USTA Losses Scrutinized by Members
The United States Tennis Assn. came under scrutiny from its membership as well as its former leadership last year when an expected surplus of more than $500,000 in 1999 turned into a deficit of nearly $13 million. This was attributable to a twin set of circumstances--unexpected operating expenses and investment setbacks.
Although the books have not yet closed on 2000, the organization was once again hurt by market conditions. Board members probably will hear the full extent of the losses at a scheduled meeting this week in Indian Wells. Officials said the number is not close to the alarming-sounding $13 million. One source said an estimate of a $5-million loss in the investment portfolio was a “safe” number but cautioned that it could still change.
“Our preliminary numbers indicate that the USTA’s financial performance related to operations will exceed expectations,” executive director Richard Ferman Jr. said Saturday. “However, like most investors, the performance of our investment portfolio fell short of what we had hoped for.”
USTA officials were quick to point out the difference from last year’s financial news. In particular, one substantial unforeseen expense was the last-minute hosting of a Fed Cup match in April 1999, a move to Raleigh, N.C., necessitated by unrest in the Balkans.
“Last year, the negative impact was from both our operations and return on investments,” said USTA communications director Andrea Jayson. “And this year, it’s solely from the return on investments.”
After last year’s developments, the USTA established new processes and procedures, among them selecting a new investment advisor, Cambridge Associates, which came on board in the fall and is said to be taking a long-term approach in managing the organization’s portfolio.
Despite last year’s troubles, the USTA was hardly crumbling. There were no cutbacks in its programs, it has more than $100 million in reserve sitting in the bank and is coming off record-setting financial numbers at the 2000 U.S. Open.
“This is a very financially sound organization,” one source said. “The only variance that are less controllable from an operating standpoint are the market conditions. And that’s where we are going to get hurt.”
