USPSA Finances Part 5: Can USPSA run a profitable Nationals?

In part 4, I ended up taking a look at how USPSA was managing the money generated by Front Sight, an unplanned detour that lead me to the question of whether or not USPSA’s ad sales staff is really doing a good job. Today I want to regather my focus and look at Nationals, the single largest expense on the USPSA tax returns. We’ll post the cost of Nationals and the revenue generated for each year going back to 2008’s tax return.

  • 2008 Cost: $545,035; Revenue: $387,020
  • 2009 Cost: $666,179; Revenue: $353,721
  • 2010 Cost: $651,353; Revenue: $365,433
  • 2011 Cost: $712,064; Revenue: $386,595
  • 2012 Cost: $588,776; Revenue: $330,671
  • 2013 Cost: $576,114; Revenue: $357,440

It is immediately obvious that USPSA loses money each year on the National Championship matches. The average money lost by USPSA over the six year period of Nationals we tracked is approximately $250,000 a year. That is an awful lot of money. Today we have two questions: can USPSA run a profitable National Championship series, and more importantly, should they?

To answer question one, you first have to look into the greatest cost of putting on Nationals: travel. USPSA provides room, lodging, and other travel expenses to the volunteers working the National Championship matches. That’s not cheap; and in fact travel is the single largest line item on USPSA’s expense reporting aside from wages and salaries. The problem that we run into in figuring out where USPSA is spending the money that goes into Nationals though is the same as we had with Front Sight – “Nationals” isn’t a line item expense so we can’t see which buckets are going into it. It’s safe to assume travel is a big part of the cost, but what else? Rental fees for the facility, administrative costs like printing/mailing entry forms, etc; all of those go into the cost of putting on a National Championship.

However, the answer to whether or not USPSA could run a profitable Nationals is simple: yes they could. The delta in 2013 was about $220,000 between costs and revenue. According to the 2013 tax return, 1650 shooters participated in the Nationals that year. That means that the average entry fee was around $200; if USPSA increased the average fee by about $130 and had the same shooter turnout, the matches would approximately break even. Of course, the math isn’t that easy, because any increase in the cost to the shooters is going to mean some people will stay home. Of course, the fee for the 2014 handgun nationals is already $295; would people be willing to pay a higher fee?

The most important question though isn’t “can”, because of course they could make money off nationals. The most important question is “should” USPSA run a profitable nationals? That’s much more complicated, and gets into the ethics of running a 501c3 organization. A for-profit company, regardless of how it’s organized (LLC, S-corp, etc) has a duty to deliver value to its shareholders/owners. A 501c3 doesn’t have that same duty, so one could argue that as long as USPSA is able to meet their obligations to their members and pay their employee’s salaries, they don’t need any particular event to be profitable.

But the question remains, so I’ll put it out to the readers: should USPSA attempt to run the Nationals so that it is a profitable event?

9 thoughts on “USPSA Finances Part 5: Can USPSA run a profitable Nationals?”

  1. They don’t have to be profitable to come closer to breaking even. The less money they lose on nationals the more they have for marketing/member services and growing the sport in general.

  2. Seems like a little cost analysis is in order, hard to imagine spending over 500k putting on a match, there must be a way to save a few bucks.

  3. It will be very interesting to see next years returns now that SCSA has officially merged into USPSA and the SCSA LLC has been decommissioned.

  4. JP – As someone who has helped produce an Area match, I can say hotel rooms alone add up very quickly. I don’t doubt the $500k figure at all. The thought of having to pay for airfare and rental cars makes me shiver. On top of that once you start hiring hourly contractors with expense accounts (public/media relations, graphic artists photographers, security, sponsor coordinators, etc) all bets are off. I’m not saying this is what goes on at Nationals but I do believe the number.

