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ASOIF: International federations well placed to stave off bankruptcy

Tokyo 2020 logo displayed behind cherry blossoms in Tokyo on March 30, 2020 (Photo by KAZUHIRO NOGI/AFP via Getty Images)

The Association of Summer Olympic International Federations (ASOIF) said today (Tuesday) that it does not anticipate international federations will face bankruptcy thanks to a combination of financial support and reserves being put in place.

Loan facilities are being offered by the Swiss government (for federations based in Switzerland) and the International Olympic Committee to ease cash-flow issues caused by the 12-month postponement in Olympics revenues payment and the postponement or suspension of events amidst the Covid-19 pandemic.

Asked by SportBusiness if the financial aid would be sufficient to ensure the stability of all international federations, ASOIF executive director Andrew Ryan was upbeat.

He said: “When we look at this, we do not believe there are federations that would go into bankruptcy or insolvency at all.

“The facilities on offer from the IOC, the Swiss state and other opportunities for those based outside of Switzerland should be sufficient to see them survive.”

Ryan, who was speaking as ASOIF today unveiled its third review of international federation governance, added: “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.”

Ryan noted that at the start of the Covid-19 crisis, ASOIF projected that the most financially exposed international federations would be those most dependent on the Olympic revenues.

However, after scrutinising the federations’ accounts, ASOIF realised that the most vulnerable were those which generate significant revenues from their own events that had been postponed or cancelled as a result of the pandemic, and not those who had the greatest dependency on IOC monies.

He remarked: “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 [US] 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.

“But for big professional sports like tennis, volleyball, cycling and so on, they are much more vulnerable because their own events have either been postponed or even cancelled.”

Ryan said that the summer sports international federations’ average dependency on IOC revenues has dropped from around 45 per cent at the Sydney 2000 Olympics (a figure that excludes Fifa) to 30 per cent at Rio 2016 with the federations’ own commercial revenue streams on the rise.

He also praised the financial support for those federations based in Switzerland, including a partial unemployment benefit scheme he described as “substantial” and interest-free loans of $500,000 (€443,720) for those federations whose turnover size allows it.

Ricci Bitti: “International federations solid enough to survive”

ASOIF president Francesco Ricci Bitti today also expressed his confidence that the international federations could ride out the financial turbulence caused by Covid-19.

He said: “In general, obviously 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.”

He maintained that the international federations can overcome the situation “better than other categories of people in sport”.

Ricci Bitti said recently that around two thirds of the Switzerland-based international federations had taken up the loan offer.

The loan system was announced by the Swiss government on May 13 with the aid part-covered by the IOC, which is based in Lausanne. In addition, the IOC is providing repayable aid of up to $150m to international federations, National Olympic Committees and “IOC-recognised entities”.

The 32 international federations that are part of the Tokyo 2020 sports programme – regardless of where their headquarters are based – qualify for support from the IOC’s scheme.

Switzerland’s loan programme for international federations is being covered in a 50-50 split by the IOC and the federal and cantonal authorities. The repayable aid scheme is not available to the IOC itself, Fifa or Uefa given their existing financial clout and reserves.

The Zurich-based Fifa, which had cash reserves of $2.74bn according to its latest accounts, has announced its own $150m emergency package for its 211 member national associations.

Only international federations in summer sports qualify for support through the IOC’s own initiative but Thomas Bach, the IOC president, said last month that the body remains “in consultation” with Olympic winter sports federations. The $150m package does not mean that the IOC will no longer consider cash advances to international federations, according to Bach. He said that the IOC was “very well advanced” in discussions about assisting the different sports.

The Lausanne-based International Canoe Federation recently approved different budget scenarios in response to the Tokyo 2020 postponement, including the possibility that the Olympic Games do not take place in 2021 at all.