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FEI expects ‘€6m to €7m’ loss from Covid-19 effect

Ingmar De Vos, FEI president (r) & Matthieu Baumgartner, vice-president of FEI Top Partner Longines (l)(Pierre Costabadie/Icon Sport via Getty Images)

The FEI, equestrian sport’s international federation, stands to lose between €6m ($6.5m) and €7m because of the impact of the global sports shutdown prompted by the Covid-19 pandemic.

The loss is indicative of several international federations which have seen their calendars decimated and face cash flow issues with doubts around when they will receive Olympics revenues. The FEI is in a stronger position than some, however, due to its cash reserves and as Olympic monies make up only about 7 per cent of its overall revenues.

Ingmar De Vos, the FEI president, told L’Équipe: “These are difficult times. We have already had to cancel 400 contests and we do not know when we will be able to start up again.

“The loss could be €6m or €7m, if the season resumes in July-August.”

In terms of steps taken, the FEI put 60 per cent of its workforce on temporary partial unemployment as of April 15. The Lausanne-based body has also put a freeze on recruitment – with the exception of the two director-level appointments for jumping and endurance – and is looking at cost-saving measures to reduce expenditure, including the postponement of non-essential projects.

Ahead of the coronavirus outbreak and the spate of cancelled FEI events, the international federation had projected total net revenues of CHF68.4m (€65.0m/$70.1m) in 2020. This included a budgeted figure of CHF15.4m in Olympic revenues but the Tokyo 2020 Olympic Games have now been pushed back by 12 months.

De Vos (pictured, right) said: “After the 2016 Games, we collected $15m (€13.8m) over four years…we have reserves and the ability to cope, if the current situation does not last too long, but all the same we will take steps to limit our spending.”

Issuing information on the Covid-19 impact, the FEI said on its official website that its income has “already been seriously affected by the pandemic” but that “thanks to processes put in place after a full risk management assessment three years ago, the financial position of the FEI remains solid”.

The International Olympic Committee distributes revenue to international federations in different tiers based on their audience and size.

Asked at the start of the month if advance payments could be made to smaller federations who rely on the Olympic money, Kit McConnell, the IOC’s sports director, said that talks were ongoing about any support the IOC can provide but it was “too early to speculate”.

He said: “We’re very conscious of the impact of coronavirus across the world of sport. We know that the federations have lost a number of events this season. The revenues not only from this season but potentially for the next calendar year will be impacted as well. We’ve heard that and had that discussion with the federations already.”

Last week, the FEI removed the paywall from its FEI.tv streaming platform and announced that it is providing free archive footage to broadcasters. Existing FEI.tv subscribers will also be compensated for the months of April, May and June.

The federation’s OTT subscription service generated CHF1.87m in revenues in 2018. The streaming technology is provided by Endeavor Streaming, the streaming arm of Endeavor, the agency and talent management group that owns IMG.

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.

In other steps taken by the FEI to aid the sport’s stakeholders, calendar fees have been waived for events between March 15 and the end of 2020. A decision on reducing or waiving organiser dues will be made at an FEI board meeting in June when there is “more clarity on how many events will potentially be organised in 2020”.

Annual subscription payments for the sport’s 137 national federations are to be reduced to 50 per cent this year and the invoice deadline extended from 30 to 90 days.

World Sailing, another summer Olympic international federation, last week took action to offset the effect of the Covid-19 pandemic and uncertainty over the IOC revenues, furloughing the majority of its staff and recommending 20-per-cent pay cuts for higher earners. According to figures presented by World Sailing in November, the federation was due to receive £12.24m (€14m/$15.3m) in Olympic income in the second half of 2020. This equated to 77.4 per cent of the £15.81m in projected 2020 income (before the Covid-19 pandemic took hold).