World Sailing’s hopes of negotiating an early exit from an expensive lease on its London offices have taken a knock because of COVID-19.
Financial forecasts for this year and next, available on the financially-stretched governing body’s website, include the following update: "The forecast for 2022 now includes the cost of full rent and business rates, which is £192,000 ($271,000/€233,000) over budget.
"It was previously assumed that the London office would be sublet by end of 2021.
"However, due to the lockdown, the demand for office space has contracted significantly and tenants are demanding significant incentives to sublease properties.
"Management now estimate a minimum of 12 months rent-free incentive for any incoming sub-tenant and so have revised the forecast for 2022 accordingly."
Elaborating at Friday’s (May 14) mid-year meeting of the World Sailing Council, David Graham, chief executive, said that the plan was to "relocate to more affordable offices".
However, "this ongoing lockdown in the [United Kingdom] means that the demand for office space in London is hugely reduced".
Asked whether a reduced office rental had been negotiated, Graham replied: "We didn’t actually get a reduced rate on our rent.
"We did have some payment holidays…
"We have got reductions on our rates, and I think that was to the tune of about £30,000 ($42,000/€36,000), with it being unoccupied.
"The landlord wouldn’t budge on the actual rent, but did give us some payment windows."
The extent of World Sailing’s financial challenges was underlined when Graham told the same meeting that it would have gone into liquidation without financial assistance from the International Olympic Committee.
Management accounts for the first three months of this year indicate that the body had negative equity on its balance sheet of £1.55 million ($2.2 million/€1.9 million) at end-2020 and just under £1.1 million ($1.55 million/€1.3 million) at end-March 2021.