Profit or Not?

“Marx was right” I was murmuring to myself when I read the Minutes of the 2018 IOF General Assembly. It was Karl Marx who stated in Die Deutsche Ideologie (1845) as part of his criticism of the Hegelian idealism, that Nicht das Bewußtsein bestimmt das Leben, sondern das Leben bestimmt das Bewußtsein.”  That is, “It is not Consciousness that determines Life, but Life determines Consciousness.”

In the Congress binder of the 2018 IOF General Assembly it was shown that the 2016-18 period the IOF made no profit. In the minutes of the GA it was stated that the IOF’s financial status has been stabilised, and after all, the IOF is a non-profit organisation and the goal is not to make significant profit. This appeared to be in stark contrast with the over €300,000 profit plans presented to the GA 2 years earlier in the 2016 Congress binder for the same period by the same leadership, and the statement that the surplus was required to strengthen the IOF’s financial position. Apparently changes in life changed the thinking of the IOF leadership.

The planned and expected profit figures of total profit for the 2016 – 2018 period are shown below. You may find more details in my previous post IOF Financials – the past is dark, the future is unclear.

iof total profit 2016-2018

 

In the Minutes of the 2016 General Assembly under Section 15.2 “Membership fees and budget for the years 2017–2018” it was stated that

Leho Haldna presented Council’s proposal for the budget for the fiscal years 2017 and 2018.

LAT requested information about how the planned surplus in the budget was to be used, and also asked where the proposed increase in development funding was shown in the budget.

TH [Tom Hollowell] responded that the IOF’s capital and reserves should be strengthened and that the surplus was primarily intended for this purpose.

In stark contrast, under Section 10 in the Minutes of the 2018 General Assembly, under “Report by the Council on the activities of the IOF since the last Ordinary General Assembly”, it reads that

President Leho Haldna (LH) presented the report on the activities of the IOF in the period since the previous General Assembly in 2016 […]

The report also included how the IOF’s financial status had been stabilised during the last congress period. LH wished to make the statement that the IOF is a non-profit organisation, and that the goal was not to make significant profit, but that these funds should always be reinvested into the activities of the organisation.

For the uninitiated the above views of the IOF leadership only two years apart may sound like contradictory to each other. For the avoidance of doubt, one may find that the reason for the significant shortfall in the delivered profit was not reinvesting in activities, but the IOF’s inability to deliver the sponsorship and other external income as planned by the IOF leadership. Although there appears to be some inconsistency across various representations of IOF budgets, forecasts and accounts, my best estimate is as follows:

 

iof sponsorship income 2016-18

What is clear, is that in the beginning of 2016 the capital and reserves of the IOF stood at €114,630. In August 2016 the IOF leadership believed that an extra €300,000 addition was required for the capital and reserves of the IOF to ensure stability. After two years there were virtually no funds added to the reserves. Yet, the IOF leadership declared that the IOF’s financial status had been stabilised. Either a financial miracle happened, or Marx was right and changes in life changed the thinking of the IOF leadership.

It is also notable, that the realisation of 2018 that the IOF is a non-profit organisation came only two years after the largest annual profits were planned in the IOF’s history.

Ten years underperformance - Sept 2018

 

What has changed? Apparently, nothing more than Life made the IOF leadership realise that they could not deliver the fantastic profits they dreamt up.

We have to bow to the wisdom of Karl Marx.

The Value of Athletes

I was approached by different athletes suggesting that the picture below would worth a post. It shows the podium of the 2018 World Cup series. If you zoom in, you can see the prize money given by the IOF to the top FootO athletes of 2018. €100 for 6th place overall, €200 for 5th, €300 for 4th and €400 for 3rd. Tove and Karolin were smart enough to cover up the reputation damaging sums of €1000 and €500 given for their outstanding performance through 2018.

world cup podium 2018

It just does not look right. It is simply shameful, as one athlete said. Even no prize money would work better than showing these sums to the world.

For comparison, here are some numbers for the 2019 overall prize pool of three international federations. Interesting to note that all three have increased the sums over their 2018 prize pool.

  • Orienteering (IOF):       €12 thousand
  • Skyrunning (ISF):        €187 thousand
  • Biathlon (IBU):         €7,000 thousand

The prize fund for the FootO World Cup was increased for 2019 from €5000 in 2018, but the IOF contributes only €1,500, that is less than 1% of its external revenues, and around 0.15% of its total budget to the €12,000 prize fund.

