UPA, Inc.

Photo Copyright Neil Gardner / nzsnaps.com & UltiPhotos.com

When we talk about sport, our first thoughts are about the athletes, the big plays, or, as the old ABC Wide World of Sports used to say, “the thrill of victory… and the agony of defeat… the human drama of athletic competition.”  Yet that is only a small part of what sport is today.  For better or worse, sport first and foremost is now a business– a very big business where what is happening on the field or court is increasingly driven by commercial considerations.  Here is an overview of the early days of ultimate and how its business core developed.

The Business of Sport

The Olympics, founded as the epitome of the sporting ideal, are perhaps the biggest manifestation of the business approach.  The IOC generated revenues of over US$8 billion in the 2009-2012 quadrennium (see chart below). The IOC shares this revenue with organizing committees, National Olympic Committees and International Federations.

iocchart1

The sports federations at the London 2012 Summer Olympic Games divided up $519 million based on their IOC ranking, with Track and Field, the flagship sport of the Games, expected to receive around $47 million as the only one in the top-earning Group A.  However, the new plan for the Rio de Janeiro 2016 revenue distribution has five categories of sports instead of four, with athletics no longer enjoying all of the Group A pot, as it will be joined by gymnastics and swimming.  Under this previous breakdown, Group B sports received about $22 million each, Group C $16 million and sports in Group D about $14 million.  The World Flying Disc Federation, having been Recognized by the IOC in May 2013, now receives a small stipend (three degrees of magnitude smaller from Olympic program sports) from the IOC per year, as do all of the 33 recognized International Federations.

In our own sports community, USA Ultimate has become a solid business in its own right and currently is the largest of all disc sports associations in both members and budget.  The 2012 annual financial statements (for the corporate entity “Ultimate Players Association d/b/a USA Ultimate” – yes, the UPA still exists) show total revenues of $2,551,220, net revenues of $164,743, and cash and investments of $1,759,809.  Membership dues represent 60% of total revenues and sponsorship was $265,735.  While this pales in comparison with the IOC sports, it nonetheless is far ahead of where the sport was in its early years.

The Early Days of Frisbee Business

Flying Disc (aka Frisbee™) sports were developed after the introduction of the first plastic flying discs in the 1950s by Fred Morrison, selling the rights to toy company Wham-O in 1957.  Guts was developed in 1958, ultimate in 1968, Freestyle in 1974, and Disc Golf was formalized in 1976.  Edward “Steady Ed” Headrick, GM and marketing head of Wham-O, started the International Frisbee Association in 1967 to promote the sale of their Frisbees. Many of the international affiliates began as Wham-O distributorships that sponsored tours of well-known Frisbee athletes. Dan “Stork” Roddick, who took over as head of the sports marketing arm of Wham-O in 1975 (where he served through 1994), played a crucial role in encouraging the establishment of national flying disc associations (FDAs) in Sweden, Japan, Australia, and in many of the countries of Western Europe, and was instrumental in supporting the establishment of specific disc discipline organizations such as the UPA, GPA, and FPA. In 1983, Wham-O was sold to Kransco and the IFA was disbanded.  In its heyday, Frisbee sports were featured at the World Frisbee Championships (WFC) held at the Rose Bowl in Pasadena, California, with an East-West All-Star Ultimate Game in 1975 and 1976.

I began playing at Williams College when we started the team over the winter of 1976-1977, one of the first 25 or 30 college teams.  At that time, although the first multi-team tournament had been played at Yale in 1975, most games were arranged between two teams and organized through a loose network centered around an annual captains’ meeting first organized by Larry Schindel and later by Jim Powers.  The first truly national ultimate championship was held in 1977, with the Santa Barbara Condors led by Tom “TK” Kennedy beating Penn State (9 of 15 Penn State players were flown to the west coast by Wham-O).  In 1979, a five region competitive format was agreed for the National Championship and discussions about a truly autonomous ultimate organization increased.  In December 1979, TK came to the East Coast Captains’ Meeting with a proposed set of bylaws and, after vigorous debate and despite a lot of skepticism, the Ultimate Players Association (UPA) was formed.

