ASOIF: Loans and reserves should stave off bankruptcy threat for IFs
By Jonathan Rest
Senior officials at the Association of Summer Olympic International Federations have expressed confidence that all 28 permanent members will be able to ride out the financial turmoil caused by the coronavirus pandemic that has resulted in the Olympic Games - their big pay day - being delayed by a year.
Andrew Ryan, executive director of ASOIF, said the loans on offer to governing bodies, coupled with prudent financial planning, should stave off the threats of bankruptcy, albeit he warned Covid-19 had caused "serious problems."
Last month, the International Olympic Committee set aside a $150 million "aid package" to help international federations, national Olympic committees and other stakeholders cope with the postponement of the Olympics to 2021, while the Swiss government made repayable loans part-covered by the IOC available to international sports bodies based in Switzerland.
Ryan said: "The facilities on offer from the IOC, the Swiss state and other opportunities for those in Switzerland have been excellent, and many IFs have taken advantage of that... We do not believe there will be IFs that go into bankruptcy or insolvency at all. The facilities on offer should be sufficient to see them survive.
"This is partly due to their prudent preparation by having reserves in place. But that does not mean there are not serious problems and we have to get these events back up and running and deliver a successful Olympic Games next year in Tokyo to be sure we’re safe."
ASOIF president Francesco Ricci Bitti added: "In general, Covid-19 has caused cash-flow problems. For small federations very dependent on the IOC contribution and also big federations with lots of missing income from big events.
"Talking about the future, I believe that we are solid enough to survive this. Obviously, this depends on the length of the trouble. This is an unprecedented challenge with a very different kind of hit to all of the sports organisations."
Ryan said that when the pandemic first started hitting the international sports calendar, ASOIF thought the most exposed federations would be those more dependent on Olympic revenues but it soon became apparent that the "big professional sports like tennis, volleyball and cycling are much more vulnerable" because they generate significant revenues from their own events, which have been postponed or cancelled.
He continued: "When we look at the smaller federations, most have built a small operational reserve. If you find there are federations with more than 90 per cent dependency on Olympic revenues, those federations very often have very few employees but also have a reserve of some millions of dollars.
“This means that with minimal support, they’ve been able to guarantee that they can carry on business as usual, without dropping their investment in development, right through to the games next year."
ASOIF members' dependency on Olympics revenues has dropped from an average 45 per cent at Sydney 2000 to 30 per cent at Rio 2016.
Regardless of where they are headquartered, the 32 international federations that are part of the 2020 Olympics sports programme - 27 permanent ASOIF members (boxing's AIBA is excluded as it is suspended by the IOC) and the five additional sports for Tokyo - qualify for support from the IOC’s scheme, and Ricci Bitti said recently around two-thirds had accepted the loan offer.