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World Sailing: 2017 operating loss was £5.2m ($7.1m), 44% of the 2016 IOC TV revenues; will WS go broke in 2019?

Tuesday, May 15, 2018

 

SAN FRANCISCO (#1013) – Today's World Sailing Council camel of a decision was clearly motivated by three issues. World Sailing is trying: (a) to achieve "gender equality" for Olympic Sailing by 2024 by creating, around a committee table, new, untried and untested events rather than re-jiggering or adopting current popular, wide-spread formats that could achieve the same thing; (b) to placate existing Olympic classes while at the same time trying to shoe-horn in the sport of Kiting as a new Olympic event under World Sailing since the IOC will not grant additional medals to the ten Sailing already has (or World Sailing has been too timid to ask for another); and (c) to find new revenue streams.

 

Point (c) is really what Kiting is about – an apparent new source of revenue – and is why the proposed Mixed Offshore Double-handed Event, despite not passing today, continued to have legs late into today's voting despite opposition from almost every corner except the WS CEO, main proponents US Sailing, and the French Sailing Federation (FFV). It would not be lost on our Dear Readers that the 2024 Games will be held in France, with the esteemed French boat-builder Beneteau said to be fully prepared to, er, help. A $300,000+ boat in the Olympics with World Sailing clipping that ticket? Ca-ching.

 

One hears that World Sailing's financial situation was a major and continuing point of discussion, if not dire concern, around the Council meeting table in London today. Why?

 

Over the weekend, the annual accounts (financial reports) were presented to the Council. Bottom line, in 2016 WS had a positive result of £8.4m ($11.4m), due mostly to £11.8m ($16m) in quadrennial TV revenue from the IOC. Such revenue happens only once every four years. Without the TV revenue booked in 2016, that year WS would have lost £3.5m ($4.7m). In 2017 WS had a whopping £5.2m ($7.1m) loss.  

 

In 2017 WS operating costs almost doubled – from £2.3m ($3.1m) in 2016 to £4.1m ($5.6m) in 2017. 

 

Similar operating losses as the doozie in 2017 are projected for 2018 and 2019 unless significant new sources of revenue are found, e.g., event sponsorship and taxation (by WS) of International and Olympic class equipment beyond just hulls. One hears that such levies are under serious consideration. 


At the beginning of 2018 World Sailing's Reserves stood at £9.0m ($12.2m). If operating losses continue in 2018 and 2019 at the same level as 2017 (let alone increase), as one senior WS official has told your Ed., "World Sailing will go broke sometime in 2019."

 

That, presumably, would require an unprecedented borrowing by WS against their 2020 Olympic TV revenue-share – a slippery slope if ever there was one. No wonder World Sailing is more concerned than ever about Olympic TV, and cow-towing in general to the IOC. 

 

As usual, just follow the money!

 

Of course WS could cut costs. In 2017 Governance and Meeting costs alone were north of £1 million ($1.4m), up from £690k ($936k) in 2016. In 2017 staff and other admin costs costs increased by a million pounds over 2016; of course some of that will be attributed to a one-time cost of moving the HQ to London. But clearly on-going costs in London, compared with Southampton where the offices were formerly located, are not going to decrease. According to the accounts presented, the CEO is paid £200,000 ($271,000) per annum. 

 

All this should probably come as no surprise given the events that befell current WS CEO Andy Hunt (GBR, a non-sailor, in the photo that leads this article) and his commercial director, Hugh Chambers (GBR, also a non-sailor) at their previous posts – where they both served in the same capacities – the British Olympic Association. Read about that in The Guardian here and The Daily Mail here.

 

World Sailing's Consolidated Income Statement (the P&L for you Yanks) follows below. PDFs of the full 2017 accounts as presented to the Council can be downloaded here, here and here.

 

 

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