Money crisis looms for U.S. Olympic sports
No Summer Games means governing bodies that aid athletes face lean times
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 National Governing Bodies Council in the wake of the coronavirus crisis.
As much or more than the U.S. Olympic and Paralympic Committee, which serves as an umbrella regulator of the country’s Olympic sports, it’s the national governing bodies that provide funding and other support for athletes to pursue their dreams at the Olympic and other elite levels. About 80 percent of the typical national governing bodies’ 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 national governing bodies have a combined annual revenue of about $685 million. By comparison, the NFL and NBA each reportedly brought in about $8 billion during the latest completed season. Half the national governing bodies are little more than mom and pop operations, working with small staffs and on revenue not more than $5 million a year.
The Olympic and Paralympic Committee, which sent cash grants to the governing bodies 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.
The Olympic and Paralympic Committee 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 Los Angeles Olympics.
The committee 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 governing bodies.
“I haven’t heard anyone say their [national governing body] itself was going to go out of business,” said Max Cobb, the president of U.S. Biathlon, who doubles as leader of the Olympic and Paralympic Committee’s National Governing Body Council. “But there’s very little buffer to absorb any revenue loss for [a national governing body]. 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 midsize national governing body with an approximate annual revenue of $15 million, laid off eight members of its 70-person staff.
Many national governing bodies, such as cycling, are event driven — reliant on cash brought when people sign up for local and national competitions that they sanction. Others, such as USA Swimming, get the lion’s share of their funding from membership dues, which are taking a hit as facilities around the nation close on the order of state and local governments.
“We, as [a national governing body], will feel it next fall when memberships start rolling in. That shortfall could have a profound effect,” said USA Swimming’s Tim Hinchey. “We can overcome a lot of these things, I think, if all comes back to normal. But we have to wait and see like everyone else.”