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BOA faces up to funding nightmare

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James Pearce | 15:47 UK time, Thursday, 3 March 2011

Now that everybody's had time to reflect on my revelation that the British Olympic Association doesn't have enough money to fund Team GB at the 2012 Olympics, it feels like the right time to try to answer the question that I've been asked over and over again during the past 24 hours.

How on earth has this happened?

The reaction from most people has been one of total surprise: "How is it possible that £9bn can be spent on the London Games, and yet we still can't afford to pay for the British team?"

However, you won't have seen any sports journalists falling off their chairs in shock at the news. We've known for several years that the BOA has been facing serious funding issues.

I told you back in June 2009 that the BOA had had to borrow £2m from Locog (the London Organising Committee) to keep the organisation afloat. Others have written similar stories since.

BOA chief Andy Hunt revealed the extent of the funding crisis

The BOA has changed a great deal since 2005 when London won the right to host the Olympics. The chairman, Sir Craig Reedie, and chief executive, Simon Clegg, have been replaced by Lord Moynihan and Andy Hunt.

The headquarters in south-west London have been sold (at a profit of several million pounds), and the organisation has moved to smart rented accommodation in the centre of the city. The ambitions of the BOA were always going to shift once a London bid had been successful.

It had suddenly become the National Olympic Committee of a host nation, and of course that brings new responsibilities. It also brought new opportunities - in particular, the chance to make the most of the higher profile that was bound to be given to British sport during the years leading up to the Games.

So, nobody would have been surprised, or even that concerned, when the BOA's new leadership team of Moynihan and Hunt first outlined plans to expand the organisation. The debate since, though, has been around the scale of their ambitions, and the cost.

The British Olympic Association actually has quite a limited role in the British sporting set-up. It's often described as a "glorified travel agent". That's because the organisation's main role only kicks in every two years. Its job is to send a team to an Olympic Games, kit them out, and to look after team members while they're there.

The reality is, that during the rest of the Olympic cycle, the BOA has little or no role at all, apart from attending the Youth Olympics and other smaller scale events.

That's because funding for elite athletes comes from UK Sport and not the BOA. Many other Olympic Committees around the world have far greater responsibilities than the BOA - many handle all the money that goes into elite sport.

That's not the case over here. The BOA doesn't get its hands on any lottery or government money. So in terms of power, UK Sport has far more than the BOA.

That's a source of tension. As soon as the BOA tries to expand, it finds itself treading on the toes of UK Sport. Take, for example, Sir Clive Woodward's much talked about coaching programme for the BOA.

UK Sport has never liked it. Why? Because it believes that that's its responsibility, and that its own programmes are absolutely fine without anybody else getting in the way.

Let's talk now about money. Normally, the BOA would raise cash by marketing the Olympic rings in its home territory. Those rights, though, have to be transferred to the organising committee if there's a "home" Olympics.

So currently the BOA doesn't have anything to sell. Before the London bid was successful a deal was agreed that Locog should pay the BOA about £30m over the seven years leading up to London 2012 in return for these marketing rights. Since 2005 those running the BOA have known that they had this guaranteed income.

The current BOA management have always claimed that that was a bad deal for the BOA. They say that it should have been worth much more. Whatever the rights and wrongs of that argument, one thing is for sure. The BOA has known for years that this was the case. When it started to spend more money, it did so in the knowledge of how much income it would be receiving from Locog.

And there HAS been a dramatic increase in the amount spent. For example, staff salaries have doubled to more than £4m. I understand that when last year's accounts are published in a few months time they will show yet another increase.

It doesn't take a mathematical genius to work out that if you have a guaranteed income of £30m over seven years and you spend £4m a year on wages, that doesn't leave a lot for much else.

The BOA does have other limited income sources. For example, it holds its charity Gold Ball every year. But the revenue from this is tiny compared to what's received from Locog.

The BOA will point to the fact that over the past two years the books have been balanced, but this is due to the millions that were raised from the sale of their headquarters and are now being spent on day-to-day operations.

Does all this really matter? It won't, as long as the BOA can fulfil its main commitment, which is to look after the British team at an Olympics - in particular, of course, the London Games. The BOA still believes that the money can be raised, but as I've hinted already, it doesn't have many friends in sporting circles.

There's a suspicion about empire building. That's why there's unlikely to be any cash coming the BOA's way from UK Sport or the government, and Locog believes that it's given enough already.

So it seems that if Team GB is to have the funding it wants at the 2012 Olympics then it's either going to have to be sponsors who step forward to assist, or the public. In the current economic climate that's not a particularly strong position to be in, especially as there's little incentive for sponsors to get involved when they're not allowed to use the prized logo of the Olympic rings.

Life will change for the BOA after 2012. It will get its rings back and will be able to take much more control over its financial affairs. The problem, though, is what happens before then.

The BOA's management is well aware that if the organisation is to retain any credibility at all then it simply has to find a way to fund the British team at its home Olympics. In times of trouble, though, you often find out who are your friends. If the BOA is feeling a little lonely, then those who believe that too much money has been spent on non-priority areas, will argue that it's getting what it deserves.


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