The board of directors for the Trade Association of Paddlesports has voted not to forward a proposed merger with the Paddlesports Industry Association to its members for approval, marking the second time in two years that talks to merge the organizations have broken down.

 

“The deal is dead,” said Michael Pardy, executive director for TAPS. “Without some influx of cash this clearly made no sense. It would have required a doubling of membership fees and a reduction of services.”

 

The decision comes after an audit revealed that PIA is paying an interest rate of 30% on a significant portion of its $59,207 in credit card and line of credit debt.


 

The audit, performed by a C.P.A. hired and paid by TAPS, concluded that TAPS has a net asset value of $74,197, while PIA has a negative net asset value of $31,317. If combined, the surviving organization would have a positive cash flow in 2009 of just $3,450 after paying debt service of $18,000.

 

“The debt will need to be either paid off from the existing cash in TAPS, or it will need to be refinanced,” read the auditor’s report. “This is not so much as a result of the repayment terms-they appear to be fairly standard, as it is that the interest rates are very high.”

 

Pardy said late Wednesday that a merger could still occur if the boards of the two organizations can agree to cut services, raise dues, find a donor or some combination thereof to address the proposed organizations financial weakness.

 

In a statement released late Wednesday, TAPS said attempts by both boards to secure necessary funding from various industry members and advocacy groups have been unsuccessful so far. PIA’s members voted this weekend to approve the merger after viewing the auditor’s recommendations.   

 

“Naturally, both associations recognize the potential value of one unified trade association that can speak for and serve the needs of the paddlesports industry,” read a statement released by TAPS. “However, without a unified consensus between the two associations, the process moving forward has been dissolved.”  

The two associations will continue to direct and fund the joint “Let’s Go Paddle” campaign, an online marketing effort designed to grow and support the paddlesports market. The individual associations will also continue to operate their own events and programs as usual.