The International Equestrian Federation (FEI) has said it expects to make a loss of CHF8.23m (€7.7m/$8.7m) in 2020, but that the financial impact of the Covid-19 pandemic does not threaten the existence of the sport’s world governing body in the short to medium term.
The FEI outlined its financial status at a board meeting held this week via videoconference. A revised budget for 2020 was presented detailing the cost-saving measures put in place to date, as well as future plans to counteract the loss in revenues caused by the pandemic and the major disruption to the sporting calendar.
In April, the FEI said that it expected to lose between €6m and €7m because of the impact of the global sports shutdown prompted by the pandemic.
The projected loss has now been revised slightly upwards with the FEI stating an estimated reduction in total revenues of CHF26.62m. Following the postponement of the Tokyo 2020 Olympics by 12 months, this does not include the International Olympic Committee (IOC) contribution normally distributed in an Olympic year.
However, the FEI said the loss in revenues was offset by a “rigorous reduction” in total expenses of CHF20.75m, including temporary unemployment measures for staff as well as the postponement or cancellation of all non-essential projects.
Savings of CHF6.5m were ensured by the review of budgets and reductions in expenditure. A further CHF1.5m in savings by the end of the year is estimated as a result of 60 per cent of FEI staff being on temporary partial unemployment subsidised by the Swiss government. All senior management also volunteered to take a salary cut until the end of 2020.
Claude Praz, the chief financial officer at the Lausanne-based international federation, said that, while the overall loss was important, it does not threaten the short- or medium-term existence of the federation. He said that the FEI would continue to seek cost-saving measures to ensure minimal draw on its reserves.
The loss at the FEI is indicative of several international federations which have seen their calendars decimated and face cash flow issues with a wait to receive their Olympic revenues. The FEI is in in a stronger position than some, however, due to its cash reserves and the fact Olympic monies make up only about seven per cent of its overall revenues.
Fielding a question from SportBusiness, the Association of Summer Olympic International Federations (ASOIF) said last week that it did not anticipate that international federations would face bankruptcy thanks to a combination of financial support and reserves being put in place.
A 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.
Ahead of the coronavirus outbreak and the spate of cancelled FEI events, the FEI had projected total net revenues of CHF68.4m in 2020. This included a budgeted figure of CHF15.4m in Olympic revenues.
Outlining its projections at November’s FEI General Assembly in Moscow, the FEI budgeted for a total of CHF30.2m in commercial revenues in 2020, with the CHF27.1m (or 89.7 per cent) from sponsorship revenue and CHF3.1m (10.3 per cent) from broadcast revenue.
FEI Endurance World Championships postponed
The FEI has already seen more than 800 events of various shapes and sizes cancelled or rescheduled due to Covid-19, with the latest victim being Italy’s 2020 Endurance World Championships.
The Championships were due to be held at San Rossore, Pisa in September, but the FEI said the pandemic and the restrictions on both travel and training of horses has meant it is not possible to maintain the original date. It has now been postponed to May 2021.
FEI secretary general Sabrina Ibáñez said: “Our endurance community made it very clear to the FEI that they want a World Championships, particularly after losing the last edition at Tryon in 2018, but horse welfare and a level playing field could not have been guaranteed if the Championships had run in September, so it was the best solution to move the Championships to May of next year.
“Having consulted with the national federations that compete in endurance, we now feel that we have reached a compromise that works for everyone, but especially for our horses, as there will now be time for them to do the necessary preparation work and achieve their qualification for this major event.”
(additional reporting by Martin Ross)