Nike saves UK Athletics from bankruptcy after loss of £3.7million
The British governing body of the Games’ most popular sport needed a renegotiated deal with kit sponsor Nike to stave off bankruptcy. UKA chairman Ian Beattie said: “Accounts on 31 March will show a net liability position of £3.2 million. That's not sustainable going forward.”
The deficit for the year 2022-23 is more than double the loss posted in 2021-22 and comes just two years after UKA had cash reserves of £2.2m.
Great Britain and Northern Ireland enjoyed their best performance at a World Championships since 1993 little more than three months ago. Ten medals in Budapest, including golds for heptathlete Katarina Johnson-Thompson and men’s 1500m star Josh Kerr catapulted them to seventh place in the global table. Yet this success papered over the cracks at home where hosting events accounted for £ 2 million of the total losses.
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The Birmingham Diamond League, the test event for the Commonwealth Games, incurred losses of nearly £800,000. The World Indoor Tour lost around half a million.
“We're projecting a loss of £1.6 million for this year, 2023-24,” continued Beattie. “And a loss of £400,000 for next year, 2024-25 - then moving to a break-even position in 2025-26. But we have a reasonable expectation that the business can still survive and we've spoken to insolvency practitioners to make sure we're right on this.”
The source of that confidence is the long-term kit deal UKA has with Nike which has been extended to 2040 and renegotiated to pay a significant chunk up front. It allowed the organisation to close the financial year with cash in the bank of £6.5 million.
“There's a big difference between what the profit loss account shows and what the cash position does,” Beattie added. “And the reason we can be confident is because we have a strong cash position which gives us time to move back into profitability before we run out of cash.
“If every organisation that was hit with net liabilities was to give up and go into insolvency we probably wouldn't have many football clubs or anything around because that's where they are.
“But as long as they continue to get the cash that allows them to have the certainty they can pay their creditors, and looking ahead the foreseeable future, and a reasonable expectation of turning that around.
UKA lacks both sponsorship revenue and a broadcast contract which means that while 50,000 tickets were sold for the London Diamond League meet in July, that event cost the governing body close to £500,000 to put on.
Bosses insist funding for the Paris Games remains ring-fenced but unless all in the sport wake up to the need to build the profile of track and field the future is bleak.
