SAN FRANCISCO (#1230) – For twelve months we have been reporting that World Sailing insiders, who are all too happy to share their concerns with your Ed., have been wringing their hands over the the international federation's rapidly diminishing financial reserves under the profligate regime led by President Kim Andersen (DEN) and the non-sailing CEO Andy Hunt (GBR).
As we reported on Tuesday's TFE LIVE, earlier this week World Sailing Council Member György Wossala (HUN) sent a polite but revelatory open letter to Mr Hunt in advance of this weekend's WS Midyear meetings in London. To wit:
As I have previously informed you, this time I can’t attend the midyear meeting due to other activities. However, having regard to the growing unease among members and sailors in the boatparks, I feel my duty to call attention to some commonly used facts – and FAQs – regarding the pre-sent financial report and the financial situation of World Sailing.
COMMONLY USED FACTS:
In 2018 WS had total outgoings for 2018 that were close to GBP 4.800,000.
At 31 December, there was GBP 2,543,662 cash in the bank
Creditors were owed GBP 1,205,269.
Net cash position entering 2019 was GBP 1,338,393
To keep the doors open WS need approximately GBP 3,000,000 for wages and administration costs and about GBP 4,500,000 to operate its planned budget.
In 2018 WS increased staffing costs by GBP 250,000, gained 5 more employees and entered into an annual increase of accommodation costs of GBP 300,000.
Based on the above WITHOUT any incoming sponsorship revenues, WS will be insolvent within two months or latest in August.
WS estimated GBP 2,900,000 of sponsorship revenue for 2018 in their revised budget – item 7, page 9. Actual sponsorship was GBP 1,275,000 – a SHORTFALL of GBP 1,625,000.
FREQUENTLY ASKED QUESTIONS:
WHAT SPONSORSHIP revenue has been received in 2019 and what is contracted for 2020?
Why has the board of directors allowed the executive staff to run up significant costs beyond what it can effectively manage and placed WS in a position where unless sponsorship revenue is received OR WS begin to borrow money they place WS in a position of insolvency in mid 2019?
Why are WS failing to secure the large sponsorship revenues forecast?
At the board meeting of 11 March 2019, item 5 there is a new budget and cash flow approved for 2019 and 2020 – what is this and what actions are the board taking to mitigate the financial situation immediately?
I hope you agree, that clarifying these statements and answering the questions at the meeting in your report will eliminate further anxiety.
Wish you a successful meeting,
With my Best regards
Today Sailing Illustrated has been told by normally reliable WS sources that Messers Andersen and Hunt will report to the WS Council at this weekend's Midyear meetings that, despite deep cuts to programs and services, they must now borrow money to get through this year and next in one piece. One hears they have managed to secure a multi-million pound line of credit to make up for off the shortfall outlined in Mr Wossala's letter above.
Even if this line of credit staves off near-term bankruptcy, how will the organization survive the next quadrennium when it starts deep in the financial hole due to this borrowing, and with no prospect for an increase in Olympic TV revenues at the end of 2020 over those received in 2016 (and could not carry WS through even three years of this quadrennium)?
More cuts in staff and services? Are they seriously expecting to increase future sponsorship revenues – that had a budget shortfall of 1.6 million GBP in 2018?
Any way you paint it, or try to explain it away to the Council this weekend, it isn't a pretty picture.
World Sailing President Kim Andersen (DEN) and non-sailing CEO Andy Hunt (GBR). How much longer will Mr Hunt survive given increasing calls by WS higher-ups for him to be "excused from further participation" same as he was in his previous job (British Olympic Association) for failing to meet financial goals. Photo courtesy of World Sailing.