The United States Olympic and Paralympic Committee plans to make budget cuts of up to 20 per cent through the 2024 Paris Games following the impact of the global Covid-19 pandemic.
The USOPC’s four-year budget is around $1bn, meaning there could be cuts of up to $200m. The situation could be worsened if the 2020 Tokyo Olympics, now set for 2021, is canceled entirely, which remains a possibility.
It is unclear where the cuts will come but payments to national governing bodies and athletes will remain intact.
No further furloughs or layoffs are currently planned in the organization but they, too, remain a possibility. USOPC chief executive Sarah Hirshland has already taken a 20 per cent salary reduction through the end of the year, while other executives have taken 10 per cent pay cuts.
“This will be very hard. It will impact programs that we feel terrific about,” Hirshland told the Wall Street Journal.
She added: “There is no scenario in which we will not see significant revenue loss over the next five years. The question for us is both one of, How much over that time frame will we lose? And the second question is, What’s the timing of when we’ll see payment to ensure we can manage cash flow effectively? And that’s the planning we’re doing now.”
Hirshland added that the USOPC will not dip into its reserves of around $200m, in part to have a financial back-up plan in case things worsen.
“For example, if the Games were canceled, whether the next ones or the ones after those [Beijing 2022 Winter Olympics], we are in a very very difficult environment, and that endowment reserve becomes critical to the life of the organization,” she said.
Sponsorship revenues will be diluted in the coming years due to the financial impact of the public health crisis. To combat this, USOPC and US Olympic and Paralympic Properties (USOPP), the entity charged with marketing and selling combined commercial assets after Tokyo 2020 up to Los Angeles 2028, has offered commercial partners the option to extend for no extra charge until after the Games in 2021.
It was reported earlier this month that many US Olympic governing bodies will look to secure financial aid from the federal government following the postponement of the 2020 Tokyo Summer Games and effects of the Covid-19 pandemic. The USOPC itself will not seek federal relief for the time being, Hirshland said.
Elsewhere, USA Track and Field has rescheduled its Olympic trials for June 18-27, 2021, at Hayward Field in Eugene, Oregon.