Early Wednesday morning, Joline Esparza, owner and founder of the JL Racing rowing apparel company, began gearing up her stalled operation and preparing again to be a vendor at USRowing regattas.
JL, along with other traditional and popular rowing vendors, had been banned from attending USRowing-owned regattas by the exclusivity terms of a sponsorship deal between Nike and USRowing that Tuesday were determined by the association's board to be non-binding.
"We have a lot of work to do to reallocate our internal resources to meet the challenge," Esparza told row2k today. "We had geared down, because (the vendor ban) would have had that much of an impact. We couldn't throw the same production weight into our summer. But the gears are now switching."
She is not the only one with work to do and significant challenges to face.
As she was speaking, attorneys representing the USRowing Board of Directors were in active discussions with representatives of Nike and its licensed distributor, Athletic Performance Solutions (APS), to unravel the problems and issues the deal has created for just about all parties involved.
The problems, sources privy to the situation told row2k on Wednesday, may be heading toward litigation for a determining resolution. There remain many unanswered questions facing the future of the association and its leadership - questions that have become even more pressing since the Nike deal became public.
The sources noted that several elements are under close scrutiny, including the details of the actual terms of the Nike deal, who brokered it and led the negotiations, and if it had ever been officially authorized (or even reviewed) by the USRowing Board of Directors in the first place.
One source said that "the board never saw the documents," had never been informed of the specific terms of the deal, and had not been given the opportunity to approve the agreement before it was signed.
As a result, and because USRowing is a not for profit organization governed by a Board of Directors, the determination was made in consultation with "outside counsel" that without the board's approval of the contract, or examination of the documents, the deal is not binding specifically as it relates to any exclusivity clause.
The ordeal is the most recent public disruption of the governing body for rowing in the U.S. since the formation of a task force convened to examine the causes of a poor showing at the 2016 Rio Olympic Games and the problems the association faces moving into the new Olympic cycle.
The report and the process of the task force examination resulted in significant consternation among board members about the leadership at USRowing, and led to the January resignations of four board directors and the end of former CEO Glenn Merry's term as the head of the association staff.
The turmoil within USRowing has left the association with a leadership vacuum, the sources said, and the resulting lack of board review of the Nike sponsorship deal may consequently render the deal even less binding.
In the wake of a public outcry on social media brought on by news of the Nike deal and the fact that it barred any direct, on-venue competition from other rowing apparel vendors, and the ensuing emotional Facebook posting on the JL Racing page, USRowing staff and board members were barraged by telephone calls and emails demanding answers and explanation.
The board let very few details of its review of the situation become public, which only led to the building pressure until Tuesday afternoon when news began circulating that Beth Kohl, USRowing Chief Marketing Officer, was leaving the association at the end of the week and that the banned vendors would be allowed to attend the USRowing regional and championship regattas.
In response to row2k inquires, USRowing issued this statement late Tuesday night: "US Rowing has received a number of inquiries regarding reported deal terms with a Nike licensee, APS (Athletic Performance Solutions).
"After conferring with outside counsel, we believe that USRowing is not under any obligation to APS that would preclude vendors from being present at any USRowing events. Our lawyers will continue to advise and we'll update you on any new developments. We remain committed to our mission of fostering community, cultivating excellence and developing Olympic Champions."
The statement was also sent by email from the USRowing board to the effected vendors, which Esparza said was followed up on Wednesday by a personal phone call from acting USRowing CEO Susan Smith.
"Her message was she was pleased to welcome us to the USRowing events, and she conveyed her understanding of how frustrating things have been," Esparza said.
Esparza said she has been in weekly contact with board members, and Smith, but never really received detailed answers.
"I took at face value that they couldn't tell me any more," Esparza said. "During those conversations, Susan had made it clear that people on her end were working hard to unravel what has happened, but she couldn't say any more and probably still can't."
Details of the ongoing discussions between APS and USRowing would likely remain confidential as long as there is a potential for litigation, sources said yesterday.
However, one source said there was no effort by the board to enforce a "gag order," or "hide anything. We just couldn't say anything while we were determining what happened."
According to the sources that spoke yesterday, the deal was negotiated with the board's knowledge, but that it was signed and agreed to without the board members ever having been given a chance to review contract documents containing the specific terms.
"The board never saw any of the documents," the source said.
According to USRowing bylaws, the minutes of every board meeting not conducted in executive session must be posted to the association's web site. Mentions of an ongoing negotiation are included in those posted minutes, beginning with the minutes of Feb. 22, when it was reported that negotiations with an apparel supplier, not named in the posted minutes, "are ongoing, and it is hoped that they will wrap up this week."
In the minutes of the March 18-19 weekend board meeting held in Princeton, N.J., Kohl is quoted giving specifics of ongoing sponsorship opportunities being negotiated, and Nike is mentioned by name.
"Beth Kohl reported on the status of negotiations regarding the Nike sponsorship and apparel contract, as well as other possible sponsorship opportunities, including eyewear, television and a nutrition program. Fall 2017 will begin the rollout for the road to Tokyo." The last two meeting reports posted on the USRowing web site state "that a document was signed by Beth Kohl and Athletic Performance Solutions. Board members expressed concern that the Board was not given a copy of the document or complete adequate information about its terms. Additional discussion was held regarding organizational cost controls."
The most recent meeting minutes, dated April 5, state that the board is "working with counsel to determine the organization's options." The minutes also detail that the association is suffering from a revenue shortfall resulting from a loss of sponsorship revenue and support from traditional donors.
The document included details of a staff and benefits reductions, a hiring freeze, and budget reductions to address the revenue losses.
"On the expense side, many expenses have been decreased to reduce the budget shortfall. It was agreed that this budget discussion does not constitute a commitment to all of the expenses currently reflected on the spreadsheet, which will be examined in great detail on an ongoing basis," the minutes state.
"Six USRowing staff positions remain on hold and will not be filled in the near term, and actual starting dates of the CEO and men's head coach will further impact expenses. Numerous other costs have been reduced, though a shortfall remains."
The Board minutes and other documents can be found here.
As the examinations and decisions concerning how to shape the future of USRowing - including a search for a new CEO, men's head coach and whether or not to fill other high-level positons currently left vacant, including marketing director and communications director, there is renewed hope among the rowing community that a positive reshaping of the association will come from the disruption and turmoil in play since January.
"In general, I am feeling positive," Esparza said. "I think this is kicking things into motion that might have otherwise have laid dormant for a while and, just being one hornet in the nest, I feel I can go about my work now.
"Being able to go to events is huge," she said. "And now we start the work of building back up. Over the last month, we have had to change our direction and pull back on plans and redirect resources. And so now, it is a complete change of direction.
"The big picture is, I am so thankful to the people that have helped with advice and are calming and supportive, and now that things have been stirred up, I'm looking forward to seeing what (the board) can do."