Payroll, Insurance, Government Relief: Recapping our NextUp Town Hall on Finance Management During COVID-19
As we continue to feel the economic impacts of the COVID-19 pandemic, we know that you’re probably spending most of your day thinking about how to cover your expenses and make sure your players have an organization to return to when all of this is over. So we put together a panel of industry-leading experts for our second NextUp Town Hall on finance management—discussing all things payroll, insurance, dispute resolution, and diving into the government relief bill that recently passed the Senate. Here were some of the highlights.
Panelists, clockwise: Jennifer Pivnick, President, US Sports Club Insurance; Sarah Natchez, Chief Operating Officer, Super Soccer Stars; Mitch Storch, Founder and General Manager, Hoop Heaven; Israel “Izzy” Klein, Co-Founder and Principal at Klein/Johnson Group and Former Aide to Senate Minority Leader Chuck Schumer; Paul Mastrocola, Partner & Co-Chair, Business Litigation and Dispute Resolution at Burns Levinson
Help is on the way.
Izzy Klein took some time to walk attendees through the recent economic stimulus package, the CARES Act, that was recently passed to provide emergency support to individuals and businesses. The important takeaway for organizers: the government is doing everything they can to incentivize you to keep your staff employed and on payroll for the next three months. If you are able to do so, the loan that you receive as part of this package may be forgivable. To learn more about the CARES Act and how it applies to you, check out this blog post.
You can still generate revenue if you’re willing to get scrappy.
Sarah Natchez explained that while the Coronavirus has forced Super Soccer Stars to make some incredibly difficult decisions around personnel, the pandemic has changed her business for the better.
“I’m not trying to sugar coat it and pretend that there’s not real pain. But this has forced us to think differently, and brought initiatives that would have taken 2-3 years to implement to the forefront. It has forced us to be efficient. And as we move forward, it’s what will put us at the forefront of digital innovation.”
In just a few weeks, Super Soccer Stars has completely changed their business model, pivoting to a totally online offering with a digital suite of products. When practices and games are able to resume, these virtual programs will continue to diversify their revenue stream. The reception has been incredibly positive, Natchez says. “Players are making soccer balls out of tee shirts and goals out of cardboard boxes!”
If you’ve built goodwill with your community, now’s the time to lean into it.
Unless you have a clause in your player contract that explicitly addresses your refund policy when it comes to unforeseen situations like the one we’re in, your customers have the right to request their money back now that their season has been put on hold. That being said, Paul Mastrocola says, this is the time to lean into the goodwill you’ve built. Tell your customers that these funds are helping you keep your business afloat and make sure that there’s an organization for players to return to when this is over. If they won’t budge, work with them to delay payment like you would with your bank or your landlord.
Make sure you’re protecting yourself.
According to Mastrocola, there are a couple of important things to keep in mind. First, be careful about reclassifying employees. You may be wondering, for example, if you can turn a full-time employee into a part-time employee, or turn a part-time employee into an independent contractor, in order to give yourself a little wiggle room with payroll. “You run the risk of opening yourself up to litigation if it looks like you’re doing one thing for one group and another thing for another group,” he says. The same goes for adjusting compensation. “Any reductions should be made across the board with a standard percentage. You don’t want to get into a situation where there are different classes of employees getting different pay cuts. People can make allegations of disparate impact.”
Throughout the Town Hall, we received more than 80 questions that we’re continuing to answer in our NextUp industry group on Slack. We invite you to join the conversation and share more questions there. More details on how to join can be found here.
If you’d like to register for an upcoming virtual event, please visit events.leagueapps.com.