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Organisations Begin To Bounce Back After Pandemic

Written by MOS Editorial Team

Published on 19 December 2022

Financial news was at the forefront from the beginning of 2022, where January saw the Australian Institute of Sport (AIS) commit $247 million dollars to the 2024 Paris Olympic Games, which was followed by DAZN nearing an USD$800 million takeover of BT Sport, Cricket Australia announcing a $50 million loss due to the cancellation of the New Zealand series, and the NFL recording $2.5 billion in sponsorship revenue.

In February, the NCAA released their financial report, where they brought in US$1.15 billion in revenue, meanwhile in Europe, UEFA announced that clubs were set to lose over $7 billion, additionally, the AFL announced a loss of $43 million due to the pandemic, while their counterparts, the NRL, reported a surplus of $43.1 million.

The AIS hit the news again in March, as they committed $1.15 million in infrastructure grants, before the UFC announced their best financial year to date as they brought in $5.1 billion.

In May, the International Olympic Committee (IOC) reported a $7.6 billion in revenue over an extended cycle.

The IOC maintained a healthy and strong financial position as at 31 December 2021. This provided the IOC with the flexibility to navigate the global uncertainty caused by the pandemic and to strengthen its support to the Olympic Movement. Total assets stand at USD 5.6 billion. Current assets stand at USD 4.4 billion, while non-current assets stand at USD 1.3 billion. Cash and other financial assets, totalling USD 5.1 billion, represent 90% of the IOC’s total financial position – IOC financial report

To round out May, the UK Government approved the record $7.56 Billion of Chelsea Football Club, that was acquired by Todd Boehly and a consortium of investors.

Early June saw news surrounding the NBA, where the league’s debt was predicted to grow to US$7.4 billion, then on the same day, another record team acquisition was announced, with Walmart heir, Rob Walton, taking over the Denver Broncos.

In September, UEFA hit the news again, where the organisation said they were to receive €172 million from eight different clubs.

UEFA To Collect €172 Million Over Break-Even Breaches

Eight European Football Clubs will collectively pay €172 million (AUD$251 million) following a settlement with the governing body of European football after each team failed to comply with the confederation’s break-even rule.

The break-even rule states clubs cannot spend more money than they make.

The fine was split between AC Milan, AS Roma, FC Internazionale Milano, Juventus, AS Monaco, Olympique de Marseille and Paris Saint-Germaine and Beşiktaş JK with each team paying an amount relative to the size of their breach.

Each club will pay 15% of their fine in full, while the remaining 85% is conditional depending on each club’s compliance with targets set in the settlement agreement.

The settlement agreements for each club will cover either a three-or-four year period and will aim to transition the clubs from UEFA’s previous financial fair play regulations.

Big Revenue Growth For Formula 1 In 2022

Formula 1’s revenue growth continued for their Q1 2022 financial report, which saw the open-wheel racing championship double it’s revenue from results recorded one year prior, while Q2 2022 results were up 49% compared to Q2 2021.

The report has revealed revenue of USD$360 million (AUD$537 million) in Q1 and USD$744 million (AUD$1.1 billion) in Q2.

The growth in these results has been attributed to the COVID-19 pandemic having effected the previous year, a growth in media rights value, new sponsorship revenue, and additional Grand Prix.

Commenting on the organisation’s Q2 results, Formula One president and CEO, Stefano Domenicali, said: “The Formula 1 2022 season continues to set records as we have seen exciting action and unpredictable outcomes on track.”

Our balance sheet remains strong, and despite the significant cash cost required to deliver the AFL and AFLW seasons – Travis Auld, AFL CFO

AFL Reveals $43 Million Loss

It was in February 2022 when the AFL reported they had operated at a loss for the second year.

Having ended 2020 with a deficit of $22.7 million, the league capped off 2022 with a budgetary hole of $43 million.

The second COVID-effected season did see AFL’s revenue increase by $63.3 million, however, the increase was outweighed by a return to the standard club funding model and distributions relating to the collective bargaining agreement.

The rise in revenue was due to increased broadcast value, lower administrative costs and fewer travel and accommodation expenses.

Despite the losses, the focus remains on strengthening and rebuilding the industry balance sheet, which will increase future investments into the game from grassroots to the elite level.

IOC Reports US$7.6 Billion Revenue In Extended Cycle

The International Olympic Committee (IOC) reported a total revenue of US$7.6 billion (AUD$11.3 billion) in the recent extended Olympic cycle.

An Olympic cycle consists of a winter, summer and Youth Olympic Games, and due to the delay of the Tokyo games, stretched into a fifth year with this past Olympiad.

Broadcast rights is the big winner for the Olympics revenue, with the organisation picking up 61% of the $7.6 billion, top marketing programs brought in a further 30%, while other revenue and rights made up the final 9%.

The IOC maintained a healthy and strong financial position as of 31 December 2021, which provided the them with the flexibility to navigate the global uncertainty caused by the pandemic and to strengthen its support to the Olympic Movement.

NBA Debt Grows By US$7.4 Billion

A report in June said that the National Basketball Association (NBA) would see their debt rise to USD$7.4 billion (AUD$10.3 billion) when it came to selling tranches to its senior notes.

According to Sportico’s June 2022 NBA franchise valuations, the league will have leveraged media contracts to support the debt, which are intended to provide funds for three undisclosed franchises.

Credit rating company, Fitch Rating, made a statement that the marketability and profile of the league has been growing around the world, with NBA broadcasting contracts also keeping up with other sporting leagues in the United States.

To round out 2022..

Silver Lake increased their stake in City Football Group to at least 18% at the end of November, while ASICS were listed as a component company on the Dow Jones Sustainability Index in December.