USA Gymnastics Bankruptcy

As a result of the over “100 lawsuits filed by more than 350 Nassar survivors” and the United States’ Olympic committee’s plants to strip USA gymnastics of its “national governing body” status, USAG has filed for Bankruptcy. USA Gymnastics has been under fire during the past two years due to their attempts to cover up Larry Nassar’s rampant sexual abuse of American Gymnasts. Larry Nassar was a longtime physician for USAG and Michigan State. USAG failed to protect its athletes from Nassar’s action despite being fully aware.

Kathryn Carson, the chairmen of the USAG board, claims, “Our primary reason to do this (file bankruptcy) is to expedite those survivor claims.” Additionally, USAG emphasized that the claims will be paid by USAG’s insurers because the federation does not have the necessary assets. In contrast, John Manly, an attorney for many of the survivors, said “Today’s bankruptcy filing by USA Gymnastics was the inevitable result of the inability of this organization to meet its core responsibility of protecting its athlete members from abuse," This idea is supported by the fact that Michigan Stated took a $500 million settlement in order to move on from the Nassar issue.

The largest repercussion of USAG’s mishandling of the Nassar case and the main reason for filing bankruptcy is that the United States Olympic Committee plans on revoking USAG’s national governing body status. The USOC’s main rationale behind their decision is that a “national governing body must have the capacity and capability to provide the support, protection, and services that we expect for all Olympic athletes in the United States” and that USAG did not achieve these requirements. USAG attempts to appeal this process because their success and revenue are based on the NGB status. Without this status, USAG will be a meaningless organization on an inevitable decline.

USAG is the perfect example of a monopoly. They control all gymnastics competitions (except for NCAA competitions) and the entire certification process within the United States. More specifically, they were an unregulated monopoly. Their marginal costs for running the projects were next to nothing. Yet they were able to charge incredibly high prices because of the high demand for women’s gymnastics. All of this was because the NGB status prohibited anyone else from being a true competitor. Despite this ideal business model, USAG was so corrupt that they jeopardized their NGB status. USAG has acted so immorally and stupidly that they were able to go bankrupt as an unregulated monopoly.