In the summer of 2008, Nigel Melville led a Collegiate All-American tour to New Zealand, while Scott Johnson sought potential investors in an 'Eagles LLC'.
The trip was productive in that it would yield 20 percent of the 2011 World Cup squad. Johnson, putting aside his technical responsibilities, had no luck.
By year's end the cause of Johnson's urgency became clear. Before accepting the job of 
coaching the US national team, the Australian had been promised USARFU would launch a domestic pro league. But in 2008 the union ran a deficit of nearly $650,000, or 8 percent of the year's revenue, logging the past decade's single-worst reverse.
So why was the chief executive was spending weeks abroad while a school teacher-turned-coach was trying to drum up money? And where was the chairman of the board, Kevin Roberts, a man who leads a global business-strategy and advertising company?
The snapshot portrays the dysfunction which has loomed over the US national team these past five years.
In test rugby, management can fundamentally alter outcomes months and even years before the team takes the field. Though USARFU almost completely reconstituted its board of directors in 2006 by shifting to a smaller, 'professional' group of 'independents' (i.e., people from outside American rugby), the results are in many ways comparable to the 'amateur' cohort of the Neal Brendel-Doug Arnot years.
Personnel decisions
Before a coach chooses his playing squad, management decides on the coach. As with many other sports organizations, the position is one USARFU's best paid and arguably its highest-profile employee.
Since April 2006, the board has brought in New Zealander Peter Thorburn, Australian Scott Johnson, and Irishman Eddie O'Sullivan, at salaries as much as three times higher than just six years ago.
Such turnover has been unseen since the 1970s, when the job was volunteer. Together, the trio have logged a 12-27 test record, slightly below America's average over the past 36 years.
The first significant move was retaining Thorburn, who had taken the helm in an interim capacity in April 2006. Record losses to the New Zealand Maori and archrival Canada foreshadowed 2007's 0-7 campaign, the USA's first-ever winless season.
The longer-term cost of choosing to stay the course, in hopes of winning a pair of games at the 2007 Rugby World Cup, was forgoing time to prepare for the 2011 world championship. The decision gained heft when the International Rugby Board brought the qualifiers forward to 2009.
Canada subsequently won 2009's two-game North American series, not only forcing the Eagles to play home-and-away against Uruguay while the Maple Leafs sought out better competition in Europe, but also conceding our northern rivals a favorable pool that should have lead to automatic qualification for 2015 (until a stupefying draw with Japan combined with Tonga's upset of France cost them third place).
Johnson's tenure was so short as to be an obvious failure for all involved. The nadir was a first-ever series loss to Japan, and his legacy the temptation to shortcut domestic development by casting overseas for 'America qualified' players.
The cause of his departure, however, was the board's inability to fulfill its promises, including the national league of city-based teams, contracted players, and so on. In a contemporary interview, Johnson lamented having to ask players the age of his son to make economic and personal sacrifices without so much as the promise of 'reliable insurance' (i.e., promptly settled claims). In 2010, the issue resurfaced in the modified form of delayed payment of simple win bonuses.
The embrassment of Johnson's abrupt exit was eased by O'Sullivan's return, for this name-brand coach already knew the American landscape. O'Sullivan indeed halted the 3-year, 4-16 slide since Tom Billups' departure, debuting with a credible 27-10 loss to Ireland and winding up with a World Cup seen by many as having equaled 2003 as the union's best-ever showing. (Interestingly, the scoreline of the 2009 Santa Clara match was nearly the same as the 22-10 count in New Plymouth, New Zealand, 29 months later.)
Another part of O'Sullivan's charter was to train a group of domestic coaches. His leading assistants duly included Dave Hodges (forwards, ex-Denver Barbarians), Dan Payne (skills, ex-San Diego State and presently Life University), Matt Sherman (backs, ex-San Diego State and presently Stanford), and Mike Tolkin (defense, Xavier high school and New York AC).
O'Sullivan, who had continued to live in Ireland, cost an estimated $600,000: $161,000 in 2009 and $229,000 in 2010, according to the union's tax filings, plus 2011 (which figure is not yet available). Meanwhile, USARFU's 2010 revenue plummeted 21 percent to $6.4 million, with events totaling just $152,000. O'Sullivan salary, like Johnson's pro league, was out of scale.
