Exclusive: BOA extends overdraft facility
Thursday, 04 October 2012
October 4 - The British Olympic Association (BOA) has agreed a temporary £1 million ($1.6 million/€1.2 million) extension of its current £4 million ($6.4 million/€4.8 million) overdraft facility, as it seeks to increase its room for manoeuvre before income from new sponsorship deals feeds through.
The move, until April 2013, is disclosed in newly-published financial statements for the year to 31 December 2011.
These reveal that the BOA, as expected, fell back into the red last year, as it geared up for a home Olympics in which an unusually large – and, as it turned out, successful – British team ultimately took part.
The £421,000 ($678,000/€524,000) loss compared with a profit of nearly £236,000 ($380,000/€294,000) in 2010, but was smaller than budgeted.
It came from revenue of £10.69 million ($17.22 million/€13.29 million), down from £11.57 million ($18.67 million/€14.38 million) in the previous 12 months, which included the period of the Vancouver Winter Olympics.
But it is what the BOA has to say about the immediate future that will arouse most interest, with the body seemingly moving quickly to downsize now that Operation London 2012 has been successfully completed.
The good news is that two unidentified sponsors "with a gross value of £13 million" ($21 million/€16 million) have already been contracted for the next Olympic quadrennium running from 2013 to the Rio de Janeiro Olympic and Paralympic Games in 2016.
However, pending completion of further sponsorship deals, "headroom" against the body's overdraft facility is said to be "limited, particularly at the end of 2012 and in Q1 2013".
Management have therefore "considered various additional revenue opportunities and mitigating actions".
This may explain why chief executive Andy Hunt moved so quickly last month to unveil a planned restructuring that involves cutting the number of top staff.
Sebastian Coe's expected arrival next month, fresh from his triumph at London 2012, to succeed Colin Moynihan as BOA chairman, may well give fresh impetus to vital sponsorship negotiations.
And the BOA may yet get some windfall from its share of any surplus generated by London 2012.
However, the United Kingdom's National Olympic Committee still looks to face a somewhat delicate financial balancing act in the months ahead.