Although the IOF earns good money from broadcasting the performance of top orienteers, there is absolutely no visible intention to share the profit with the athletes.

In 2018 100%, in 2019 88% of the prize fund comes from a contribution imposed on the organisers of World Cup races. The organisers have to pay this extra fee over and above of all other IOF imposed costs like the sanction fee, anti-doping fee, TV production costs, and the likes.

The information on the Skyrunning prize fund is a bit patchy. It is unclear how much different sources contribute. What is clear that individual races of the World Series must have at least a €6,000 or a €10,000 prize fund in addition to contributing to the overall prizes. They also have to offer free entry and accommodation to the top 10 runners.  No obligation on live TV, though. A very different approach from another non-Olympic sport. They clearly try to attract the top athletes.

The IBU prize fund of €7million rewards a large number of athletes. IBU pays this over and above the €4 million planned as participation support to athletes. Of course, IBU plays in a different league, but it is remarkable that the €7million represents approximately of 1/4 of their external revenues of TV rights, sponsors and funds from the IOC.

If the IOF would follow an approach similar to IBU, approximately €45,000 to €50,000 would be paid to the athletes based on the planned net proceeds from sponsors, TV rights, Live Orienteering, and IOC contribution. If we consider the event sanction fees as external revenue, like the IOF leadership does, then €100,000 to €110,000 would be the prize fund following IBU’s approach.

What is behind the IOF’s rather different attitude towards sharing the proceeds with the best athletes?

Continue reading “The Value of Athletes”

Olympic Dream – status end 2018

End of 2018 was another busy period for me and I could not focus on this blog. Now I have a bit more time to share some thoughts on recent developments in our sport.

One topic I wanted to catch up with is the Olympic Dream. This a fascinating area of IOF activity: heightened communication around the Olympic ambitions combined with apparently haphazard activities or lack of it, and no meaningful results to show whatsoever. A year ago I already I wrote about the talk vs action related to the Paris 2024 dream.

In this post I would like to recap the current status of the Olympic Dream that sometimes gives a feeling of a black hole for IOF resources. In a separate post I will try to analyse what could make the leaders of the IOF chase this fantasy instead of focusing the limited resources on more practical tasks.

When you look beyond pink cloud ambitions, scratch the surface, and look into the details, it becomes rather obvious that the chances of orienteering being included in the Olympic programme is zero. Not slim, not poor, not little. Simply zero.

Let’s start this review with the new strategy as presented by the Council to the General Assembly in October 2018.  The General Assembly – as always – unanimously approved the Strategic Directions and the Activity Plan proposed. One can read the full text in the Congress Binder, but the essence is shown below:

iof strategic directions 2018-2022

 

I found particularly interesting the “so as to” wording above. According to all dictionaries it means “in order to” or “for the purpose of”. That is, increased attractiveness of orienteering shall serve the purpose of inclusion in the Olympic and Paralympic Games, and not some l’art pour l’art (or rather sport pour le sport) love of orienteering.

The Council clearly set the Olympic Dream as the ultimate goal for orienteering from 2019 on.

To appreciate the difference, compare this with the previous, 2012 version of Strategic Directions, where the goal to position for inclusion in the Olympics was only one of the goals, not the ultimate one.

 

iof key goals 2012-18

One can also see the difference in the changed approach looking at the Activity Plan for 2018-2020. Specific details of the Olympic Dream are spelled out amongst the focus areas in the same document:

iof focus areas - goal 2020

Great ambitions! The intensification of the effort to throw more resources down the black hole of the Olympic Dream is emphasised by the goals of gaining inclusion in the programme of specific Olympic Games. There was nothing similar in the 2012 and 2014 activity plans. These specifics were first introduced in the 2016 plans.

activity plan 2016-2018

The result was predictable:

  • Inclusion in YOG games secured – key outcome by 2018 – FAIL
  • Contact with Beijing 2022 organisers – target – NO RESULT
  • Contact with Paris 2024 organisers – target –  UNCLEAR (but unlikely, see below)

The outcome for the 2018-2020 Activity Plan regarding the Olympic Dream is just as predictable. Let’s look into the details below that can be easily summarised:

  • The Olympic and Youth Olympic sport selection is secretive with no clear application process, and does not favour orienteering for various reasons;
  • The Paralympic selection process is more transparent, but the IOF apparently did not even apply to be considered for inclusion in Paris 2024.

