As the isolation measures in the country are seriously affecting the lottery betting market, which are the main fuel of Brazilian sport, the projections are quite pessimistic. At the same time, a number of bureaucratic issues are being relaxed to avoid shortages.
Through the Agnelo/Piva Law, which allocates a percentage of the gross collection of federal lotteries to sports, the COB expected to obtain R$ 312 million (US$59m) this year, with a forecast of R$ 50 million (US$9.4m) (16%) to fund its own administration. The prospect has already been seriously shaken. In 2019, the entity registered a record of R$ 286 million (US$53.5m) in total.
In the second half of March, there was a 56% drop in revenues through this mechanism. Faced with the advancement of COVID-19, the lottery houses were even closed, before reopening and an injunction closing them again. COB projects that the next three months will be impactful, and that, after July, turnover will be 25% to 30% below usual.
"There is no financial activity that will not be impacted by this crisis in Brazil and in the world. Sports will experience a drop in revenues that will limit us. We are very attentive," said COB general director, ex-judoka Rogério Sampaio, in online debate promoted by "TVNSports", last week.
So far, the Special Secretariat for Sport has loosened some measures and is studying others. First, it extended the deadline for proving the application of the resources of the Agnelo/Piva Law received in 2019. The mechanism, which aims at transparency, is essential for sports to receive public funds.
In addition, the government made an exception for entities interested in obtaining or renewing their certifications for complying with the requirements of the Pelé Law to present the accounts approved in 2018 and 2017, instead of those of 2019 and 2018. This is because it is not possible to carry out face-to-face meetings, and most of the confederations' bylaws do not yet provide for deliberations by videoconference. The 2019 proof will be done later.
"The confederations strictly follow what is requested and have a certification to receive funds from the lotteries. These rules make each one has a much larger administrative structure to be able to comply with the rules. This structure has costs, with rent, energy and employees, and there are many. This has brought an increase in the entities,” said Sampaio.
The COB legal officer also defends the amendment of a 2017 ordinance that imposes a 25% ceiling on the use of the Lei Piva resources with administrative expenses, including executive salaries. So far, no one talks about cuts in earnings.
The organization believes that, in times of falling revenue, without spending on sports projects as the athletes are at home, and with employees and accounts payable, the limit should be temporarily increased.
"The maximum percentage that we can achieve for the middle activity (the administration) is not great. If I stop the core activity (the sport), I increase the middle activity, which was projected by 14%. President Paulo Wanderley contacted the Secretary Marcelo Magalhães and explained the difficulties that not only the COB, but the confederations present. The Ministry is studying a solution at least until the end of 2020 and is proving to be sensitive. I am sure he will see that the standards are met. The conversations have been very positive. The government has been a partner of the sports movement in these difficult times,” said Sampaio.
The COB decentralizes values every year to the Olympic confederations, which already deal with a lack of sponsors or, in the case of gymnastics and athletics, with the threat of not renewing contracts with their main partner. Managers fear a real collapse in the face of low lottery revenues.
Sampaio recalls that the Committee has a safety margin to reach the Tokyo Games in 2021, the result of a reservation that is customary for the years of the mega event. In the current Olympic cycle, the uncertainty about resources has led the entity to take precautions, with the structure being reduced. The great difficulty is to close sponsorship contracts.
"The COB, in the last few years, did its homework. It had financial austerity. Employees who received above average values left our staff. We pay salaries in accordance with the market. We have control over several areas. We also renegotiated contracts and complied with scratches our budget. We don’t spend what we can’t. We created contingency resources for possible stoppage of the transfer of lotteries, or decrease in the face of a crisis, like now. I understand that we are one of the few entities in a position to face this moment, at least until the Tokyo Games,” evaluates the official.
Source: Terra
