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Tuesday 26 April 2011

BOA Backs Down

After coming under overwhelming pressure from the Olympic family, the BOA has agreed to withdraw a legal challenge that has overshadowed Games preparations.



The BOA started the dispute when it challenged the way any surplus from the Olympics will be accounted for in the hope that it could secure a larger dividend from the Games.



Last night it agreed to withdraw an action lodged at the Court of Arbitration for Sport in exchange for an improved package of support from Locog and Olympic sponsors.



The deal does not include any cash support from Locog and largely endorses existing contractual agreements however, indicating that the BOA has given most ground to save face after an acrimonious and embarrassing dispute.



Questions will now be asked of the BOA leadership of chairman Lord Moynihan and chief executive Andy Hunt who pressed ahead with the dispute despite the opposition of the International Olympic committee and the Government. Both will be permitted to resume attending Locog board meetings having been barred for the duration of the dispute.



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The BOA had argued that its share of any surplus should be calculated without including the cost of the Paralympics in the total Olympic budget, a move that would have given it a larger share of any profit.



It was also demanding that a £5m ‘bonus’, based on Locog meeting certain sponsorship targets and agreed by the previous BOA leadership, should be paid now rather than after the Games. Locog and the IOC rejected that argument.



Despite an emphatic ruling from the IOC that the original deal was legally sound, BOA chairman Lord Moynihan escalated the case to CAS, arguing that it was a matter of supreme importance to the future of British sport. Locog chairman Lord Sebastian Coe countered that the BOA had “mutated” London’s vision of a united Olympic and Paralympics.



In exchange for abandoning its case at CAS, the BOA has accepted a package of measures including access to additional tickets that it can sell to raise funding, and assistance with marketing.



Locog has also confirmed that the BOA will have first call on any surplus from the games to meet the £5m bonus.



In a joint statement issued this morning the BOA and Locog announced that the settlement included:



– Confirmation that monies due to the BOA and the British Paralympic Association (BPA) after the 2012 Games will continue to be prioritised and delivered should Locog’s Final Audited Statutory Accounts show a sufficient surplus.



– Confirmation that once any other financial obligations are met, any remaining surplus resulting from the financial results of both Games will be distributed on the basis of 60 per cent for the benefit of sport in the UK, 20 per cent to the IOC and 20 per cent to the BOA.



– Locog will proactively support the BOA’s ongoing efforts to secure corporate sponsors and other commercial partners for Team GB for the 2013-2016 Quadrennial.



– Locog will support the BOA’s plans for the marketing and sale of two items of iconic Team GB merchandise through its official retail outlets and in conjunction with the Torch Relay. Further, Locog has offered to waive its royalty fee on these items so that the proceeds are designated exclusively for Team GB/BOA.



– BOA will have access (subject to availability and not before 31 July 2011) to purchase additional Olympic Games tickets, which will be designated for two purposes: 1) for use with the Team 2012 Appeal, 2) for British Olympians who competed in previous Games.



– Locog has also agreed to increase support for Team GB operational planning prior to, during and immediately after the Olympic Games including access to venues contracted to Locog between the Olympic and Paralympic Games, subject to agreements from other contracted parties.



– To provide the BOA with the opportunity to build upon the successful Get Set Olympic Educational Programme, which is now in more than 16,500 schools across the UK, Locog and the BOA will work together to develop a detailed business plan to expand the impact and reach of the programme as part of the London 2012 legacy and to attract future commercial support.





Hunt said in the statement: “We appreciate the spirit of partnership and co-operation that Locog brought to our discussions” but in truth the BOA’s initial position prompted the most rancorous episode since London was awarded the Games.



The terms on which the BOA have settled appear to endorse the view that the BOA’s approach was motivated by concerns over its finances, which have been under pressure because of increased staff costs and an expansion program that has had mixed results.



The BOA has had to sell assets including its ticket rights for the next four Olympics to balance its books and the proceeds from the sale of its former headquarters has also been used to clear operating losses. Hunt has admitted it faces a challenge in funding the British team next year.



With the abandoning of the surplus debate Lord Moynihan and the chief executive will now face questions over the wisdom of instigating a dispute that, whatever the financial benefits, has cost the BOA’s reputation dear



Olympic Medals won during the Beijing 2008 Olympics

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