David Owen

We have heard a lot about how the International Federations' (IFs) finances have been hit by COVID-19 and the consequent postponement of Tokyo 2020; much less about the National Olympic Committees (NOCs).

So, the latest financial report from the British Olympic Association (BOA) has made particularly interesting reading.

Here we had an NOC that has come through two World Wars and hails from a prosperous and sports-crazy country explaining in detail what the postponement has entailed, and warning that a late decision to cancel the Games might have extremely serious ramifications.

No two NOCs are identical.

The BOA ploughs an unusually lone furrow, in that it a) receives no direct Government money and b) gets nothing like the megabucks from the International Olympic Committee that the United States Olympic and Paralympic Committee rakes in.

Nevertheless, if an NOC as well-run as the BOA is finding it hard graft, it is difficult to believe that others are not also having to mind their financial Ps and Qs.

An approach to the European Olympic Committees (EOC) asking whether other European NOCs had been expressing similar concerns yielded this reply:

"The EOC is doing its utmost to provide maximum support to our NOCs.

The British Olympic Association has released its latest financial report ©Getty Images
The British Olympic Association has released its latest financial report ©Getty Images

"This includes the roughly €2.5 million (£2.3 million/$3 million) from the Tokyo 2020 Association of National Olympic Committees funds, as well as additional money we will be distributing to the NOCs from our 2020 savings (as a result of fewer in-person meetings, lower travel expenses et cetera)."

You do not have to be a high-powered finance director to figure out why the Tokyo 2020 saga is making life difficult for bodies like the BOA.

For one thing, the commercial sponsors which provide much of their income from Olympic quadrennium to quadrennium really only get the maximum bang for their bucks over the few months either side of the Summer Games.

This means that NOCs are likely to have had little choice in practice but to extend agreements with their existing sponsors.

And this means, in effect, that they will be trying to make what would normally be four years worth of income stretch for five years.

As it happened, the BOA moved offices during 2019, the year to which the new accounts relate, and believes that, over the term of its new lease, it has secured "in excess of £1 million ($1.3 million/€1.1 million) of savings" compared with the anticipated cost of staying in its old office.

While the BOA, like almost any other organisation, will have undershot travel and hospitality budgets since COVID-19 began its fearsome worldwide rampage, there have also been consequences for pay.

The accounts reveal that the "senior leadership team have agreed to waive their rights to the deferred additional bonus for 2019", while chief executive Andy Anson and chair Sir Hugh Robertson have "requested that their remuneration be reduced for 2020".

Staff are said to have been informed, moreover, that "it is unlikely that the company will be in a position to pay bonus for 2020".

Another serious knock-on effect of the Tokyo postponement is that much time has been devoted to ensuring that contracts negotiated for the Games when they were in 2020 could be rolled over into 2021.

According to Anson, "literally hundreds of contracts that we had signed have had to be re-negotiated and re-signed".

He adds: "In doing so we really wanted to protect the revenue that was associated to the Tokyo Games, and push forward as much cost as possible into next year [2021]."

For all that, as long as the Games do proceed next year, and dominate global TV schedules for two midsummer weeks, as per usual, then the problems the pandemic has thrown up can be characterised, essentially, as Anson there implies, as cash flow issues.

After all, if the current cycle runs for five years, the next one will run for three.

The cancellation of Tokyo 2020 would put severe strain on the finances of NOCs ©Getty Images
The cancellation of Tokyo 2020 would put severe strain on the finances of NOCs ©Getty Images

Provided organisations have the financial flexibility to tide themselves over for the extra year, they ought to be able to rebuild contingencies and reserves over the next - short - cycle.

As the BOA has now underlined, however, should plans for a 2021 Summer Games ultimately be thwarted  - and, in spite of recent upbeat vaccine news, it cannot be emphasised enough that this remains at least a remote possibility - then the knock-on impact around the Movement would be altogether greater.

However sympathetic, you would think that sponsors would then want - and in all likelihood need - to be reimbursed.

Furthermore, the later in the day that a cancellation decision is reached, the more difficult it would be, or so one would think, for NOCs to avoid paying for hotel rooms, preparation camps and the like which would ultimately not be needed.

Oh, and the longer the pandemic dampens down the global economy, the more difficult one can expect it to be to unearth new sponsors for the Beijing 2022-Paris 2024 cycle, and beyond.

As Anson puts it: "We are back in the market trying to find commercial partners through to Paris and LA in 2028.

"We have got to be aware of what is happening in the commercial market though - and some sectors are hurting."

One enduring effect of the white-knuckle ride so many commercial enterprises have experienced during this scary and massively challenging year, meanwhile, is that survivors will want to put in place safer safety nets.

"Originally, and for the first time in a long time," Anson says, "we really thought we could build some surplus funds for the BOA going into Paris, with it being the next best thing to a home Games.

"We have had to tailor those ambitions back a little bit.

"We now have to build in contingency, and we have got to make sure we have got sufficient reserves to tackle this type of crisis moving forward.

"To only have six months' reserves, which is not an uncommon accounting approach, is not enough any more."