Storm ahead for World Sailing
Published on April 7th, 2020
The postponement of the Tokyo 2020 Games has put the pinch on federations which govern the Olympic sports. Funding from the International Olympic Committee, designed for four years, now must go five. Mikkel Thommessen takes a look at how this impacts Sailing for Scandinavian publication Seilmagasinet, and Google provides us with an English translation.
Even before the outbreak of the coronavirus, the economy of World Sailing, the world governing body for the sport of sailing, was under pressure. Large cost overruns had forced the borrowing from the Isle of Man reserve fund, and even then it would just be about the transfers from the International Olympic Committee after the Tokyo Olympics in 2020.
This reserve fund, which was built up in Arve Sundheim’s time as Secretary General, was the result of hard-fought financial management where no krone was spent before it was booked, and the IOC funds were carefully divided into five, with four parts distributed over the period between the Olympics, and the fifth part was set aside in a reserve fund.
This is no longer the case and the money spent by today’s Board and General Manager Andy Hunt has brought World Sailing to wherever it is now.
Several necessary immediate measures
Vice President Scott Perry who, in a conversation with Seilmagasinet, admits the situation as a result of the coronavirus and the postponement of the Olympics is now precarious and that several measures are needed to save the union. Perry emphasizes that if there has been disagreement within the Board about some dispositions, now is the time to stand together and take a collective responsibility.
Perry mentions several necessary immediate measures. 1. Reduction in employee wages by 20 per cent, 2. Transfer of funds from the government to emergency aid for small businesses, 3. Renegotiation of the lease at the London offices, and 4. Pre-payment from the IOC.
Must renegotiate office rent
World Sailing has seven years left of a ten year lease in the offices. They currently pay about £ 500,000 annually in rent ($617.6k USD), maintenance and fees, about four times the price of the offices associated in Southampton where they had previously been located.
The Southampton lease expired in 2017 with the choices at that time being Lausanne, Monaco, and two Spanish cities in addition to London.
Particular consideration should have been given to staffing considerations that formed the basis for the London selection, in addition to the fact that the new offices are very representative and well placed for visitors. The rent in London has been paid until the end of June this year and one hopes before then to have come to a solution associated with living in the future.
Uncertain IOC support
World Sailing hopes to come to an agreement with the IOC where a quarter of the estimated amount that will accrue after the 2021 Olympics will be payable now in August. According to Gerhard Heiberg with whom Sailmagasinet has spoken, this is impossible. Heiberg is no longer a member of the IOC board, but as former head of the IOC’s market commission, he knows the procedures well.
If Heiberg is right, it will look serious for World Sailing. In addition, the additional costs of postponing the Olympics will have to be shared between the Tokyo Olympic Committee and the IOC and therefore there is now no record of the size of the amounts that could be transferred to the special federations.
Scott Perry admits to Seilmagasinet that a bankruptcy in World Sailing can be unavoidable, especially if one does not come up with a satisfactory solution with the landlord in London. Spanish Gerardo Seeliger, who will be Kim Andersen’s counterpart in the November presidential race, says a bankruptcy must be avoided at all costs. He is currently conducting his own investigations to chart World Sailing’s finances so he knows what he might be going for.
Missing general manager
World Sailing has failed to find a replacement for Andy Hunt who resigned his position just ahead of the 2019 November Annual Meeting in Bermuda. He then had an annual salary of almost NOK 3 million ($295.6k USD). The lack of an administrative leader is starting to get precarious, and Perry is now hoping to have a new general manager in place during the summer, and at a significantly lower salary than the predecessor paid.