Continue reading “Olympic Dream – status end 2018”

Is Live Orienteering Dead?

I did not plan to write another post this week, but my attention was called to a new development that may be of interest of the delegates to the General Assembly meeting in Prague this weekend.

Live Orienteering.com redirects to Cleeng, a commercial video streaming provider for live streaming and to the event website for results, all with a somewhat cryptic message: “due to the problems with payments and access to the IOF LIVE Orienteering platform”.

The core functionalities of liveorienteering.com do not work: the pay per view and the one-stop result services, that is, the objectives why it was built and then completely rebuilt after 2 years with high expenses and lots of management time involved.

After all the above, it is just a little added colour that the “free of charge” event costs €6 per day if you want to see it.

LiveOrienteering - FootO WorldCup Round 4

Problems with Live Orienteering are nothing new. Last year it struggled with the WOC and the first round of the World Cup. This year I did not follow its performance, but I heard various comments about its non-reliable performance.

All this makes you wonder: is this the beginning of the end for Live Orienteering? Will the IOF Leadership abandon its venture into the money-sink of IT platform development?

In any case, here are some cornerstones for the Obituary of Live Orienteering based on Council minutes:

  • January 2014 (Point 23, Council minutes #168) – Leho presented the idea of the IOF LiveCentre to the Council as the platform for pay per view services. The cost of development was not mentioned, but rumour says that it was in the tens of thousands of euros with hundreds of hours of management time added.
  • October 2015 (Point 27, Council minutes #176) – the proposal to create a new digital platform (that is to replace the recently developed LiveCentre) with a hint about “cost-of- ownership issues, i.e. support and content management costs”.  In plain English that means that the original development was not thought through beyond the initial enthusiasm.
  • June 2016 (Point 28, Council minutes #179) “A beta test version could be expected for JWOC and WOC internal testing. […] The contract with the vendor of the current LiveCenter had been extended until November 30th, 2016 to guarantee a functioning LiveCenter for WOC.” – sounds like unexpected delays in development.
  • July 2017 (Point 7 and 20, Council minutes #185) “LIVE Orienteering had been released and it was noted that quality still needed to be improved. […] Council briefly discussed LIVE Orienteering status and noted that investments needed to continue and primarily to improve the reliability of the platform.” (that is, the platform still did not work, see also some screenshots here)
  • January 2018 (Point 10.3, Council minutes #187) “Investments were to be made in the development of Eventor, LIVE Orienteering and an update to the IOF webpage.” (that is, even more money was required)
  • June 2018 (Point 7, Council minutes #189) “3 issues were found during the use of LIVE Orienteering at EOC. 2 of the issues were solved early in the week, but one issue in the livestream.com platform remained unsolved. Focus now is on securing the performance for WOC.”  (sounds like more money needed)
  • October 2018 – Live Orienteering does not work at all as a platform for pay per view live streaming.

 

Looks like the perfect showcase for the IOF’s workings and an explanation for the financial performance of the IOF. It looks like lots of money and lots of management time (also an expense)  wasted with very little to show for.

Will there be questions from Member Federations on the General Assembly about how much money and human resources were spent on Live Orienteering, and the reasons that it looks like an abandoned venture?

75 years chasing Olympic Glory

The biennial General Assembly of the IOF takes place this weekend in Prague. Whoever attended these events before, or at least heard eyewitness reports, knows that it is very unlikely that anything unexpected would happen. There could be a handful of Member Federations who may try to throw a pebble into the quiet pond, but those attempts typically get attenuated by the quiet passivity of the majority, or by the deflecting tactics of the IOF Leadership. It is very, very unlikely that serious debate would take place on the General Assembly around questions of financials or anti-doping activity, no matter how much delegates may gossip about those questions over a beer or two.

