Open letter to USTA's Chairman

By Javier Palenque

Miami October 18, 2021

Mr. Mike Mcnulty

Chairman and President of the United States Lawn Tennis Association 70 West Red Oak Lane. White Plains, New York 10604

Ref: Pending issues for over 6 weeks

Dear Mike:

The purpose of the present is to once again remind you to provide me with the Corresponding data from the attachments that are included. As you well know I have requested these from Katrina Adams, Patrick Galbraith and yourself and all three (Chairmen of the world's best-funded sports nonprofit) fail to give any logical reason or answer for the stalling or lack of transparency in the data. Need I remind you that the USTA is a not-for-profit organization that when it suits it uses the charity categorization to avoid paying school taxes in Orlando, has been the recipient of government money, and has multiple Contributors. As such the organization by choice of the board has become a Public Body. A public body falls under the Freedom of Information Act and I am requesting the data of:

-?????????Participation??????????????????????????????????????????-?Investments

-?????????Rates??????????????????????????????????????????????????????- Loans outstanding

-?????????IRR on investment????????????????????????????????- Other

-?????????Comparison of investments per category (the mission and the show)

If you feel that you have the legal authority to deny the public the information requested above, that is perfectly OK with me. However, I need a formal answer, so I know your position. Let me remind you how absurd all this is and how poorly you are handling it.

Tennis parent requests to know what the participation numbers are (the mission of the USTA) for the past 15 years per zip code, age, race, and gender. Then I would also like a comparison chart (since you are a charity) between the amount invested as a charity vs the US Open Show yearly, Then I want to see how investing over $1B in stadium improvements furthers the mission if everything tells us that there are no more fans in the stadium or TV. Add to that absurdity that the contract for broadcasting is up in 2023 and since ESPN took over ratings have only been declining. Then we have the problem of the competition system that subtracts people and does not add people and the general waste in projects like Deloitte, Software, Net Generation, mandates of low compression balls, etc., All these very poorly thought out decisions have led to continuous losses from operations at the USTA in good years. Now what?

When one looks carefully at the finances (see attached) one can see that for the last five years the losses from operations are turned into profits from investment market gains. The low returns on the income of the USTA are extremely concerning and poor. They are an indication of excess fat. After Covid, the investment funds have been depleted and of course, what this means is that no more profits can be shown and the losses from operations will be even more clearly shown. This is of course a terrible situation as you face now principal and interest payments, lower revenue, still an absurd payroll volume, and no possible way of making up for the $181,000,000.00 loss in 2020 that when adjusted for only operations and not market gains, losses are a terrifying $220,000,000.00. This is the equivalent of 22 years of a normal profit from US Open or 84 years of the foundation budget (this is horrible and reveals how your mission is the US Open alone and you continuously deceive the public and your sponsors by leading them to believe that growing tennis is the mission). This is a number you cannot possibly meet, makeup and or generate. We need to see a detailed plan on how you plan to overcome this mess with the same exact team that created the problem? The solution is a new team in case this is still not clear in your mind. This of course means getting rid of all the people who failed to act in the best interest of the sport. Otherwise, it would be insanity to try to find solutions with the problem creators, don't you think? But, knowing the USTA you just may try that option as another failure of common sense.

The first big mistake was not using Covid to cut more people and to reduce the bloated salary structure. The poor investment choices like the continuous waste of player development at $23M per year with no odds of producing a player are simply absurd when kids all over America can’t play at all and there is no funding for them to make them consumers. Customer acquisition costs is a term you must learn about.

You as the head of the nonprofit must listen to new ideas and make sure that the company’s vision and mission are achieved. Well, in the first opportunity you had to listen to my ideas you told me that the board cannot possibly meet since too many people would need to be accommodated. This is not even an argument of a response coming from the head of the world's best-funded sports nonprofit with the least amount of kids and oldest adults. My request and desire were to help and show the USTA what it still fails to see, yet you denied me this opportunity to enlighten you and explain what you can’t see. Now the organization is with the burden of $220M losses that can never be made up. Chapter 11 would be a solution to the failed leadership for the past 15 years of Mr. Galbriath. The board in any organization of the world and the head are responsible for the success and failures of the entity. In 15 years thanks to your decisions (by not providing us the data that belongs to the public) we can’t see how much the mission has improved or not. We can see how low the funding is for the foundation, we can also see how the poor participation numbers are reflected in the membership dues and the failed technology efforts in a technology era. These are all decisions that have a cost to fix, lose, and makeup. They are someone’s responsibility. It is your job as the head of the charity to make sure that transparency and accountability are paramount. They need to be held accountable and know that they have failed in every aspect of their duties. Not answering, colluding, obstructing can only lead to nothing. I urge you to please reply to my simple requests for accountability so we can move to the next phase of this ordeal which is to save the sport.

I trust that you will do right by the sport as you mentioned in your video message. The mission is the only reason for the existence of the USTA, so transparency and accountability are paramount. Are you going to do what is correct or are you going to hide, obstruct, confuse and protect those that have failed the mission, when what they should have done is the exact opposite?

To conclude let me remind you, in your interaction with me all you had to do is listen to new ideas and points of view. After listening you could agree or disagree and nothing is lost especially if it is in the best interest of the sport. But, what you chose to do was the exact opposite, not listening, not opening your mind, not hearing a different point of view, and by default defending what has proven to fail and failed big time. (see below) this says a lot about your role as a leader. If you do not want to listen you cannot possibly lead. It is that simple, much less be followed and certainly not taken seriously.

Please see the mentioned attachments and kindly at the earliest possible date provide me your response to this formal request of data under the FOIA.

I trust that you will do what is honorable and correct. I remain.

Respectfully.

Javier Palenque

cc. NY Attorney General Leticia James

???Congresswoman Alexandra Ocasio Cortez