared to $19 per player at Kansas City- and the latter event took place in April 2001, before most of the impact of the Redman Board's "basic items only" policy was felt.
Other recent successes include the National Open ($50,000 in sales or $71 per player, a USCF record) and the National High School ($40,500 in sales, $28 per player). What a change from the December 2001 National K-12 Scholastics in Dallas, the last De Feis concession, where sales were about $13 per player- two weeks before Christmas! Many parents and coaches seeking holiday gifts at that event were astonished to find that USCF had no clocks to sell, and no sets other than those used in the event and sold at its conclusion.
Mail order sales should soon show a major improvement as well, as the first catalog showing USCF's rebuilt inventory (including 300 book titles) is in the mail. The outrageous 15% shipping charge has been replaced by a method approximating actual cost, and evening and Saturday phone sales are due to resume May 13.
Back orders have been reduced drastically from $149,000 to $5,000- and the latter figure would be smaller still had not one vendor gone out of business. And refunds, once up to nine months behind, are now current within one week.
THE BOTTOM LINE
The deficit for the current fiscal year was about $160,000 when the new Board took office, and $166,741 through December. About $106,000 of this loss should have been reflected in the previous fiscal year or before, which the auditors plan to indicate in a footnote (a revised audit of past years is not being considered due to the cost). These misallocated items include about $79,000 in accounts payable invoices that were not shown to the auditors last year. Since Niro arrived, there has been a profit every month, but he still expects the final audited numbers to show a loss for the fiscal year, due to the misallocated $106,000. He does expect the monthly surpluses to continue through the end of the fiscal year on May 31, especially considering the success of the recent National Elementary (a record 2138 players and 800 new members) and National High School (a record 1460 players and several hundred new members). Niro estimates that USCF has netted at least $70,000 from those two nationals, not including sales profits, and one National remains, the Junior High that will begin in Milwaukee in ten days.
THE FUTURE
Niro appears to be compiling a terrific record for any Executive Director, especially an interim. Will his ED status become permanent? I don't think the Executive Board would consider anyone else if he is available. His current intentions are to present a strategic plan to be voted on at the Delegates Meeting, and to accept the permanent ED post only if it passes. If USCF has as much success during the next few months as it has recently, significant opposition to his plan seems unlikely.