I still hope though, that a Member Federation, or the IOF Leadership themselves may raise their voice to correct a very unfortunate oversight in the Strategic Directions and Focus Areas for the Congress Period 2018-2020 regarding the Olympic Ambition as quoted below (original in is in the Congress Binder):

AMBITION: TO BE INCLUDED IN THE OLYMPIC AND PARALYMPIC GAMES
Goal 2020:
✓ Inclusion as an optional sport for the Olympic Games in Paris 2024,
✓ Inclusion as an optional sport to Youth Olympic Games 2022 (FootO) and 2024 (SkiO)
✓ Be elected or appointed to a position in one of our stakeholder organisations

So far this is part of the usual General Assembly process that got established over the past two decades or so. The Council includes “Olympic Ambition” in the strategic plan. The General Assembly approves everything proposed by the Council with no modification. And from then on, the IOF leadership pushes the Olympic Dream, because “we have no choice; that is the mandate given by the GA; we cannot modify it; etc, etc.”

Funnily, this moral stance of  fully respecting General Assembly decisions is not observed when the President and the Council regularly modify the approved budget, even within 2 months of its approval. But that is another story.

The point of this post is to call attention to the following oversight in the 2018-2020 plan:

2019 marks the 75th year anniversary of the endeavour to include orienteering in the Olympic Games. The first negotiations with the IOC on orienteering began back in 1944, even though the IOF was not established until 1961.

This somewhat surprising, but nevertheless heartwarming information comes from the article of Heinz Tschudin, the late President of the IOF. In 1992 he published an article in Orienteering World titled Orienteering and the Olympics. I could not get a copy of the original, but here you can read a reprint published in Orienteering Canada in 1992.

Orienteering and the Olympics (1of2) - OrienteeringCanada_Newsletter_1992_Vol20_No2_FallOrienteering and the Olympics (2of2) - OrienteeringCanada_Newsletter_1992_Vol20_No2_Fall

It would be really interesting to see more information on this fact unearthed by Heinz Tschudin. It does sound strange at first sight, as we know that in 1944 majority of Europe was somewhat distracted from discussing future Olympic programmes. Yet, if we consider that in 1944 Sigfrid Edström, a Swede was the acting president of the IOC, and that SOFT, the Swedish Orienteering Federation, was already founded 1938, the story starts to look plausible. It would be fascinating to see more details on this either from the notes left by Heinz, or from the the SOFT or IOC archives.

This 26 year old article of Heinz provides superb insights into the process of trying to get  orienteering into the Olympics. I will discuss those under separate cover. Yet, I would like to call your attention to the point Heinz made about the core question he faced when tried to negotiate with the organisers of the 1982 Winter Olympic Games in Calgary:

How much money will you bring in?

36(!) years passed, but the IOF Leadership has not even tried to answer this core question that is required just to start the discussion about getting on the Olympic programme. Without a solid financial basis all the talk about Olympic Ambitions feels rather empty.

But now let’s focus on the many unique opportunities offered by this 75th anniversary, as listed below. It would be a major mistake not to use this occasion for the promotion of orienteering and the IOF’s Olympic Ambition.

Continue reading “75 years chasing Olympic Glory”

IOF Financials – the past is dark, the future is unclear

With this post I would like to give the confidence to the representatives of Member Federations before the vote on the 2019-20 budget on the IOF General Assembly next weekend. I know that for people with no finance background it often looks like a daunting task to interpret financial statements and have confidence in their decision. So I would like to assure them that based on the IOF’s track record for the past 10 years, and especially for the past 2 years since the 2016 General Assembly, their vote doesn’t matter.

No matter how Members Federations vote, the IOF Leadership will spend the money the way they want, independent of the GA approved budget.

In this post I will quickly review the past, present and future of IOF finances as presented on recent General Assemblies.

Continued historic underperformance

The publication of the 2017 results and the forecast for the 2018 published in the Congress Binder have confirmed the remarkable feat achieved:

The IOF Leadership has missed the budget target set by themselves for 10 years in a row.

I wrote about this earlier here and here, the numbers published for the 2018 General Assembly just confirmed the expectations.

Ten years underperformance - Sept 2018

Not only the continued underperformance against their own budget targets set by themselves may come close to a Guinness Record, but the results were poor also in absolute terms.

The IOF has lost a total of €114,000 since 2009, and €38,500 since 2013.