The early 1980s saw many developments in the game and the sport:  the introduction of the women’s and college divisions, the 8th Edition of the rules in 1982, the development of increasingly competitive club teams traveling nationally, the first world championship in 1983, etc.  However, from the business side, very little changed through much of the 1980s.  Wham-O still provided a large part of the financial support for the UPA, initially through direct grants and, after the sale to Kransco in 1984, through an annual donation of 3,000 discs and access to printing facilities.  The UPA was a sort of combination of governing body and players’ union, run by the Coordinating Committee, comprised of the five regional coordinators and the National Director elected by the players (the Women’s and College Directors were added later in the decade).  Dues, which started at $5 per annum on a voluntary basis, had been increased to $7 in 1981 and in mid-decade were made mandatory for participation in the National Championship series.  Membership in the UPA reached 700 by year end 1980, 2,000 by 1984, and 4,300 by 1987.  The focus of the organization was on managing the championship series across the various divisions and on concerns about the focus on “spirit of the game” as increasingly competitive teams pushed the envelope, engendering a campaign by national director Gary McGivney against what he termed the rise of “Uglimate.”

The Institutionalization of the UPA and the First 25 Years of Ultimate Business

At Nationals in 1987, I was elected as the national director of the UPA.  When I took over from Gary McGivney, I literally received a box of some pretty random stuff and, shortly thereafter, some stationery.  The UPA was the same grass roots organization that it had been instated at its genesis, and it basically focused on the tasks of organizing the championship series (both College and Club) and putting out the UPA Newsletter several times a year.  As a player on national and international championship teams, it seemed to me that the lack of professionalism in the way the sport was being run was greatly hindering its growth.  Further, players were increasingly frustrated at all levels of play:  the elite players felt the sport wasn’t keeping up with their competitive demands on and off the field and the recreational players were looking for more and different avenues for play.

The UPA had virtually no business infrastructure.  The UPA had been held together since the early 1980s by the efforts of Carney Foy, the treasurer, and his wife, Creta, in Silver City, New Mexico.  For a small stipend, from 1981 through 1996, Carney and Creta would receive rosters and reconcile them to the thousands of dues payments, get everything into their system, and print out the labels for the Newsletter.  However with annual revenues of $37,000, it didn’t really have the resources to do much more.  And the governance structure of the Coordinating Committee, with their regional focus and with only one meeting a year, wasn’t prepared to deal with the running of a business. I ran the UPA out of my home office, using a text-based Compuserve account with a 2400 baud modem for e-mail dialogue with those who had access but mainly dependent on phone and paper-based mail for communications.

Over the next three years we put the basic business infrastructure of the UPA in place.  With the limited financial resources to support the goals the UPA needed to accomplish, we polled the players to see if a raise in membership dues was acceptable. The players agreed and dues were raised to $10 in 1988 and to $25 club / $15 college in 1989.  I convinced Brian Murphy, the second UPA National Director and a practicing lawyer, to get involved again. We legally incorporated the UPA and applied for and received our 501(c) (3) not-for-profit tax status.  We got player approval to change our governance structure, so that it functioned more as a true board of directors, and drafted the first new set of bylaws in a decade.  Kathy Pufahl, who had served as National Women’s Director, agreed to be the first Managing Director of the UPA, basically handling a lot of the day to day business.  We established a small office in her family business, hired a part-time secretary, and put in a toll-free number (1-800-UPA-GET-H, with the H standing for either “Help” or “Horizontal”) to make it easier for players to get information and assistance.  And I tried to keep the “P” in UPA, informally by being accessible and writing a lot for the UPA Newsletter, and formally with the introduction of an annual questionnaire.

On the play side, there were a variety of issues that needed to be addressed.  The rules hadn’t been updated since 1982 and so the first part of each captains’ meeting at big tournaments was spent discussing and negotiating which variation and interpretation would be in effect for that event.  With increasingly aggressive play in competitive tournaments, the shortcomings of the purely self-officiated game or informal Observer system were increasingly apparent.  At all levels, field access was becoming increasingly problematic due to the difficulties and cost of procuring liability insurance.  So we introduced the Ninth Edition of the rules, improved the National Championship Tournament Series, set up the first discipline policy, created the Certified Observers Pool, and procured a field liability insurance policy that was available for tournament directors.  In the college division with long-time director Frank Revi, we established the five year rule to eliminate the perennial “club ringer” problem.  We set up an “approved disc” program run by Mark Licata, stipulating the specifications of a disc that was acceptable for play.  We also hosted the first high school national championship, introduced the first World Club Championship through WFDF, set up the UPA sanctioning program for tournaments that met minimum standards, introduced the idea of a Masters Division, and supported the development of the Juniors programs and local leagues.

