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Three medals with Olympic Flag

From Tokyo 2020 to financial challenges: How British Olympic CFO manages financial risks


The British Olympic Association’s CFO talks to AccountingWEB about carrying the financial torch in the run-up to Tokyo 2020, including forecasting and budgeting, managing financial risks, and hitting revenue targets.

24th Oct 2019
Sports business reporter
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David Glassey has one eye on Tokyo 2020 and the other on the winter and summer Games that follow – such is the cyclical nature of the Olympic business.

The British Olympic Association’s (BOA) chief financial officer, who came on board in April 2015, a year before the Rio Games, is now dealing with similar financial challenges in the run-up to the Tokyo Olympics.

“As a proposition to commercial partners, the BOA is more attractive the closer you get to the summer Games,” he tells AccountingWEB, adding that there’s a lower appetite from sponsors wishing to be linked to the winter Olympics.

“The summer Games is still really the big event. That’s when potential partners really focus on it and see the opportunity to be associated with us.”

In this 2017-20 quadrennium, the Olympic governing body portrays itself as an increasingly self-sufficient business which yields modest profits in most years. But non-Games years are tough on the income generation front.

Glassey underlines the volatility of the Olympic cycle and its financial impacts. “At the beginning of a four-year period, we might only have 60% of revenue that we know we are going to get…. we probably need to spend at least 80% of it. So we have that 20% gap before we even start.”

Tokyo 2020 Summer Olympics

Tokyo targets

For Tokyo 2020, the BOA has 11 official partners signed up. Glassey confirmed that discussions are taking place with potential sponsors, which will swell that number to at least 15 by the time of the Games. The opportunity to activate around an Olympics and value in kind deals brings a “spike in revenues”.

The BOA has achieved about 84% of its £60m plus revenue target for the Tokyo Games; it expects to raise another £10m through sponsorship, fundraising and licensing.

“If we hit our targets, it’s actually more money than we need to deliver the Games. We hope we can start to build a bit of a war chest in this quad,” he revealed, adding that the Paris 2024 Olympics was set to be much cheaper than Los Angeles 2028 – “another expensive Games” –due to travel costs for the British Olympic family of athletes, coaches, entourage and staff.

An increase in revenues from the International Olympic Committee for the Tokyo Games, compared to the £430m shared among international federations and national Olympic committees from the PyeongChang 2018 Winter Olympics will help build cash reserves.

Integrating the finance department

Glassey points to a change in mentality at the BOA in recent years around budgeting and forecasting to better deal with the uncertain financial landscape of the Olympic business: “We are constantly looking at the four-year cycle, not just the current year in terms of our decision-making and what we can afford to do.”

It’s part of a rebooting of financial management systems Glassey spearheaded on joining when he was immediately confronted with an array of challenges.

I come from a background where finance should be a true business partner integrated into decision-making

“The biggest was that there wasn’t really a detailed budget for Rio, which was obviously a substantial amount of our spend over the quad. That took quite a long time to get into place,” he recalled.

“I also encountered that finance was regarded very much as a back office function,” said the former head of finance and operations for the London 2012 Olympic organising committee, who has also worked for the NHS.

“I come from a background where finance should be a true business partner integrated into decision-making, helping resolve issues as well as adding up the numbers and making sure they’re all in place.”

‘Spend what we can afford’

So how does he manage the financial risks over a quadrennium?

Glassey said securing early renewals with partners was crucial. Adidas, for instance, are signed up through Paris 2024, and Aldi until 2025. “It’s good to have a bedrock of those bigger partners that give you some sustainability from a financial point of view,” he said.

“If we can sign some of those up we will go into the next quad with 60%-plus secured, that puts us in a good place.”

Commenting on the BOA’s overall financial management, he added: “We have set a mantra that we only spend what we can afford, so even though we know there is a gap we will go through the budget in a lot of detail and identify elements that will only be released for people to spend once we have achieved the revenue.”

Team GB winning gold

Cost controls and maximising revenues

The BOA posted a turnover of £10.8m for 2018, recording a 0.8m loss, similar figures to the previous quad.

“We are already starting to take a look at the next quad. The second year of a quad is always going to be difficult getting to break even or profit because the cost of the winter Olympics is so great and by that time you haven’t got your sponsorship stream fully online,” Glassey admitted.

This will partly be achieved by hitting revenue targets and astute cost control management; a greater reliance on fixed-term contractors rather than permanent employees, meaning there is a more flexible workforce.

Glassey’s wealth of finance experience from his London Olympic role and NHS positions have helped reshape the BOA’s financial standing, particularly on expenditure control: “It’s a balance of being there to work with the business to help them solve their problems… but also when you need to you are going to challenge them as well.”

Accounting systems bring benefits

Glassey introduced the Access Dimensions cloud-based accounting software to the BOA in April 2018 – and it’s vastly improved financial management.

“Regardless of who is spending money, whether it’s the Games department or in marketing, or Olympic relations, we can now capture all of costs related to a particular Games as well as departmental reports which gives us a lot more clarity,” he said, adding that one benefit was getting the management accounts out much quicker into the hands of the BOA’s budget holders.

Recognising that it has a mobile workforce, the BOA’s departmental heads and finance staff can “work on the go”, accessing the cloud-based system to assess reports and budgets. An expenses module can also be operated remotely by employees.

People come to us all the time now to discuss things as opposed to finance just being as a function that sits in the corner

For Glassey, the biggest change is recognition of the finance department as a vital cog in the BOA machine.

“People come to us all the time now to discuss things as opposed to finance just being as a function that sits in the corner somewhere and does the payroll and pays suppliers,” he explained.

Artificial intelligence

There’s progress elsewhere, including moving forecasting to a rolling four-year process “so we always have visibility on four years”.

“I think there was a danger that you get to end of the quad and it’s almost like ‘the world has ended’ and you don’t know what’s happening in the next quad,” he said. “We are getting people to think about the next quad now which I think some of them found quite strange when we have Tokyo on the doorstep.”

The rolling forecast mechanism calls for the BOA’s finance team to sit down monthly with every functional head to scrutinise their numbers and look at the forecasts before a formal update for every quarter is reported to the board. This helps inform the budgeting process.

“The key thing we are monitoring all the time is how much revenue we still have to go, how much expenditure is committed and how much of that uncommitted expenditure can we fall back on if we needed to,” he added.

He believes new chief executive Andy Anson, starting next month, will help improve the BOA’s financial welfare further. Glassey expects a strong focus on managing the financial risks, looking at contingencies and raising revenues: “From initial meetings with him, we are very much aligned on where we need to be.”

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