Ignoring the approved budget looks like a recently established culture of the IOF Presidents. It started under Åke with unpublished promotions that very likely had budgetary impact, continued by Brian just informing the Council that he decided to overstep the approved budget to fund an exhibition on the SportAccord convention, and continued further by Leho who started to revise the 2017 budget already in October 2016, within two months after its approval (as discussed below).

Complete wipe out of the 2016 GA promises

Leho, as freshly elected President promised a period of plenty on the 2016 General Assembly, with highly profitable years coming starting from 2016. The result resembled the words of Chernomyrdin, the late Russian Prime Minister:

We wanted to do it better, but the outcome was the usual

Results 2016-18

For the avoidance of doubt, the plus zero result (or 0.2% of the promised total profit of the total of three years 2016-18) was not due to spending all the money on development projects. The reason for underperformance were the complete misjudgement of revenues, and overspend on some expenses, like the World Games (€10,000 planned, €29,306 spent in 2017).

Unfortunately, this poor state of IOF financials contributes to the bad feeling that there was an incentive for the IOF leadership to spend monies collected for anti-doping activities of the IOF differently than the original intention.

Continue reading “IOF Financials – the past is dark, the future is unclear”

IOF Anti-Doping activity questions

(This post has been updated with information received from the Portuguese organisers of the 2016 World MTBO Championships. The updates are shown in the text in blue)

I always believed that the anti-doping fight was too important a matter to be left to the anti-doping officers, to paraphrase Clemenceau’s famous assertion that war is too important a matter to be left to the generals.

Yet, I always found it difficult to have a meaningful discussion about it with Brian and the Council when I was the Chair of the MTBO Commission. Their argument was, of course, that anti-doping matters are highly confidential. That is obviously a very relevant point regarding specific tests, but I could never figure out the reason for their reluctance to discuss anti-doping strategy and finance. Were they hiding their lack of understanding and unwillingness to learn about the topic? Or were they simply reluctant to engage in meaningful discussions?

To the deepest regret of most top managers, questions do not disappear just because they do not want to talk about them. This applies also to the IOF’s anti-doping activity, and the more one scratches the surface the more questions pop up. In this post I will share with you some observations that suggests that all is not well. I have more facts about MTBO for the simple reason that I talk to most athletes and organisers in that discipline, but both anecdotal evidence and data available suggests that there are similar questions across all disciplines of the IOF.

Fewer AD tests

There was a sharp drop in the number of AD tests for MTBO athletes commissioned by the IOF. There is no official data available, but MTBO is a  small community (a bit like FootO was in the 80s and 90s), and people talk to each other.

IOF MTBO anti-doping tests - updated

 

Some explanation: OOC stands for out of competition, IC stands for in competition. The peak in 2016 was achieved in a hybrid year of financing when the IOF leadership introduced flat taxes (or “donations”, as they call it), instead of  just surprising the organisers on the event by the number of AD tests to be paid for. The Portuguese World Championship organisers were asked if they wanted to pay the then newly set fee of €4000 according to the new AD financing system, or pay for the tests as requested by the IOF according to the old system. Knowing that typical number of tests requested would  cost less than €4000, the Portuguese elected to pay themselves. They had the pleasure to pay for a record number of 27 AD tests on 18 athletes, far the highest ever requested by the IOF on a single World MTBO Championships. That cost the Portuguese organisers at around €6500, including doctors’ fee. There was a strong feeling that the IOF took advantage of the situation that the Portuguese elected to go by the old system. This feeling of being taken advantage of was strengthened, when both in 2017 and 2018 the IOF paid only for 8 tests (i.e. less then third that of ordered in 2016) on the World MTBO Championships, despite collecting a record amount of €5000 and €5500 from the organisers.

Anecdotal evidence from FootO elite athletes suggests that recently there was also a sharp drop in AD tests on major FootO events.

Unfortunately, the hard facts available also point to the same directions. The number of athletes in the IOF Registered Testing Pool has dropped by over 60% in 2 years. The number of FootO athletes dropped from 8 to 3 between 2016 and 2018. These are the athletes who have to report their whereabouts in WADA’s ADAMS system, that is, these are the athletes who can get an out of competition AD tests ordered by the IOF. You may find the lists of the registered athletes here.

 

IOF registered testing pool

But this is not the end of the story.

Continue reading “IOF Anti-Doping activity questions”