Month: January 2019

“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.

 

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:

 

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.

 

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.

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.

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”