The nearly $17 billion youth sports industry is facing a dwindling number of registered referees. The shortage threatens to hamstring kids’ abilities to play games as schools across the nation report declines.
The Michigan High School Athletic Association, for instance, reported 12,722 registered sports officials in the 2008 to 2009 academic year, and that total fell to only 9,816 in the 2017 to 2018 season.
Many officials leave because of the jobs’ low wages, but payment speeds often determine which games the remaining referees are willing to work. Payments practices differ starkly between games, with some offering same-day cash and others making officials wait until the end of the month or even the end of the season for their funds. Lou Gaudio, who has refereed basketball for six years and umpired baseball for 15 years in New York, said that fast access to pay makes a big difference for referees.
“Whenever there are cash games [that pay same day, referees are] going to go to that game instead of a game where they’re not paid for three or four months,” Gaudio told The Journal News.
Resolving these payments pain points could be vital to helping ensure there are enough officials to maintain game schedules. Same-day cash offerings are certainly not the only innovations when it comes to making refereeing more compelling and convenient, though. Solutions providers are moving youth sports away from cash and checks, and instead offering more accessible and comprehensive digital services that aim to simplify referees’ payments.
Sports technology provider Stack Sports is taking aim at officials’ payments by designing a new solution to facilitate youth sports-related payments of all types, including compensation to referees, athlete registration for tournaments, uniform purchases and more. The offering uses a Fiserv SDK that allows payments to be sent directly to recipients' bank accounts via mobile or web-based platforms.
“Whether it’s a sports league or team or association or official, the faster they can receive and collect their money and reconcile, the better,” Stack Sports CEO Alex Alt recently told PYMNTS.
The solution is also intended to streamline related activities such as referee scheduling.
“[Officials] want to know from our software where they need to be and when, and then they want to get paid when they’ve completed their task,” Alt said.
Late payments were a problem for all facets of the youth sports industry as recently as seven or eight years ago. Use of checks, cash and paper-based reconciliation was rampant. Leagues were unable to register new players until they received mailed or faxed paperwork. Payments were often manually reconciled using spreadsheets, and the process was rife with opportunities for mistakes, Alt said.
“Anytime there are spreadsheets, there’s the possibility for human intervention and human error,” he said.
Digital offerings, such as Stack Sports’ new in-development solution, aim to reduce the likelihood of human errors and remove other pain points stemming from slow, paper-based payments and reconciliation processes. It aims to instead provide quicker, smoother processes by enabling digital payments to various youth sports stakeholders, online or via mobile app, with funds pulled directly from payers’ bank accounts and sent into payees’ accounts.
Different stakeholders have different needs, however, and it is important to provide interfaces tailored to various types of payers and payees. Some solutions must cater to participants such as parents – who may need to pay coaches – rather than officials and organizations.
Reconciliation and Automation
While digital person-to-person (P2P) payments solutions like Venmo have become popular in the U.S., offerings that focus solely on facilitating transactions don’t address all of the youth sports industry’s complicated needs, Alt said.
Some teams are voluntarily run by parents, while others are formally organized by schools or clubs that may participate in larger organizations or national governing bodies. Stakeholders, whether they are parents running teams or administrators organizing leagues, have to do more than simply accept payments. They must also manage a variety of organizational needs and track details, which could include noting which players or teams have paid dues, which referees need to be paid and more. They also need to be able to navigate between the complex apps and software that make and track payments. For instance, a league might struggle to switch between one system for handling referees’ payments and another for scheduling their games.
Stack Sports aims to tackle this problem by providing reconciliation and organization management features integrated into its payments process. This means providing features that enable organizations to schedule referees for particular games and allow automatic payments upon their completion.
“What we’re enabling is the movement of monies as a module of the software, so you’re not having to conduct completely separate processes with two completely separate products, but instead can marry the two,” Alt said. “[For example], the software application assigns, schedules and books a referee for a particular task and the payment.”
Software solutions that can remove the burdens of managing operations, as well as quickly track payments and disburse them, stand to score big with referees, players and organizations alike in the complex payments environment of youth sports.
With sports associations across the U.S. struggling with fewer available referees, technologies that can make their payments more immediate and convenient could keep them in the game and encourage new recruits.