New financial statements give an idea of the scale of the revenue hole that the International Boxing Association (AIBA) might be left facing if it loses its Olympic funding as a consequence of Gafur Rakhimov’s expected election as President in Moscow today.
The documents, seen by insidethegames, indicate that aggregate operating income over the July 2016 to June 2020 cycle is expected to reach some CHF27.6 million (£21.2 million/$27.6 million/€24.2 million).
It is also disclosed that AIBA received a total of $17.3 million (£13.3 million/€15.2 million) from the International Olympic Committee (IOC) for the 2016 Olympic Games in Rio de Janeiro.
So the Olympic payment looks set to account for more than 60 per cent of AIBA’s operating income over the four-year period between Rio and the Tokyo 2020 Games.
While AIBA’s annual income is showing a tendency to rise, with CHF4 million (£3.1 million/$4 million/€3.5 million) budgeted to come from “Sport Events” in 2019-20, there seems little doubt that the Tokyo payment, if it comes, would again constitute a really hefty chunk of projected income over the 2020-24 quadrennium.
If it does not arrive, it would leave a correspondingly large hole.
The IOC have made it clear that they will seriously consider boxing’s position on the Tokyo 2020 programme if Uzbekistan’s Rakhimov is elected permanent President at the AIBA Congress today, in preference to his only rival, Serik Konakbayev of Kazakhstan.
It is thought that, rather than remove boxing from Tokyo, the IOC could suspend AIBA if Rakhimov is elected permanent President, and establish a rival governing body to run the sport.
The statements show that AIBA made a net loss of CHF1.79 million (£1.37 million/$1.79 million/€1.57 million) in the year to end-June 2018, a marked improvement on the previous year’s loss of CHF7.23 million (£5.55 million/$7.23 million/€6.33 million).
With cash at end-June 2018 falling to CHF1.85 million (£1.42 million/$1.85 million/€1.62 million) from CHF6.79 million (£5.2 million/$6.8 million/€5.95 million) a year earlier however, total assets dipped to below CHF4 million (£3.1 million/$4 million/€3.5 million), compared with total liabilities of CHF22.9 million (£17.6 million/$22.9 million/€20 million).
Last August, Rakhimov suggested that AIBA could have gone bankrupt if it had not signed a “settlement agreement” with an Azerbaijani company called Benkons.
According to this agreement, out of AIBA’s total debt of $10 million (£7.7 million/€8.8 million), $2 million (£1.54 million/€1.76 million) was to be returned to Benkons via sponsorship.
It was said at the time that further discussions would be held for another $3 million (£2.3 million/€2.6 million) to be also covered through sponsorship, which would “significantly improve AIBA’s financial situation”.
A Note in the new documents now indicates that this further $3 million could not ultimately be agreed.
The Note states: “AIBA undertakes to offer to Benkons a sponsorship agreement for $2 million first class exposure in all AIBA competitions in accordance with a sponsorship agreement which will last until the Tokyo Olympic Games (2020)…
“The remaining $8 million will be repaid on eight annual instalments of eight year starting from 2021 (2021 to 2028).”
Budgets for the present year and for 2019-20 indicate that AIBA expects to record net profits of around CHF6 million (£4.6 million/$6 million/€5.25 million) over the two years.