New light has been shed on the USA Cricket Association's financial status with the revelation that the organisation was more than $3 million in debt at the end of the 2012 financial year, a 59% rise in debt compared to 2011. One of the major contributing factors to the mounting debt was a series of legal battles that resulted in more than half a million dollars paid to the board's defence lawyers in 2012.
The data comes from USACA's 2012 tax return, which had a government filing deadline of November 15 2013 - after two deadline extensions on April 15 and August 15 - and was made public by the board on February 10. USACA reported $378,020 in revenue in 2012, which was down 42% from the $648,798 in 2011. However, they spent more than their 2011 revenue, and nearly double their 2012 revenue, in legal fees for the 2012 calendar year.
USACA paid $660,743 in legal fees in 2012, including $629,879 to McGuire Woods, a firm enlisted by the board to help stave off a federal court battle spearheaded by USACA presidential candidate Ram Varadarajan over the legality of the general elections in 2012. The board had disenfranchised 32 member leagues in the lead-up to the election, most of whom were expected to vote for Varadarajan instead of the incumbent and eventual winner Gladstone Dainty. The two sides eventually reached an out-of-court settlement with undisclosed terms.
USACA was also engaged in a legal battle with the North American Cricket League. USACA and NACL had clashed after the American board spurned NACL to establish a partnership with New Zealand Cricket in 2010 and form Cricket Holdings America. Former executive secretary Kenwyn Williams also initiated legal proceedings against USACA, after he was dismissed in November 2012. His case, a $1.5 million suit, was eventually dismissed in 2013.
In the wake of the disenfranchisement of two-thirds of the member leagues ahead of the 2012 election, USACA has repeatedly claimed that the 32 leagues that were stripped of voting rights, due to not being "members in good standing", were still officially members. On its website, USACA states that as of 2012 it has 51 member leagues. The evidence in the 2012 tax return contradicts that. Membership dues in 2012 totaled just $68,959, down 47% from the $128,816 that USACA received in similar payments in 2011. It also means that USACA spent almost 10 times more on legal fees than they received in membership revenue in 2012.
Spending on domestic competitions, used to prepare and evaluate players for the national team, also dipped sharply. USACA spent $112,505 on domestic tournaments in 2010, the last year that full-fledged national U-15, U-19, men's and women's championships were held. That figure dropped to $76,000 in 2011 and was down to $46,487 in 2012 when USACA's only domestic championship was a single 50-over match between Eastern and Western Conference teams in Florida that November.
USACA's total debt went from $1,899,368 at the end of 2011 to $3,023,280 in 2012. The USA national team's on-field activity was cut in half from six ICC tournaments to three, resulting in a dip in tournament costs from $640,050 to $364,010 from 2011 to 2012. Development spending stayed somewhat steady, dipping only slightly from $72,985 to $68,522 from 2011 to 2012.
However, there is little evidence that USACA used any development money to construct pitches or other infrastructure in that time frame. Equally mysterious is the salary of Robin Singh, the USA national team coach. The money listed under "salaries and wages" on the tax return, $106,742, does not account for Singh but names two officially listed employees of the board - then general manager Manaf Mohamed and a USACA administrative assistant.
In 2010, USACA had announced the signing of a deal with Podar Enterprises, Top Bloom, Neil Maxwell's Insite and New Zealand Cricket to form Cricket Holdings America. At the time the deal was signed, USACA stated they stood to gain $10 million over three years as part of shares gained from a planned Twenty20 professional league to be launched in the summer of 2012. However, the proposed Twenty20 league has failed to materialise and USACA has since spiraled further into debt instead of getting closer to the financial solvency that the agreement initially promised for the organisation.
ESPNcricinfo contacted USACA chief executive Darren Beazley seeking comment on findings in the 2012 tax return. Beazley directed all questions to USACA treasurer John Thickett due to the fact that Beazley's tenure at USACA only began in 2013. An email and multiple phone calls made to Thickett by ESPNcricinfo went unreturned.
Peter Della Penna is ESPNcricinfo's USA correspondent. He tweets here