Gym Athletes Get Little in Way of Cash : Legal Cash Payments From U.S. Federation Less Than .1% of Budget

The United States Gymnastics Federation, which operated in 1987 with a $6.9-million budget, gave its national team athletes only $6,000 in direct cash assistance for training and living expenses.

The amount, less than 0.1% of its budget, is in direct contrast to other U.S. federations with similar budgets that gave their athletes between 3% and 11%. The skiing federation and its national team corporation, for instance, gave $1 million of its $9-million budget to its athletes.

According to information obtained by The Times from the USGF, only two athletes were given grants of $3,000 each. No other athletes received direct cash payments for training or living expenses because the USGF does not have a formal cash assistance program.

Mike Jacki, executive director of the USGF, said he proposed a cash assistance program in May. If the proposal is accepted, the program will be in effect in 1989.

The USGF does, however, have a profit-sharing program for its employees, which was established by the USGF in 1986.

The USGF financial statement also lists cash holdings of $2 million, of which Jacki said includes the $1.2-million allocation from the Los Angeles Olympic Organizing Committee excess in 1984. Jacki said none of that money, except for about $40,000 annually of the interest, has been spent.

The issue of accountability by the USGF was brought to the forefront last week when it was confirmed that a review of possible financial irregularities was under way by the U.S. Justice Department.

The Justice Department did not list allegations involving lack of direct athlete support. However, should Justice Department officials find the USGF has misappropriated funds, the lack of a cash assistance program could fall under its jurisdiction.

According to the 1987 USGF financial statement, $5.9 million was spent on program expenses and another $880,000 on administrative costs. Those are the only two major expenses listed on the financial statement.

USGF controller John Hewett explained that on the financial statement, administrative costs are included in various program expense entries. Although this serves the needs of USGF officials, it does not provide an accurate picture to outsiders of how the money is actually spent.

For example, administrative salaries for 1987 are listed on the financial statement as $208,000, but Hewett said that the actual payroll for the 32 employees working at USGF headquarters in Indianapolis was $802,000. He said an additional $74,000 in annual fees were paid to independent contractors.

Hewett said that $157,800 was spent on employee benefits, including $83,000 that was put in a profit-sharing plan to finance two years of participation.

Even though all USGF documents obtained by The Times use the phrase profit-sharing , the plan would have to be run as a defined contribution benefit plan to be legal in a nonprofit organization. A nonprofit organization cannot finance a plan based on profits because, theoretically, it isn’t supposed to have any.

Hewett said the $208,000 listed for administrative salaries pays for 4 1/2 full-time employees and two part-time employees. This figure includes Jacki’s 1987 salary, which he said was $92,000. Jacki would not reveal his 1988 salary.

Also listed under administrative costs is travel of $58,297, which was spent on Jacki and his office staff.

Jacki and Mike Donahue, president of the USGF, said that although the USGF does not offer athletes direct cash, most of the federation’s money is spent on the program by providing both national and international competition experiences, and on training clinics for more than 160,000 gymnasts, which includes 192 in the elite program.

The major program expenses can be broken down into four categories:

--Events hosted by the federation ($1,236,600): Hewett said this includes six major events in the United States; a $117,000 payroll for 5 1/2 employees. Jacki said that even though the USGF does not lose money on such events, they are not big moneymakers.

An example is the U.S.-Soviet meet held in Phoenix in April. Jacki said the USGF made only $10,000 after expenses.

--Athlete training ($530,148): Hewett said this included 40 or 50 training camps, all travel and expenses for athletes in international meets. However, a national team spokesman said that in 1987, the women’s senior team had only one 3-to-4 day training camp and the junior team had two camps.

--Committee expense ($394,970): Hewett said this included $74,000 paid in set annual salaries to five independent contractors who work with the elite programs; the salaries of two full-time program administrators; program-related travel and operating expenses of the 14 standing committees and the 38 member board of directors, as well as any other temporary committees created by Jacki or the board of directors. For example, travel and expenses for board members, who meet twice a year, was $31,203.

Hewett said this category also included money spent directly by the men’s and women’s international committees on programs.

--Membership expense ($2,197,619): Hewett said this included $101,000 for four full-time and three temporary employees in the membership department, printing of membership cards and supplies, and rebates for districts and regions.

Other major expense categories included $251,148 for marketing and communications, of which $160,000 was for salaries of five employees and $466,000 for publications. Publication revenue was listed as only $145,358.

The USGF makes most of its money from membership fees ($3.4 million), television rights and sponsorship fees ($1.26 million), United States Olympic Committee grants ($350,539), and gate receipts from events ($758,000).

Jacki said that 14 of 18 athletes on the 1987 men’s team and 4 of 20 on the women’s team would have been eligible to receive cash assistance from the USGF had such a program been in place. Under National Collegiate Athletic Assn. rules, if an athlete receives cash for performing in a sport, the athlete is ineligible for collegiate competition in that sport.

