USGA cashes in on COVID-19 insurance claim & more from its 990 filing

LOS ANGELES – In 2020, COVID-19 tried its hardest but it could only postpone the U.S. Open, not cancel it. The 120^th U.S. Open, which was won by Bryson DeChambeau at Winged Foot in New York, was held in September rather than June. Things were somewhat better a year later when the national championship was contested at Torrey Pines in June. Still, the USGA took a bath on its big moneymaker – due to limited or no tickets, merchandise and corporate suite sales.

Or did it?

The USGA is a non-profit organization whose mission is to champion and advance the game of golf. As previously reported by Golfweek in 2020, the U.S. Open generates $165 million in revenue annually, or about 75 percent of the USGA’s total revenue. That money funds among other things, the 13 other national championships the USGA conducts annually. But a portion of the losses associated with the COVID Opens was offset by the USGA’s insurance against such an event. According to its 2021 Internal Revenue Service Form 990, the USGA filed an insurance claim for business interruption and received $29.5 million in 2020 which helped it continue core services and the cost of conducting a limited number of championships, in spite of a significant loss of fan-based revenue.

In 2021, the alteration of the U.S. Open fan/hospitality experience due to California COVID law restrictions led to the USGA being paid $25.5 million based on the validity of the claim and the estimated claim total value by Sentry, which also is one of the USGA’s corporate sponsors.

“We were way down,” said John Bodenhamer, the USGA’s senior managing director of championships, of U.S. Open revenue during COVID years. “But the one thing we had was business interruption insurance. Several years ago, our organization through great leadership decided to purchase that. At the time, there was a lot of skepticism why we needed it. Everyone used to think we were crazy. Now everybody’s patting themselves on the back.”

But it does beg the question: Why does a non-profit 501-C3 need to file a claim with about $740 million in net assets, according to its 2022 filing?

Susan Pikitch, the USGA’s chief financial officer, who earned approximately $725,000 in 2020, was unavailable to speak to Golfweek last week but responded to multiple email questions.

“The USGA currently has approximately $400 million in reserves that our Finance Committee recommends as a fiscally responsible best practice. That $400M represents less…