After resigning as Executive Director at the end of 1990, I was on the UPA Board of Directors as Chair of the Executive Committee for two years, while the UPA office moved to Executive Director Neal Dambra’s law firm in Texas.  During this period, we took the approved disc program to the next level with the decision to designate an “official disc,” resulting in a competition between Wham-O and Discraft.  Both sponsorship packages were somewhat similar – and double the previous year’s support from Wham-O.  The historic decision to select the Discraft Ultrastar was made based on its more consistent quality.

Another major issue we addressed in 1990-91 was also in the area of sponsorship.  The most frustrating aspect of my UPA experience had always been in the area of media and sponsorship. It took me several years to sort of figure out just how the sports business in the United States is run, and it only came about after making five or six sponsorship pitches, watching a US Olympic Committee congress, meeting with several other sports’ governing bodies (such as volleyball, triathlon and rugby), and a couple meetings with big league sports marketing firms that were not fruitful.  This came to a head in 1991 when Dee Rambeau, a former Tunas and Sky Pilots player working for a sports events and sponsorship firm, proposed a sponsorship package with Jose Cuervo Tequila to the UPA.  Dee’s firm was organizing beach volleyball tournaments (the Cuervo Gold Crown Series), held in conjunction with the Association of Volleyball Professionals (AVP) — a player-run organization similar to the UPA – and wanted to duplicate it with ultimate.  Despite discussions and negotiations over a couple months, and a real attempt to figure out how to make it work, the UPA Board rejected the sponsorship. The crucial issue was Cuervo’s insistence on control over the game, including the ability to change rules they didn’t like.  They viewed the UPA as a “players union” and made it clear that they weren’t going to let the players continue to dictate playing matters.  Cuervo went on to host several events not sanctioned by the UPA.  The Cuervo series shortened the end zones to 15-yards each and lengthened the playing field to 80 yards. Games were played to 11 with time caps, and a two-point line was introduced at mid-field.  Although there were several events held in the next couple years, the arrangement was discontinued after an event in Boston in September 1992.  In retrospect, it seems this was due to several factors:  Cuervo wasn’t happy with the athletes, who were viewed as ungrateful, uncooperative with the tournament rules (refusing to wear team shirts, for example), and excessively rowdy.  They also didn’t feel that the economics were working (ie they weren’t selling enough extra product), and noted the lack of embrace by the media.

In 1992, Cindy Fisher was the first full-time hire of the UPA and the first standalone headquarters was established in Colorado.  We considered both Indianapolis and Colorado Springs given the support for amateur and USOC sports headquarters in those two cities, but felt that Colorado was better suited for ultimate.  When I stepped down at the end of 1992, the UPA had 7,200 members and annual revenues of $191,000.  Internationally, as the UPA National Director, I was chair of the World Flying Disc Federation Ultimate Committee from 1988-1992 and introduced the World Ultimate Club Championship.  I was President of WFDF from mid-1992 to 1994, focusing on many of the same organizational and financial issues we addressed with the UPA, including formal incorporation and not-for-profit status and revision of the bylaws, in addition to preparing the successful applications for GAISF (now SportAccord) and the World Games.

Some Brief Take-Aways from this Early Business Experience

  • Ideally, the business issues of sport won’t detract from the joy of playing the sport.  It is still about the FUN, or why bother?
  • As ultimate looks to expand, it will need to grapple with the demands of broadcasters and sponsors.  There is the potential for a virtuous circle where increased visibility through sponsored telecast leads to increased participation, which in turn leads to more sponsored telecast interest, which leads to  increased participation.  But it is a delicate balance.
  • Spirit of the game is still one of the defining aspects of the sport of ultimate.
  • Spectators at games are a good start but the economics of sport are in broadcast media.
  • USA Ultimate and WFDF have to be run as businesses.  What is incredible is that they basically are still player focused, while trying to advance in the areas more traditional sports federations venture.  USA Ultimate has done a great job in getting ESPN to figure out how to properly broadcast the sport of ultimate, and this may open up many interesting opportunities in the coming years.  WFDF has been recognized by the IOC, which may lead to the Olympic Games with the resources and recognition that comes with that in a couple decades.  But it doesn’t come without trade-offs.
  • There are a lot of alternatives to which people can devote their time.  Without a strong strategic business focus, it is not certain that ultimate would have grown the way it has, and it may have just dwindled to a more of a pickup game.

Issue No. 3 | Business

January 6, 2014