IAAF cuts budget to stave off problems

KIEV, Ukraine (AP):

The International Association of Athletics Federations (IAAF) announced yesterday that it was slashing spending to stave off financial problems as a result of the economic crisis.

IAAF President Lamine Diack said the governing body had moved to cut expenses after a meeting in Doha in March, when treasurer Jean Poczubut had presented a bleak view of its finances.

"We are very far from being in a difficult economic situation," Diack said yesterday at the conclusion of the two-day meeting in Ukraine's capital. "We have faced some difficulties, but we are in a very good condition to overcome all of them."

Deal sealed

The budget deficit for 2010, which had earlier been forecast at $16 million, is now around $9 million after the cuts and a deal sealed in June with electronics giant Samsung to sponsor the Diamond League athletics meetings.

That deal is said to be worth around $3 million per year for the next two years, with the option of extending for a third year.

The association has also benefited from the weakening of the euro against the US dollar, which has allowed it to save around $1 million in administrative costs.

Diack said the cuts would not impact the IAAF's "core business or fundamental projects" but said savings had been made across every department, including development projects, administration and doping issues.

Budget savings

IAAF spokesman Nick Davies said the budget savings did not include cuts to prize money for athletes, and that the association would not lay off staff, but seek to reduce costs by reassessing roles.

The IAAF's finances had been hit hard by the economic crisis and a drop in television revenue when a long-term deal with the European Broadcasting Union finished at the end of 2009. The IAAF subsequently signed a significantly smaller deal with Stockholm-based IEC. The association also suffered from a drop in interest on its reserves, which totalled around $81 million at the end of 2008.

Diack said the council had agreed to keep at least one year's budget - around $50 million - in capital reserves.