To be fair to the ISU:
No doubt it already has lost significant $$$ because of the cancellation of TEB. For example:
It probably has to return some of the money that it received for broadcast/streaming rights.
Ticketholders are getting refunds.
Any extra costs involved in handling the response to the cancellation of TEB will be a double-whammy.
Money is king for anyone and everyone on the planet. The ISU cannot be blamed for that reality.
I do
NOT think there has been much $$$ lost due to the cancellation...
REVENUES:
Yes, there will be some loss due to ticket refunds; however I believe revenues from ticket sales at GP events usually comprise less than
33% of total revenues!? In the current TEB case, half the competition was cancelled (plus the popular exhibition) so refunds likely will amount to a maximum of ~⅔ (or ~66%) of
total ticket revenues; which, assuming my 33% figure is correct, equates to
~22% of event revenues (= ⅔ x 33%).
Where does the other
67% of event revenues come from? My understanding is that it comes from a combination of local event AND other ISU funding sources, including:
- National or Regional Government funding/support (local)
- Host City funding/support (local)
- Association funding/support (e.g. USFSA contributing towards Skate America budget) (local)
- Advertising/sponsorship fees (local and ISU)
- Broadcasting rights (mostly ISU, some local)
- Revenue from the "big" events (like the World Championships, or perhaps the GPF). In other words, "ISU General Funds" (ISU)
If someone knows otherwise about the
typical revenue breakdown for GP event competitions, please post a reply.
EXPENSES:
The majority of costs will have been budgeted for; so
NO "extra" costs involved due to the cancellation. For example:
- facility (ice) rental
- hotels, meals & flights for officials
- promotion/posters/programs
- technical crews (ice preparation, installation of computer systems, video/camera set-up)
I̶ ̶b̶e̶l̶i̶e̶v̶e̶ ̶e̶v̶e̶n̶ ̶t̶h̶e̶ ̶
c̶u̶r̶r̶e̶n̶t̶ ̶I̶S̶U̶ ̶m̶e̶e̶t̶i̶n̶g̶ ̶i̶n̶ ̶L̶a̶u̶s̶a̶n̶n̶e̶ ̶(̶w̶h̶e̶r̶e̶ ̶t̶h̶e̶y̶ ̶a̶r̶e̶ ̶d̶e̶b̶a̶t̶i̶n̶g̶ ̶h̶o̶w̶ ̶t̶o̶ ̶a̶w̶a̶r̶d̶ ̶p̶o̶i̶n̶t̶s̶ ̶f̶o̶r̶ ̶t̶h̶e̶ ̶G̶P̶F̶)̶ ̶w̶a̶s̶ ̶a̶l̶r̶e̶a̶d̶y̶ ̶s̶c̶h̶e̶d̶u̶l̶e̶d̶ ̶t̶o̶ ̶o̶c̶c̶u̶r̶;̶ ̶s̶o̶ ̶n̶o̶ ̶a̶d̶d̶i̶t̶i̶o̶n̶a̶l̶ ̶c̶o̶s̶t̶s̶ ̶t̶h̶e̶r̶e̶.̶
The
major broadcast rights (held by the big broadcasters worldwide) are normally sold on a 'per-season' or even 'multi-year' basis (not usually event-to-event). When they purchase those rights, there will be a
Force Majeure clause in the contract that essentially frees both parties from liability or obligation as a result of an extraordinary event or circumstance beyond the control of the parties. So, the ISU will
NOT have to reimburse broadcasters.
Similarly, the
home broadcaster (who sets up the cameras and employs the cameramen at the event) will have signed a contract containing a
Force Majeure clause.
The cancellation of TEB, due to
terrorist activity, would almost certainly qualify under a Force Majeure clause.
FYI - the sort of things that would
NOT qualify under a Force Majeure clause (source: Wikipedia):
Force majeure is generally intended to include occurrences
beyond the reasonable control of a party, and therefore would
not cover:
- Any result of the negligence or malfeasance of a party, which has a materially adverse effect on the ability of such party to perform its obligations;
- Any result of the usual and natural consequences of external forces (for example, predicted rain stops an outdoor event); and
- Any circumstances that are specifically contemplated (included) in the contract.
BALANCE SHEET:
So, as best as I can figure it...
REVENUES ≧ 78% of event budget
EXPENSES = same as event budget
Of course, everything is relative ... however, to this point, I do
NOT think the ISU has lost
significant $$$ because of the cancellation of TEB. Yes, they will be short some revenue; but, it is a "drop in the bucket" when looking at the ISU's overall yearly budget!
