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Two-thirds of international federations take up Swiss loan offer

(Photo by Alessandro Di Ciommo/NurPhoto via Getty Images)

Around two-thirds of Switzerland-based international federations have taken advantage of the government loans being offered to ease their cash-flow problems during the Covid-19 pandemic, according to Francesco Ricci Bitti, president of the Association of Summer Olympic International Federations (ASOIF).

The loan system was announced by the Swiss government on May 13 with the aid part-covered by the International Olympic Committee, which is based in Lausanne.

Speaking to CNN Money, Ricci Bitti said: “On the government side we have two kinds of scheme. One is the temporary and permanent unemployment support scheme and the other is the free loan.

“We act in both directions and around two-thirds [of international federations] took the [loan] opportunity.”

In addition, the IOC is providing repayable aid of up to $150m (€132.6m) 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.

International federations that are highly dependent on Olympic revenues have been hit particularly hard by the 12-month postponement of the 2020 Games in Tokyo.

The Swiss government scheme is chiefly designed to support international federations whose own events have been cancelled or postponed. The IOC support is to help international federations left struggling after the deferral of the Olympic revenue payments.

Ricci Bitti remarked: “The issue is cash flow and the free loans try to solve this. It’s a matter of time and I hope the time [that Covid-19 lasts] is not so long but cash flow was the key problem.”

However, he insisted that the international federations’ finances remain robust.

He said: “Generally the financial situation of the federations sounds very positive. We have federations with [cash] reserves.

“The duration of this crisis is very important. If, as expected, it’s getting better then I think all the federations could survive very well in my opinion.”

He also pointed to the international federations’ dependency on IOC funding going down “dramatically” in the period between the Sydney 2000 and Rio 2016 Olympics, and over a term in which the IOC contribution has increased in financial terms by 80 per cent.

Switzerland’s loan programme for international federations is being covered in a 50-50 split by the IOC and the federal and cantonal authorities.

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.

The Swiss government’s 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.

Asked if some international federations could be tempted to move their headquarters elsewhere, Ricci Bitti replied: “This is a very good question that was raised many times with the Swiss authorities. There is some intangible value here. Switzerland is a very expensive country but Lausanne is the centre of the universe in terms of Olympic sports. This is a big advantage.

“There are many values to being here but on the other side, there could be very attractive propositions from countries very far away.”

IOC’s insurance talks

The IOC remains engaged in talks with insurance companies over compensation for the Tokyo Games being put back to the summer of 2021.

Quoted by The Associated Press, Pierre Ducrey, the IOC’s Olympic Games operations director, said that an “open discussion” is under way.

He said that the aim is “to try and find the right level of compensation to help us bear the cost of having to wait another year”.

Bach said last month that the IOC expects to be hit by costs of $650m as a result of a postponed Olympics. The additional costs incurred include operational costs such as the Games department continuing to ensure the delivery of the event and another year’s worth of costs at Olympic Broadcasting Services, the host broadcast arm.

The IOC has an insurance policy against the cancellation of an Olympics but it remains unclear if this covers the one-year postponement forced by the Covid-19 pandemic.

According to the IOC’s annual accounts, the IOC’s cancellation policies for Rio 2016 and the 2018 PyeongChang winter Olympics cost $14.4m and $12.8m, respectively.

Speaking yesterday (Thursday) during an online conference with sports management students in India, Ducrey described retaining Tokyo’s Olympic Village, a complex of over 5,600 apartments, is a “fundamental piece of being able to deliver the Games”.

Around a quarter of the apartments have been pre-sold, meaning that talks with buyers over are now being held to compensate them for having to wait an extra 12 months to take possession of the property.