Money crisis faces U.S. Olympic sports

With the Summer Olympics postponed until 2021, several U.S. Olympic sport governing bodies are struggling, projecting a combined loss of at least $121 million in revenue, The Associated Press reports.

DENVER » The postponement of the Tokyo Games has catapulted the sports organizations that make up the backbone of the U.S. Olympic team into crisis.

At least one has already started layoffs and others are desperate to stay solvent. Some are expecting a major downturn in membership dues, while others are reeling from event cancellations totaling more than 8,000 across all sports.

A database analyzed by The Associated Press shows combined projected losses of more than $121 million in revenue between February and June for 43 of the 50 national governing bodies that responded to a survey from the NGB Council in the wake of the coronavirus crisis.

As much or more as the U.S. Olympic and Paralympic Committee, which serves as an umbrella regulator of the country’s Olympic sports, it’s the NGBs that provide funding and other support for athletes to pursue their dreams at the Olympic and other elite levels. About 80% of the typical NGB’s budget goes toward supporting athletes.

Not including the U.S. Tennis Association — an outlier because of the massive revenue it generates from the U.S. Open — the NGBs have a combined annual revenue of about $685 million. By comparison, the NFL and NBA each reportedly brought in about $8 billion during its latest completed season. Half the NGBs are little more than ma-and-pop operations, working with small staffs and on revenue not more than $5 million a year.

The USOPC, which sent cash grants to the individual NGBs to the tune of around $65 million in 2018, is also in uncharted territory. The postponement of the Olympics forces the federation to make up for a shortfall nearing $200 million without the NBC payout that comes during Olympic years.

The USOPC broke with recent practice by not taking out insurance against that possible loss, instead deciding to self-insure. Some of the shortfall is expected to come from an endowment fund created out of a surplus from the 1984 LA Olympics.

The USOPC says the losses across American sports could range from $600 million to $800 million. A good portion of these losses can be recouped if the games go forward, as expected, in 2021. But staying financially healthy until that time is not a given for some of the more vulnerable NGBs.

“I haven’t heard anyone say their NGB itself was going to go out of business,” said Max Cobb, the president of U.S. Biathlon, who doubles as leader of the USOPC’s NGB council. “But there’s very little buffer to absorb any revenue loss for an NGB. They all run on a very tight revenue and expense model, and very few have much in the way of savings.”

Already, USA Cycling, a mid-sized NGB with an approximate annual revenue of $15 million, laid off eight of its 70-person staff. And USA Rugby, which existed on about $14 million in revenue through 2017, was already teetering and could be nearing closer to bankruptcy with the added uncertainty the Olympic postponement has brought.