October 15, Austin, TX -- After three days of testimony, it's very obvious that the ideal situation would be to have both the U.S. Equestrian Team and USA Equestrian (the former American Horse Shows Association) continue working together. The arrangement was successful for a good part of the half-century-plus that the two have been partners. If they can put aside the acrimony that has marked the last few years, a joint approach would benefit the horse world.
The USET's strong point is its record on training, fielding and until recently, funding international competitors. Its tremendous weakness, however, is the current state of its finances, with expenses running $3.3 million or $1.9 million ahead of revenue, depending on what type of accounting system is used. Then there's the burden of having to pay back a $2 million line of credit by next June, and the fact that it is using its endowment to meet operating expenses.
USAE's pluses include its broad base in the sport, with a membership of 80,000; good finances and a record of adjudicating grievances and handling drug testing -- duties the USET would need to take on, and with which it has no experience. The minus for USAE is its lack of mileage with training, fielding and fundraising for international competition. Wait -- didn't I just say that was the USET's specialty?
So you get the point. The hearing panel seemed to, and the principals of USAE and USET are finally seeing the picture, too.
One of the keys to any settlement will be finding a way for the USET to work with USAE and still have some measure of independence. That's tricky, because the Amateur Sports Act mandates that an NGB cannot delegate any duties central to governance. So the USOC would have to figure out how to handle that, perhaps by institutionalizing something similar to the operating agreement that governed the organizations' relationship from 1997 until the Sydney Games.
The USET used the operating agreement as a weapon in its case here. The team cited it as evidence that USAE, which now holds the NGB title, was not in compliance with the act and filed a challenge of USAE status.
So you see the problem. The USET does not want to be just absorbed into USAE, feeling it needs to do the international thing its way, the way that has brought America many medals. At the same time, the USET has never really coveted (to use a word mentioned here more than once) the NGB title and all that goes with it. The mandates of the Amateur Sports Act for a single governing body caused the problem.
If the USET loses and USAE has to pick up its duties in addition to all it does now, there's no guarantee it will succeed right off the mark -- which could put a crimp in its efforts.
One of USAE's witnesses was James Host, who has prepared a marketing plan for the organization. The gist is creating a corporate revenue and bigger audience for horse sports, which he sees as an excellent vehicle for, say, CNBC "because of the high demographics of the group." All this, he contended, would "build the sport." He talked a lot about the "heroes," the horses and riders who win medals as an important component of the plan, and one reason USAE can't afford to lose the top of the competitive pyramid, where those athletes are found.
But USET attorney Mike Shaw asked, "let's say they do badly in the Olympic Games. Would that affect your plan?" "It sure would," said Host. That's another reason why USET's expertise would help USAE, which originally proposed a merger rejected by the team.
If no settlement is reached, the five-member hearing panel will have to come up with a recommendation that is passed on to the full U.S. Olympic Committee, which would act on it at the end of the month.
Here are the panel's alternatives: USET could be the NGB and according to its plan, USAE would be an affiliate. USAE could remain the NGB, and if USET chose not to join it under those conditions, it is very possible the team would fold -- as its officials have said on more than one occasion. Other possibilities include declaring a vacancy in the NGB spot and letting someone from USOC run the sport for awhile (that happened with a dispute in the bobsled ranks) or putting USAE on probation for noncompliance and ordering it to fix its deficiencies.
So why is this important enough for me to have spent about 27 hours listening to testimony over the last three days in a hotel ballroom (that's where they hold these things, and believe me, there is no dancing) instead of outside in this lovely fall weather?
We all care about horse sports; that's the reason I'm writing this and you're reading it. Our international competitors are an inspiration to those of us who ride or drive at our own speed. Isn't it great to watch the Olympics on TV and see our sport?
And a great many of the people in this country who compete in horse sports need the benefits and services of an association that can provide a level playing field (one of USAE's favorite catch phrases) and foster the game at our level.
So the fate of both these organizations is important, and their public squabbling of late hasn't helped the sport. Bill Stapleton, the very competent chairman of the hearing panel (he's Lance Armstrong's agent, by the way) had an interesting closing comment.
"It has been a pleasure dealing with the dispute, where the disputing parties have many things in common, and sometimes are even friends," he said. "We appreciate that much of this dispute is about a genuine difference of opinion by reasonable people."
I'll give you an update in my column on Friday, or at least a recap of parts of the hearing that I haven't shared in my previous stories from here. And now the bats and I are flying away (for an explanation, click here for yesterday's story.)
For Nancy's story on the first day of negotiations, click here.