The U.S. Olympic and Paralympic Committee is bracing for cuts of up to 20 per cent because of the coronavirus pandemic and warning that a cancellation of the Tokyo Games would be “devastating” to athletes and the organization.
The letter was accompanied by a Q&A that dealt with the possibility that the Olympics, now scheduled to start a year late, in July 2021, could be cancelled altogether if the coronavirus isn’t curtailed by then.
Though job cuts or pay reductions appear likely among the 500-person staff, many based at the headquarters in Colorado Springs, the Q&A said “we will look at broader program, services and personnel-related costs before we consider cuts or furloughs.”
Hirshland said decisions will be made by the end of May.
Most of the 50 USOPC-affiliated sports organizations were already hurting, and can also expect to see shortfalls in the amounts they receive from the federation in the form of grants and other funds that support athletes.
The USOPC’s budget runs on four-year cycles, and the biggest splash of money comes in during the year of a Summer Olympics, when TV payouts across the Olympic world are at their peak. The federation, for instance, brought in $195 million US more in 2016 than in 2015 for total revenue of $336 million.
Should the Olympics go on as now planned, in 2021, the TV money will still arrive, but a year late. But the delay could have a negative impact on a marketing agreement the USOPC cut with organizers of the LA 2028 Olympics, which was supposed to start next year. Virtually all Olympic-style marketing deals set for 2021 will need to be altered while many that were set to expire in 2020 could be extended.
Could tap into endowment money from 1984 Olympics
Meanwhile, a full cancellation of the games would throw the USOPC into uncharted territory. It could include having to tap into the $200 million U.S. Olympic Endowment, a fund borne out of the surplus from the 1984 Games in Los Angeles.
“We need to retain the ability to deal with things getting significantly more difficult, for example if there were a cancellation of the Tokyo Games,” the Q&A said in response to a question about why the USOPC isn’t using the endowment money now.
National governing bodies already have taken a big hit, with USA Cycling and USA Track and Field among those making staffing cuts, and USA Rugby filing for bankruptcy. A survey of the NGBs estimated they would endure $121 million in lost revenue between February and June — the result of cancelled events, declining membership and reductions in other revenue-generating operations.
In the Q&A, the USOPC acknowledged still seeking government help for NGBs and athletes. The USOPC, which has long held a policy of not receiving government funding, requested funds from the federal government’s loan program that it intended to funnel toward the NGBs. It was rejected, but NGBs themselves have been encouraged to apply for their own loans.