World Sailing is in the final stages of negotiating an overdraft facility to cover an expected cash fall in the middle of next year.
The worst-case peak shortfall is currently estimated to be £1.3 million ($1.7 million/€1.5 million) in August 2020, although the body expects to start the year with a cash balance of just £35,715 ($46,108/€41,358).
The loan is to be secured on the assets of the World Sailing Investment Trust.
Details of the governing body’s challenging cash flow situation emerged at its recent Council meeting in Bermuda.
As explained at the meeting, World Sailing has suffered both from lower-than-expected sponsorship income and a series of one-off costs during the present quadrennium running from 2017-20.
While total sponsorship income for the four years was forecast at £11.7 million ($15.4 million/€13.5 million) in 2017, only £6.9 million ($8.9 million/€8 million) is said actually to have been received.
On the expense side, a move from the body’s long-time base in Southampton to London is said to have incurred relocation costs of £1.1 million ($1.4 million/€1.3 million).
In addition, the first phase of a digital re-platforming project is said to have cost £300,000 ($387,000/€347,000), as is a Governance Commission.
An extensive package of governance reforms was rejected at the organisation’s Annual General Meeting on Sunday (November 3), dealing a significant blow to President Kim Andersen, who is up for re-election next year.
📺 The verdict on the @Paris2024 Windsurfer Equipment and the Governance Reform Proposal, as World Sailing's Annual Conference concluded in #Bermuda 🇧🇲 with the AGM ✅— World Sailing 🌎⛵️ (@worldsailing) November 3, 2019
📰 https://t.co/Ag0w9bMRwr#WorldSailingAC19 #Paris2024 pic.twitter.com/yucMSljYjW
Slides shown at the Council meeting forecast a deficit of £2.29 million ($3 million/€2.65 million) for the current year, down from a £4.66 million ($6 million/€5.4 million) deficit in 2018.
The improvement reflects a reduction in costs and a near doubling of sponsorship cash year-on-year.
Event income was also said to have held up well, reflecting sanction fees from a number of competitions, including the 36th America’s Cup, the sport’s pinnacle event, agreement for which was signed in Bermuda.
The latest quadrennial forecast predicts a surplus of more than £10 million ($12.9 million/€11.6 million) in 2020, a Summer Olympic year.
The overall deficit for the four years is forecast at £1.38 million ($1.78 million/€1.6 million) on income of just under £25.9 million ($33.4 million/€30 million).
The forecast Olympic dividend of £12.24 million ($15.8 million/€14.2 million) accounts for some 47 per cent of expected quadrennial revenue.
The bulk of the sport’s Olympic money is expected to be received next September, and should hence resolve the cash flow problem that is prompting the temporary overdraft to be negotiated.
The body parted company from its chief executive, the former British Olympic Association man Andy Hunt, last month.
Hunt notified World Sailing’s Board of Directors that he would be taking on a new role in international sport next year.
Accounts for World Sailing (UK) Limited indicate that Hunt was paid £192,393 ($248,379/€222,791) in 2018.