Operating decisions & strategic partnerships
Event revenue, along with broadcast fees and logo merchandise, are primary business opportunities created by a strong national team. Seeking to whet America's appetite for big games ('to help America fall in love with rugby'), Roberts personally campaigned to bring a 2009 Bledisloe Cup contest to Denver. The gamble would have been USARFU's biggest since Brendel's disastrous push to launch the USA 7s, which after exhausting the union's reserves was sold at a deep loss in 2005.
The Bledisloe terms were so advantageous to Australia and New Zealand, the competitors, while so onerous to USARFU that no less than David Moffett, past chief executive of both the New Zealand and the Welsh unions, saw fit to publicly blast the idea. Hong Kong eventually won rights to stage the contest, and made a loss. The American union dodged a bullet, but the episode called into question the board's approach to growth via test rugby.
Following the 2010 collapse of the Churchill Cup, the union's long-term test schedule is uncertain. While matches against Canada and similar countries will be readily available, and NBC's interest in Olympic 7s translate into opportunities for USARFU's senior team, America, like every other 'tier 2' nation, is reliant on visits by so-called foundation unions (Australia, England, Wales, etc.). But the top teams want to play each other, and in the past, the IRB's so-called master schedule has been unstable.
Unlike events and broadcast, apparel directly impacts other USARFU teams, such as the 7s Eagle or the All-Americans. The board's 2006 decision to abrogate its 2004 agreement with Kooga prompted the vendor to sue for damages of $900,000, which could be tripled if USARFU loses the ongoing case.
The strategic intent of ending the Kooga pact may have been to obtain a better deal after a strong showing at the 2007 World Cup. If so, the gamble failed. The national team has since wandered through several sponsorships, the lowlights including Johnson's having to buy Canterbury kit from a Japanese retail store in November 2008, the miserably designed jersey seen in the 2011 Churchill tournament, and the general mayhem of the 2011 World Cup.
In 2009, legal fees related to the case cost approximately $20,000. This year's bill contributed to a meaningful budget overrun in national office operations, according to a report sent to the USARFU congress, the other factor being an ongoing audit by the US Department of Labor.
Two of the most important sponsorships won during the Roberts-Melville administration were essentially windfalls. The National Guard deal came through a rugby parent, and lasted just two seasons. The Emirates deal was forced on the air carrier by the IRB, according to people familiar with the matter.
USARFU's business development has been predicated more on selling services to its membership, such as the mandatory purchase of a Zurich medical insurance policy that comes with registration, rather than the large brand partnerships. The record is particularly meager for the Saatchi & Saatchi chair, and the upshot is the team (and the union) remains penurious.
The outstanding exception is achieving full US Olympic Committee membership, which has yielded real benefits for the 7s team and promises future leverage for the senior team. Vice chair Bob Latham, who has worked with Colorado Springs-based organization since USARFU gained associate membership in 1998, along with Melville and 7s coach Al Caravelli led the push for recognition before the 2012 Games.
Yet even here, such breakthroughs as San Diego residency stipends are an outgrowth of the IRB's campaign to admit 7s to the Summer Games. And the lion's share of the commercial benefits is being captured by the USA 7s, not USARFU.
Chairman Roberts previously declined to comment on questions regarding this series. Melville, the chief executive, did not respond to request for comment.
Unexecuted priorities: Player contracts and a pro league
While not every decision can be expected to succeed, the board controls the priorities of the union and so the national team. Over 2007-11, the objectives at the top of its list, player contracts and a professional city-based league, went unfulfilled.
The purpose of contracting national teamers is to establish rugby training as the athlete's priority. The problem is the union's inability to pay wages enough to supercede the minimum concerns of young men in their 20s.
In 2008, at the start of the four-year World Cup cycle, USARFU inked Todd Clever and Chris Wyles. 'We will contract another dozen this year', Roberts said in an interview with Rugby Magazine. It never happened. The following year, Melville said the union would be offering contracts to 7s players. Same outcome. For a fuller treatment, see 'The USA national team, 2007-11: Part 1 -- Professionalism, the god that's failing'.