  5. I’ve worked a couple of National matches (Bend, in the early 2000’s), and I have a few things to say about it.

    First: USPSA has always relied heavily on “local” ROs and CROs to provide staff; generally, they were not Chief Range Officers on the stages they worked, which means that the “Usual Suspects” (very experienced CRO’s) were in charge of each stage. The expenses for ‘travel’ were mostly for those tried-and-true, experienced members.

    Considering the USPSA scandal that you yourself uncovered, Caleb, it seems reasonable that USPSA would need to rely on the experience and oversight of these “Old Guard” people. (You know their names … we count on them to ensure a consistent, ‘professional’ and fair leadership on every individual stage.)

    Second: you have to ask the question “Why should USPSA sponsor a National Match every year … and one for all of the (now six!) Divisions?”

    The answer is, of course, that USPSA has a need to provide both continuity of what has become a tradition, and because members need to have a goal to achieve.

    Let’s face it, if the only people who expected to win the match, and win big, would attend, then it would be difficult to attract more competitors than range officers. “Major Matches” (In USPSA, both Level II and Level III) aren’t put on for the people who are expected to win the match. They are for the little guy, the Mediocre Match-goer. He doesn’t expect to win anything. He only attends for the same reason he (or she) began shooting USPSA competition in the first place: to find out if he’s really as good as he thinks he is, and because he just wants a place to shoot, dammit!

    Personally, I don’t think that anyone is really complaining about the cost of putting on any major match. The sponsors love it, and they help. The shooters love it, even though they lose big time. (In the 1998 Area 1 match, I came in with the lowest non-zero score, and I enjoyed the experience anyway. I definitely count myself among the huge rank of “Mediocre Shooters”!)

    Are the USPSA Nationals a money loser? I prefer to think of it as a “Loss-Leader”. It encourages membership, and participation, and it rewards everyone who participates. I’ve been squadded with some of the major names in USPSA competition, including Todd Jarrett and (the personable but decidedly not-a-match-winner) Michael Bane. This, when I was a D-level shooter. Oh, did I mention the guy who was shooting in Open Division with a compensated revolver? He did … not bad; but he had fun. I learned a lot from that.

    It’s hard to put a price on the USPSA National experience. I’ve seen grandmasters DQ on the first stage. You won’t see THAT walking through your local gun club!

    While it’s true that Nationals might not be profitable financially,it’s petty to expect USPSA to make money on the deal.

    We don’t deal in dollars; “We deal in lead, friend.”

  6. I have worked several USPSA nationals as CRO/RO. The expense money I received did not cover my actual expenses, but I don’t care. I think the experience of shooting along side of the best in the sport is one many shooters cherish. If the cost of the nationals goes up too much the average shooter without deep pockets will most likely stop coming and the deficit will be even greater. When the nationals are within one day’s drive of my home I would be willing to pay my own travel, if it would help. But then I am not sure running a nationals for profit is in the best interest of the sport.

  7. Caleb, you still don’t get it — USPSA does not need to run Nationals as a breakeven or profitable event, because the organization does NOT have a profit motive. As a 501c3 they are no doubt advised by their CPA to come as close as possible to breaking even (or a loss), because it is a NOT-FOR-PROFIT organization.

    Clubs send in $1.50 per shooter and $1.50 per classifier score to headquarters, and they make a penny or two on official targets sold to the clubs. It’s this money that gets dumped into one big bucket (along with Nationals entry fees, etc.) and then gets divvied up to all the various priorities that the organization has.

    Sorry it doesn’t fit nicely into your delusions of grandeur as an amateur forensic accountant sleuthing expert, but you’ve uncovered nothing, and you haven’t found a shred evidence of anything untoward or improper going on here.

    Oh, and “delta” means change-over-time, not the different between two numbers.They teach that in actual forensic accounting class.

    1. I’m not trying to uncover anything, I’m just reporting the facts and asking questions. If you thought I was trying to “uncover” something, that’s on you. In fact, if you’d read the post, you’d have noticed the part where I said that as a 501c3, USPSA does not have a duty to return a profit.

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