The national team male gymnasts who were eligible for cash assistance are either college graduates or have voluntarily given up college eligibility, as is the case with the four women.

Hewett said, about $18,000 more was given to eligible male athletes, but that the money was conditional on the athletes performing in exhibitions or teaching clinics. The top eight women were also offered $1,500 each for performing in an exhibition held in May, but the only gymnast eligible to accept the money, Phoebe Mills, declined to attend.

The USGF said it plans to give $1,500 to each gymnast who makes the 1988 Olympic team for training expenses.

Of the five highest budgeted sports organizations in 1988 that primarily govern Olympic sports in the United States, three offer cash assistance programs for athletes that ranged from $105,000 to $1 million.

The Athletics Congress, the U.S. governing body for track and field, provided $400,000 to 30 athletes, 4% of a reported $9-million budget. The U.S. Ski Assn. and U.S. Ski Team, Inc., gave about $1 million to about 150 athletes, 11% of a $9-million budget. U.S. Swimming, Inc., gave $105,000 to 25 athletes in 1988 and a portion of $74,000 in 1987. The swimming cash assistance program operates on a fiscal year whereas the budget is on a calendar year. The swimming budget is $5.4 million.

The U.S. Tennis Assn., with a budget of $41 million, does not offer a cash-assistance program. Olympic tennis players are professionals, however, but the USTA still has a budget of $6 million for a new junior and national team player development program. Tennis will be a medal sport in the Olympics this year for the first time since 1924.

Jacki said his proposal would pay the team’s top five men and women athletes $16,000 each in 1989, graduating to a payment of $20,000 each in 1992. Athletes who placed sixth through eighth in the national championships would earn $8,000 each in 1989, graduating to $10,000 each in 1992.

“I told the executive committee we had better do something or we were going to be under some heat from the USOC,” Jacki said.

Jacki said that both the executive committee and the board of directors approved the plan, but asked him to run it by the men’s and women’s program committees. Jacki said that members of the men’s program committee had trouble with it because most of their athletes are in college, and they did not want to entice the gymnasts to drop out of the program.

He said the women’s program also committee members did not fully approve it, saying the program would best be served if the money were spent first to improve the quality and quantity of the training clubs before giving it directly to the gymnasts.

But coaches on the committees agree that graduates should be offered cash assistance.

Tom McCarthy, national women’s team assistant coach and owner of Berks Gymnastics Academy in Wyomissing, Pa., said the women’s program relies totally on private clubs for training, not colleges.

“In our case, we underwrite the cost of training elite gymnasts, and sell Hoagies on the corner to pay for it,” he said.

McCarthy said the parents’ club at his gym had spent about $60,000 the past six years to underwrite the travel and expenses of Sunja Knapp, a three-time national team gymnast whom he trains.

“We are happy to get any help from the federation, but the $2,000 I get for Sunja being on the national team doesn’t go too far--she goes through about $1,000 worth of tape supplies alone each year,” McCarthy said.

Coaches receive $2,000 for each athlete they put on the national team on the senior level and $1,000 for each athlete on the junior level. Last year, Jacki said this accounted for a USGF expenditure of $100,000.

Don Peters, the women’s U.S. Olympic coach, agrees with McCarthy. “I think the athletes deserve cash assistance, but if the goal is to win gold medals, I don’t think it will have an impact on the women’s side by giving the money to 14- and 15-year-old gymnasts.

“Where the money will have an impact on the women’s side is by first increasing and improving the quantity and quality of training centers, then by giving the money to the athletes to help offset expenses.

“Then, there would be more centers producing more quality athletes, and instead of having a handful of quality training centers, we would have 100. More athletes could train closer to home, rather than flying cross-country to live close to an instructor.

“On the men’s side of the sport, however, because they are older, I think it would help. It might have kept a Peter Vidmar or Mitch Gaylord in the sport for four more years, and they wouldn’t have had to worry about earning a living the minute they graduated from college.”

Peters, who runs SCATS gym in Huntington Beach, said elite and pre-elite gymnasts only pay $100 per month in gym fees. SCATS also pays all travel and hotel expenses.

Most of the criticism of how the funds are spent stems from Jacki’s success in more than tripling the revenue and doubling the staff since he was named executive director in 1983. Jacki is credited for taking the organization from $200,000 in the red to a $7-million organization.

It’s that success that led Jacki to institute the profit-sharing plan, which Donahue said he also encouraged. .

“We are where we are because of the quality of our staff,” Donahue said. “It’s a contribution of 6% of salary and it wouldn’t be that much if we divided it up among the men’s team, women’s team and rhythmic team. It gives us the ability to keep good people.”