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Thread: World Sailing On Verge Of Bankruptcy

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    World Sailing On Verge Of Bankruptcy




    Mikkel Thommessen For https://www.seilmagasinet.no/

    Even before the outbreak of the corona virus, the economy of the International Sailing Union 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 IOC after the Tokyo Olympics. 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 is set aside in a reserve fund. This is no longer the case and the money spent by today's Board of Directors and CEO Andy Hunt has brought World Sailing to where it now stands.

    Several necessary immediate measures
    This admits to Vice President Scott Perry who, in a conversation with Sail magazine, admits that 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, whose signature was recently used incorrectly in a letter from World Sailing to video blogger Tom Ehman, 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.


    Clumsy handled, says Andersen
    - This has been the case handled by the administration, says sailor president Kim Andersen, who otherwise has no comment on the letter case with Scott Perry and Gary Jobson

    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 smaller businesses, 3. Renegotiation of the lease in 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, maintenance and fees, about four times the price of the offices associated in Southampton. This lease expired in 2017 and World Sailing had to find new offices anyway. The choice at that time was between 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 election, 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 a former chairman 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.

    Bankruptcy possible
    Scott Perry admits to Sail magazine 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 annual meeting in Bermuda in November last year. He then had an annual salary of almost NOK 3 million. 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.

    Storm ahead for World Sailing.

    *************************************


    A senior World Sailing official has called on the International Olympic Committee (IOC) to advance the organisation its share of the Tokyo 2020 Olympic Games revenue after admitting the postponement of the event had worsened the governing body's precarious financial situation.

    World Sailing vice-president Scott Perry told insidethegames pushing back the Games until 2021 "has made our financial challenges more acute" and said the IOC had not yet indicated that an advance would be forthcoming.

    The Games being postponed by a year has placed additional pressure on International Federations, particularly those who rely heaviest on the payout from the IOC to survive.

    Federations have also been left with an uncertain financial future because of the COVID-19 pandemic, which has sparked a near-total shutdown of sport across the world.

    The IOC, which refused to answer questions on Tokyo 2020 payments last week, paid out a total of $520 million (£420 million/€476 million) to International Federations after the 2016 Olympic Games in Rio de Janeiro.

    The money is distributed using a system where federations are ranked according to their audience and size.

    World Sailing, which sits in the fourth group of federations alongside the likes of canoeing, fencing, handball and wrestling, received $12 million (£9.7 million/€11 million) from the IOC for Rio 2016.

    The London-based worldwide governing body had forecast an Olympic dividend of £12.24 million ($15.1 million/€13.9 million) from Tokyo 2020, which accounts for some 47 per cent of expected quadrennial revenue.

    It is not clear how much Federations stood to receive from the IOC for Tokyo 2020 and it has been suggested the amount could be less or around the same as Rio 2016 owing to issues caused by the coronavirus pandemic.

    Analysis of World Sailing's accounts carried out by insidethegames last year showed World Sailing had anticipated a cash fall this year, which would have been resolved by the Olympic money had Tokyo 2020 taken place as planned.

    "The state of World Sailing’s finances were challenged before the COVID-19 crisis and the subsequent postponement of the Olympics," Perry told insidethegames.

    "The postponement of the Olympics has made our financial challenges much more acute.

    "Along with most International Federations we would dearly like an advance from the IOC but at this stage we don’t have any indication that an advance will be forthcoming."

    Receiving an advance payment from the IOC is among the measures being suggested by Perry to tackle World Sailing's financial issues.

    The Uruguayan official also believes World Sailing should look to reduce expenditure on salaries by 20 per cent and claimed the organisation should renegotiate the rent it pays for its headquarters in London.

    It has been claimed the office costs World Sailing £500,000 ($617,000/€566,000) a year, around four times more than its previous home in the English port city of Southampton.

    A move from the long-time base in Southampton to London incurred relocation costs of £1.1 million ($1.4 million/€1.2 million), according to the body's accounts.

    "The measures we have taken or are in the process of taking are far too numerous to list," Perry added.

    "Suffice it to say that the whole Board of World Sailing is working tirelessly to ensure that we are first able to survive this crisis and second will be able to offer our full range of services to all our stakeholders as soon as practically possible."

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  2. #2
    The sad fact of the matter is bureaucracies often lose sight of their purpose and mission when tempted.

  3. #3
    The organization could use an enema

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