DENVER (AP) — The U.S. Olympic and Paralympic Committee is bracing for cuts of 10% to 20% because of the coronavirus pandemic that has pushed the Olympics back one year and triggered losses across the nation’s sports organizations, The Associated Press has learned.
The AP received a copy of a letter CEO Sarah Hirshland sent to leaders across the U.S. Olympic world Tuesday in which she said the exact nature of the cuts would be determined by the end of May.
“Rather than attempting a simple across-the-board reduction, we will make strategic decisions based on the resources needed to continue mission-critical programs, services and functions,” Hirshland wrote.
She said she has taken a 20% pay cut and the rest of the executive team has taken 10% pay cuts through at least the end of the year.
The reductions are needed to “balance both the current deals in revenue and anticipated decline in revenue that we expect over the next several years,” Hirshland wrote.
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 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. The delay could also 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.
Already, the organizations that run the individual sports are being impacted, with USA Cycling and USA Track and Field among those making staffing cuts, and USA Rugby filing for bankruptcy. A survey of the national governing bodies estimated they would endure $121 million in losses between February and June — the result of canceled events, declining membership and reductions in other revenue-generating operations.