By Javier Palenque
Broke or bankrupt is when a company can no longer pay its debts with the cash it generates, it is also called insolvency. Its creditors can call on the loans and force the entity in question into bankruptcy. OK, so is the USTA broke? before I answer this question one must understand the way the funds are treated at the USTA. It is no surprise that I think they mishandle everything there and that is why they hide participation data from us the people. You see if you hide data, then that leads me to believe they hide what else? If one looks at the financials for the last few years, the USTA makes very little money on a lot of revenue. This is not good because whoever is running the show should try to make as much money as possible to help more kids and people play the sport. But when there is a lot of cash generated on the top line and very little on the bottom line, it means three basic things:
- - It is very inefficient, much waste.
- - The investments are losers. Over-built to low-capacity utilization.
- - The accountability is poor. Too loose for a serious investor.
Let us see at the last 5 years and in the table below, I took out the investment gain or losses, which means the table reflects just operations results. Hold on to your seats.
This means that all the operations from the US Open all they do is lose money. This means the USTA needs to cut costs big time of course that means getting rid of fat, departments, and overpaid useless personnel. Something they do not want to do. If you were a shareholder and the management team lost your money, you get rid of the management team that same day. At the USTA they hand out bonuses and awards and keep flying to NY hundreds of people to 5-star hotels and spend millions in travel and looking for stars through the dumb player development program. Granted 2020 is a bad year, but they were doing poorly even before.
Now if you are a section leader if this does not upset you what will? This is called tennis and management malpractice. Now let us look at a key financial ratio to see if the organization can pay its…