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USOPC revenues dip to $196m in non-Olympic year as it braces itself for Covid hit

USOPC CEO Sarah Hirshland speaks at the U.S. Olympic & Paralympic Hall of Fame Class of 2019 Induction Ceremony (by Jamie Schwaberow/Getty Images for USOPC)

The United States Olympic and Paralympic Committee (USOPC) has reported a sizeable drop in revenues in 2019, a non-Olympic year, as it prepares for the full impact of the Covid-19 pandemic on its financial affairs.

Previously known as the annual report, the USOPC has issued its first Impact Report which covers the financial year ending December 31, 2019, and aims to go well beyond earlier versions in offering insight into the organisation’s new five-year strategic plan.

The consolidated financial statements for the USOPC and its foundation, USOPF, show total support and revenue of $196.4m (€166.4m) for 2019, down from around $317m in 2018. The accounts showed $54m more in expenses than revenues in 2019, a not unusual figure in a non-Olympic year that comes after a Winter Olympics.

Sponsorship and licensing revenue made up the bulk of the revenue figure at $134.9m (69 per cent), followed by contributions of $39.3m (20 per cent). Broadcast revenue of only $1.5m (one per cent) was reported, the principal cause of the reduction due to the timing of broadcast revenues the organisation receives from broadcast partner NBC, which vary in Games years versus non-Games years.

Expenses were similarly down in a non-Games year, at $243.4m from around $275m in 2018, with high performance program funding ($111m) accounting for 46 per cent of this outgoing. The documents outline spending of around $23m, or 9.8 per cent of expenses, on administration.

This is significantly higher than the circa $15m average in 2016 and 2017, but less than last year’s $31m, which rose due to the cost of multiple investigations connected to the Larry Nassar sex-abuse scandal involving USA Gymnastics.

The documents also disclose that the International Olympic Committee (IOC) may have to negotiate a reduction in the value of its deal with NBCUniversal. March’s announcement that the 2020 Olympics would be rescheduled to begin July 23, 2021, and run through August 8 of next year has activated a ‘Right of Abatement’ clause in the deal.

The USOPC said these talks would only occur after completion of the Games in Tokyo next year, adding that “NBC and the IOC shall negotiate in good faith an equitable reduction in the applicable broadcast rights payments”. The rescheduled Tokyo Olympics will be the last covered by NBC’s $4.38bn rights agreement, which has spanned four games from Sochi 2014 onwards. NBC’s new $7.75bn Olympics rights deal, which runs from 2022 to 2032, will begin with the 2022 winter Olympics in Beijing.

USOPC has already been seeking to cut its cloth during the global pandemic, in May announcing it would eliminate 51 positions and furlough 33 more. Another 23 temporary workers had their assignments ended, and 32 employees were offered reassignments to new roles.

In April, USOPC detailed plans to make budget cuts of up to 20 per cent through the 2024 Paris Games. The USOPC’s four-year budget is around $1bn, meaning there could be cuts of up to $200m.

Writing in a letter accompanying the 2019 Impact Report, USOPC chief executive Sarah Hirshland said: “Collectively, these documents show that 2019 was a year of remarkable progress in which we listened to our community, changed our culture and implemented a strategic plan that will allow us to better support, serve and partner with all the stakeholders that contribute to the Olympic and Paralympic movements.

“It was a year in which we made some of the most sweeping governance changes the USOPC has ever seen – not for the sake of change, but because we believe it will improve athlete well-being and develop a stronger system of accountability.

“We ended 2019 a very different organisation – in culture, in mindset and in how we operate – and we are better positioned to steward the U.S. Olympic and Paralympic movements than we have ever been before.”

The USOPC’s five-year strategic plan contains four strategic priorities, which USOPC said will be the focus of investment and “substantive change” in the coming years. They are focused around creating a better experience for athletes; improving the effectiveness of the organisations that serve Team USA; establishing an athletes-first culture; and ultimately preparing for the opportunities created by Los Angeles’ staging of the 2028 summer Olympic and Paralympic Games.