Successful Olympic Confederations suffer serious financial crisis

In the same year that Brazil had its best campaign in the history of the Olympic and Paralympic Games, entities responsible for managing sports that contributed to these performances are facing a serious financial and administrative crisis.

Currently, five Olympic confederations are prevented from receiving federal funds to which they are entitled, collected from lotteries and divided by the COB (Brazilian Olympic Committee), due to these problems: canoeing, water sports, surfing, sailing and basketball. Together, the first four commemorate six medals at the Tokyo Olympics.

If the problems do not immediately affect high performance, they reflect on the formation of new athletes and expand the negative history of sports management in the country.

In September, shortly after obtaining its first gold medals in the Olympics and Paralympics, the CBCa (Brazilian Canoeing Confederation) announced the end of administrative activities.

With debts considered unpayable arising from 14 tax foreclosures (an audit calculated that the value of the liability could reach R$ 60 million) and an imminent threat of blocking its accounts, the entity decided to dismiss all employees in time to guarantee payment of the employment terminations.

The measure was taken by the then president of the confederation, Jonatan Maia. He had assumed the position in March, two months after the death of João Tomasini, who had headed the CBCa since 1988 — one of the longest-lived directors of Brazilian sport.

The debts caused by unpaid taxes that led to the closure of activities originate in the 1990s, when confederations could have bingos registered in their name to raise funds, even if the administration was from third parties.

The same reason had already caused the bankruptcy of CBVM (Brazilian Sailing and Motor Confederation), later recreated with a new CNPJ and the name CBVela.

In July, the COB (Olympic Committee of Brazil), which also started to be charged for CBVM’s debt, managed to reduce the liabilities from R$ 240 million to R$ 72 million and closed an agreement with the Attorney General of the National Treasury to regularize it in 145 installments.

Two months after the announcement of the closure of CBCa’s administrative activities, Jonatan Maia resigned, and the entity began to be managed by Rafael Girotto.

“The confederation did not stop, it just had a reduction in expenses, it cut expenses and made an agreement with the employees to allow them to be assisted. I am holding meetings with creditors to try to negotiate the debts”, says Girotto.

Currently, four employees and ten volunteers run the CBCa. Without sponsorship and access to federal funds, the entity depends on the COB to intermediate the application of these resources in sports activities. The money, however, cannot be used for administrative maintenance.

“If the CBCa cannot carry out the activities, the CPB [Comitê Paralímpico Brasileiro] and COB can execute them directly, as it is the end area. That is, they [atletas] they will not have problems with travel costs or at the training centers”, says Girotto.

The center in Lagoa Santa (MG), for example, where Isaquias Queiroz trains, was already funded directly by the committee. “The main concern is with the technical body and also with the base, which needs direct support from the confederation”, completes the president.

Grants champion does not have direct access to them

The CBDA (Brazilian Confederation of Water Sports), responsible for five Olympic sports (swimming, open water, artistic swimming, diving and water polo) and three medals in Tokyo, will be in 2022 the confederation entitled to the largest transfer of lottery funds : another R$9.5 million.

Since 2017, however, this money cannot reach the entity’s coffers, which has been prevented from receiving it due to debts with the committee itself and the federal government, in amounts today close to R$ 12 million.

Like canoeing, the CBDA uses lottery resources through the COB and so far sees no risk for high yield. “The entity is totally bankrupt, but the money for water sports continues”, summarizes Renato Cordani, vice president since 2019.

The current debts were generated by problems in the management of Coaracy Nunes (1989-2017), removed from power by court decision and who died last year, and Miguel Cagnoni (2017-2019), removed at the general meeting.

Cagnoni published a letter of resignation shortly before the vote that permanently removed him from office. He said that the problems started in 2016 and that his management resources were always insufficient given the existing expenses.

According to Cordani, revenues in the Olympic cycle that preceded the Rio Games were around R$ 50 million per year, including sponsorship from the Postal Service, which no longer exists.

“[Hoje] we have absolutely zero income. We survived by asking the COB for help, which has already announced that it will not help anymore, so we have reserve to survive until January. If it goes to February and we don’t get any sponsorship, we’ll start to delay salary, condominium…”, warns the manager.

The CBDA currently has 8 CLT employees — in 2016 there were 75 — and no sponsorship, something the vice president hopes to change soon. “After Tokyo, the market’s perception changed a lot. I conducted more than 20 interviews with interested companies, some of which went ahead, and we are convinced that some are going to enter,” he says.

In the case of CBSurf (Brazilian Surfing Confederation), which acts far from the main surfers in the country and criticized by Olympic champion Italo Ferreira, the crisis is not just financial.

Currently, the entity is also unable to receive public funds due to problems in rendering accounts. In 2021, it managed to use via COB BRL 1.4 million of the BRL 4.4 million it would have been entitled to from the lotteries, but it may run out of the BRL 3 million that remain if it fails to present more sports projects or regularize its situation until March 2022.

“We have a small structure. Due to the pandemic, we won some donations from the COB and private funds, and this has been maintaining the confederation”, says the president of the organization, Adalvo Argolo.

Today, CBSurf has no registered employees. In addition to the president, he has a contracted accounting firm, a legal advisor and two employees paid by the COB.

Another problem is the political crisis. President since 2010, Argolo was re-elected in December 2020, but the election ended up being contested in court, which determined that a new election should be held — which has not happened yet.

Sought to comment on the situation of the confederations, the COB says it is attentive and in contact to help when possible: “When there is any impediment to transfer funds, the COB directly executes the sporting projects of the modality that meet the entity’s strategic planning , with the objective of not harming the preparation of teams and athletes”.