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01 Jul 2021

BWF credits reserves for stable financial state after Covid impact

By Tariq Saleh

The Badminton World Federation has managed to maintain a “healthy, stable and solid” financial position despite the impact of the Covid-19 pandemic, and unveiled an updated 2021 calendar as it seeks to resume its major events this year.

Like all international federations, the BWF, which is headquartered in Kuala Lumpur in Malaysia, was adversely affected by the pandemic and the consequent cancellation and postponement of events, with audited financial statements for 2020 showing total gross income of just $3.9 million.

This was down from $25.8 million in 2019, while the overall deficit came to $9.8 million, which compares with $1.8 million in 2019.

However, the BWF said thanks to its “reasonably healthy reserves” it is “well positioned to manage through the impact of Covid-19 in the short term and rebuild its reserves in the medium term".

In its financial report, the federation revealed reserves at year end of $30 million, compared to an expected budget reserve of $44 million.

Through the cancellation of 21 World Tour tournaments, the BWF unsurprisingly suffered a drop in commercial revenue last year, while sponsorship income for its major Thomas and Uber Cup Finals and World Tour Finals was deferred to 2021 due to the events being postponed.

Despite the challenges of the past 18 months, Thomas Lund, the BWF secretary general, believes the federation has been able to steady its ship financially.

Speaking in a virtual press conference today, he said: “We had a significant reduction in our commercial revenues in 2020 simply because of the Covid-19 situation. When the tournaments don’t happen, obviously there’s also a cost reduction so we also don’t pay out some of that money that we would have liked to pay out to keep the tournaments running. But, as they have been cancelled, there is also a cost reduction.

“We have had to manage our financial situation very carefully, we’ve also had to hold back certain things on a range of areas to be able to see what the future brings. We’ve chosen to keep the federation in a healthy, stable and solid situation in terms of our reserves and so on.

“We’re in a healthy situation, but of course it is clearly impacting us as well as every other international federation, but we have been able to sustain a reasonable level of continuing our development activities and continuing the tournaments that we do and all the normal activities but just at a lower level and not doing things that have been impossible to do because of Covid-19. We have had to manage the situation very carefully that’s for sure.”

The BWF has an eight-year media and sponsorship deal with Infront, the international sports marketing agency, running to 2025.

That agreement, which came into effect in 2018 and is worth hundreds of millions of dollars, covers the centralised media and sponsorship rights to the BWF's major events - the Sudirman Cup, the Thomas & Uber Cup Finals and the World Championship – as well as the World Tour series.

Lund admitted the governing body has had to be flexible over the terms of its contract with Infront, as well as with other major partners HSBC and Total Energies, due to the cancellation of events and ongoing complications caused by the global pandemic.

He said: “Of course there have been changes to that [partnership] because we have decided to extend the present cycle of the HSBC BWF World Tour with another year, so the cycle is not four years but is five years and that has certain impacts that we have dealt with and have agreed with Infront as a partner.

“We also have major sponsors such as HSBC and Total Energies and we have loads of agreements with various different broadcasters and, of course, there are impacts on those things, through no fault of our own, but through force majeure reasons we have had to cancel a lot of tournaments in an unprecedented situation.

“So, of course there are impacts on those agreements and it is something we have been handling step by step as we have seen the situation with Covid-19 developing over the past year, but we are in a good place in terms of looking into a brighter future. We can see light at the end of the tunnel.”

Lund continued: “We have had a really good process with both our sponsors and also all of our media partners around the world in mutually understanding the situation and finding reasonable ways of dealing with an unprecedented situation that nobody could have foreseen in any commercial contracts or any commercial collaborations.

“The Infront collaboration is going really well, there is no change in our partnership but what we have been experiencing in the last 18 months is not something we expected to deal with when we went into the partnership but that doesn’t change the partnership and the terms and how we are working together.”

Revised calendar

Earlier this week, the BWF unveiled its updated tournament calendar for the remainder of 2021.

Key changes include the Sudirman Cup Finals being switched to Vantaa in Finland, from 23 September to 3 October, while Indonesia will host a three-tournament Asian leg in a ‘bubble’ environment in Bali between 16 November and 5 December to complete the HSBC BWF World Tour season.

Events were originally scheduled to be held in China but had to be moved as the country’s borders remain shut due to Covid-19.

The Thomas and Uber Cup will be the second major BWF event after the Sudirman Cup Finals, with the postponed 2020 edition taking place in Aarhus, Denmark from 9 to 17 October.       

The World Championships in Huelva, Spain will close out the year.

There will be a total of 14 BWF events in the rest of the year, all taking place after the delayed Tokyo 2020 Olympics, beginning with the Akita Masters in the Japanese city from 17 to 22 August.

The BWF also announced the cancellation of several tournaments set for the second half of the year including the Victor and Fuzhou China Opens, the Japan Open, the India Open and the Hong Kong Open.

The New Zealand Open, Australia Open, Hyderabad Open in India and Vietnam Open have also been cancelled.

In addition, the Malaysia Masters, Malaysia Open and Korea Masters have all been postponed.

The BWF said the changes “represent the best and most feasible opportunity for badminton tournaments to resume with regularity over the next six months".

Lund said: “The new calendar represents an assessment of what are the most feasible tournaments to take place in the coming months. Europe is seen as a more feasible region to conduct tournaments at this present time with higher rates of vaccine implementation and less travel restrictions.

“While a number of tournament hosts in Asia are eager to stage tournaments, the general feedback surrounding COVID-19 restrictions and the uncertainty of the situation there has meant that it is likely only a few tournaments could possibly take place.

“Without such a shift in focus, we would not be able to present consistent opportunities for our athletes to play again, and therefore, secure the most important deliverables for sponsors and broadcasters, bring the highest possible prize money to players on the World Tour, and safeguard the long-term future of badminton.”