Newly announced USOC funds for 7s players to reside in San Diego, obviously a welcome step, by themselves look to be so small as to require additional monies. They will not, by the very purpose of geographic concentration, underpin the city-based league, an objective which featured in USARFU's strategic plans of 2006 and 2009.
Aware that it did not have the money to initiate a pro competition, in August 2008 USARFU announced that the following year would see the return of a senior all-star championship in a four-team, springtime format. In January 2009, when Melville publicly acknowledged that USARFU's efforts to professionalize the national team would be sidelined, he indicated that 'I am hoping to combine the [North America 4] with regional selection and competitions this year'.
The stalled plans have been all the more evident since the CBL is to replace the rump NA4, now called the Americas Rugby Championship and based in Argentina, and the lapsed National All-Star Championship, the imperfect but functioning territorial competition. (For a fuller treatment, see 'The USA national team, 2007-11: Part 2 -- The development maze'.)
From the start of their tenure, Roberts and Meville acknowledged that the union's budget would have to grow to $20 million, mainly via new sponsorship and investments, in order to accommodate its plans. Revenue crested at $8.1 million in 2009, while the overall financial picture turned for the worse a year earlier.
To a degree, the downward trajectory can be attributed on the soft economy. Certainly the union has 'lost' money because unfavorable changes in the sterling-dollar exchange rate have diminished the value of IRB subsidies.
In light of the growing sponsorship deals and sales logged by the USA 7s, however, the economy cannot be completely responsible for the union's failings. Nor can too much blame be laid on the union's business development director, who left unhappily in April 2009. In a meeting, Roberts had admonished the fellow that he did not feel obliged to share his contacts, according to people familiar with the matter, a stance that seems to contradict the purpose of the board's taking on independent directors with business and banking resumes.
The national team and indeed the whole organization has increasingly relied on registration, formally known as the Club and Individual Participation Program (CIPP). Boosted by a 2006 price hike, dues' proportion of gross revenue has grown from 29 percent in 2003, Arnot's first year at the helm; to 38 percent in 2006, the debut of the Roberts-Melville administration; to 45 percent last year. (The 2011 CIPP increase has improved cash flow, according to the national office, but not yet been recorded in tax documents.) The overall decline in revenue combined with the increasing reliance on dues suggests the likelihood of the board's achieving national team priorities has been receding.
Conclusion
Athletes can and sometimes do achieve in spite of management. But it is unusual, usually not for long, and certainly not what it should be.
In evaluating 2007-11, every source of available evidence, from planning documents and press releases to executive reports and congressional briefings to tax records, combines to make clear the Roberts board's focus on the Eagles. Failing a secretly held, radically new strategy, so it should be. All of the world's leading unions rely on test rugby to generate business and subsidize recreational participation. Despite America's much smaller balance sheet, here too the model worked through most of the 1990s and half of the past decade, without dues money or IRB grants.
But the formula requires entrepreneurial rather than corporate management, the practical application of American sports characteristics to international rugby (not the other way around), and independently generated revenue sufficient for the national team not only to pay for itself but also to throw off cash. Instead, the Roberts-Melville years have been characterized by unthinking embrace of Commonwealth strategies and development models, half-hearted initiative, and increasing reliance on dues revenue, serving to reallocate resources away from the grassroots. It can be little surprise that school-age and college participants, busily creating local growth opportunities, are restless.
After Tom Billups' finale, the US ranked 14th in the IRB standings. USARFU then overhauled its board, twice reset its priorities, and redefined its vision for elite player pathways. The Eagles stood 18th following Peter Thorburn's last game, 19th after Scott Johnson's exit, and 17th at the end of Eddie O'Sullivan's tenure.
The past five years, spanning two World Cups and the birth of Olympic 7s, demonstrates that transforming the US national team's performance as well as USARFU's commercial prospects first of all requires board-level improvement. The management team has been far less accomplished than the Eagles on the field, and effective change will require more than simply hiring an American coach.
