The coronavirus pandemic has forced the U.S. Olympic and Paralympic Committee to prepare for pay cuts up to 20 percent, according to a letter from CEO Sarah Hirshland that the Associated Press obtained Tuesday. The cuts, which range from 10 to 20 percent, have been described as "necessary to balance both the current delay in revenue and anticipated decline" that the organization is expecting over the next few years.
Among the more surprising pieces of the letter includes a portion of how the USOPC is preparing for the potential devastation that a totally canceled Olympics would cause for them.
"We have to fully understand what that possibility would mean for our organization, so we certainly have considered it and evaluated it," the letter said. "The impact of cancellation would be devastating to our athletes, first and foremost, but also to our financial health and stability. We would survive such a scenario, but the impact would be severe."
This is how bad things are for the committee and its affiliated sports organizations: USA Cycling and USA Track and Field have made staffing cuts, USA Rugby has filed for bankruptcy and the delayed Olympics--now being held in 2021--has put a squeeze on the marketing agreement for the 2028 Games in Los Angeles, which was supposed to begin next year. As the AP notes, "Virtually all Olympic-style marketing deals set for 2021 will need to be altered while many that were set to expire in 2020 could be extended."
The worst-case scenario, as one might imagine, would be if coronavirus turns out not to be under control next summer and the Tokyo Games get scrapped outright. Were that to happen, the USOPC would dip into a $200 million endowment that was created thanks to a surplus from the last time Los Angeles hosted an Olympics in 1984--for that reason, the organization is not getting into that money now to prevent cuts, as the letter explained.
For now, Hirshland has paid lip service to focusing on other avenues of cost-cutting writing in the letter that "we will look at broader program, services and personnel-related costs before we consider cuts or furloughs." The decision on when the 500-person staff will find out about their future income is set to be made in late May.