FIE: And The Money Keeps Rolling in

The International Olympic Committee (IOC) is a multibillion-dollar enterprise, generating approximately $7.6 billion in revenue from 2017 to 2021. This income was primarily sourced primarily from broadcasting rights, marketing rights, and sponsor donations.  The IOC allocates its funds to support various Olympic organizations and initiatives, including: National Olympic Associations; International Federations governing each Olympic sport; Winter and Summer Olympics; World Anti-Doping Agency (WADA); Youth Olympic Games; and Associations of Olympic Sports.
The Olympic Movement faces numerous challenges, including:
1. Soaring hosting costs, necessitating increased sponsorship and revenue.
2. Politics increasingly encroaching on sports.
3. Threats of terrorism, a concern since the 1972 Munich Games.
4. Societal transformations and shifting values.
5. Wars and invasions, such as the USSR's invasion of Afghanistan in 1978 and Russia's invasion of Ukraine in 2022, which have led to boycotts and sanctions.
6. The IOC's policy of introducing new sports, sometimes at the expense of existing ones.
7. Countries exploiting sports, including the Olympics, to gloss over their discriminatory treatment of women and migrant workers.
8. A growing culture of corruption, undermining the integrity of the Olympic Movement.
Let's examine the FIE's funding structure. The table below illustrates the IOC's funding levels for Summer Olympic Sports. I've categorized the sports into six groups based on their historical IOC funding levels over the past two Olympic cycles (Rio and Tokyo). These classifications are arbitrary and based on data from ASOIF (Association of Summer Olympics International Federations). The allocated amounts cover a four-year period (one Olympic cycle).

IOC Funding* for one Olympic Cycle – 4 years in million of USD per each international federation	GROUP 1 $39.48 (1 Sport)	GROUP 2 $31.36 ( 2 Sports)	GROUP 3 $24.34mm (5 Sports)	GROUP 4 $17.31 (8 Sports)	GROUP 5 $15.14 (9 Sports)	GROUP 6 $12.98 (3 Sports)	TOTAL
	ATHLETICS	GYMNASTICS	BASKETBALL	BOXING	EQUESTRIAN	PENTHATLON
		AQUATICS	SOCCER	BADMINTON	FENCING	GOLF
			VOLLEYBALL	ROWING	HOCKEY	RUGBY
			TENNIS	JUDO	CANOEING
			CYCLING	SHOOTING	HANDBALL
				TABLE TENNIS	TRIATHLON
				WEIGHLIFTING	WRESTLING
				ARCHERY	SAILING
					TAEKWONDO
SUBTOTALS	$39.48mm	$67.72mm	$121.7mm	$138.48	$136.26mm	$38.94	$542.58mm

*Tokyo 2020; NB: Rio 2016 had the same level of funding.

As shown in the Table above, fencing falls under Group 5, receiving $15.5 million alongside eight other sports. While funding disparities are understandable for sports in Groups 1-3, the differences between Groups 4 and 5 seem less clear-cut. Interestingly, I discovered that the IOC's criteria for allocating these funds are not publicly available. After contacting the IOC, they directed me to ASOIF, the organization responsible for making these allocations. Despite my written inquiry on January 13, 2023, ASOIF has yet to respond. This lack of transparency raises concerns. It's surprising that the IOC wouldn't disclose the criteria for allocating billions of dollars, especially when these funds come from sponsors and donors. Notably, three top IOC sponsors – Panasonic, Bridgestone, and Toyota – withdrew their support for the Paris 2024 Games. While this isn't the first time a major sponsor has withdrawn (McDonald's in 2017), the Olympic Games' massive global audience will continue to attract top sponsors despite concerns.
A review of the FIE's financial statements confirms that, in recent years, the primary source of funding has not been the IOC, but rather the FIE President, Mr. Usmanov. His generosity has provided the FIE with approximately 5 million Swiss Francs annually, equivalent to at least $20 million per Olympic cycle (conservatively converted to USD). If the FIE were a publicly traded company, Mr. Usmanov would be its majority shareholder, effectively controlling the organization. In 2022, his funding accounted for 93% of the FIE's entire budget. https://www.insidethegames.biz/articles/1117949/david-owen-blog-on-alisher-usmanov.
If we add to the funding from the IOC Mr. Usmanov’s personal contribution, the FIE's ranking jumps to second place in Group 2, as illustrated in the revised table below.

GROUP 1 $39.48 (1 Sport)	GROUP 2 $35.14 (1 Sport)	GROUP 3 $31.36 ( 2 Sports)	GROUP 4 $24.34mm (5 Sports)	GROUP 5 $17.31 (8 Sports)	GROUP 6 $15.14 (8 Sports)	GROUP 7 $12.98 (3 Sports)
ATHLETICS	FENCING	GYMNASTICS	BASKETBALL	BOXING	EQUESTRIAN	PENTHATLON
		AQUATICS	FOOTBALL**	BADMINTON	HOCKEY	GOLF
			VOLLEYBALL	ROWING	CANOEING	RUGBY
			TENNIS	JUDO	HANDBALL
			CYCLING	SHOOTING	TRIATHLON
				TABLE TENNIS	WRESTLING
				WEIGHLIFTING	SAILING
				ARCHERY	TAEKWONDO

Please note that this table is incomplete, as it doesn't reflect additional funding sources for other listed federations, likely substantial for sports in Groups 1, 2, and 3. However, this table highlights the FIE's privileged financial position, thanks to Mr. Usmanov's generosity. This "privileged" position was acquired without discipline, akin to winning the lottery. It wasn't earned through increased TV popularity, successful fundraising, or diverse sponsorship. Instead, Mr. Usmanov's passion for fencing and philanthropy have significantly contributed to the FIE's financial stability. It is important to note that there is nothing inherently wrong with wealthy individuals supporting international organizations, even if it means exerting control over them, whether directly and indirectly.

Mr. Usmanov's generosity extends beyond direct funding to the FIE. He has also established charitable foundations, such as the Future of Fencing (FOF), which support FIE constituents. Founded in 2005, FOF donates approximately €3-5 million annually to National Fencing Federations, equivalent to around $3-5 million USD. As the founder, Mr. Usmanov appears to retain control of FOF, which plays a vital role in promoting international fencing. This philanthropic effort was a key factor in Mr. Usmanov's decision to accept the FIE presidency nomination in 2021, as stated in his acceptance speech.

“Moreover, we have a fund for the development of fencing. Next year, I will change its President because our Russian President, Mr. Mikhailov, retired. I want to thank him from the Executive Committee, from myself personally, and Congress because we don’t have a single Federation that hasn’t had help from this local fund . We need to thank Mr. Mikhailov as the President of this fund. [Emphasis added].

Applause

We need to continue the work of this Fund that is between three to five million euro a year and additional money which we can spend on our sport, In addition to our Federation expenses. Because of this, I understand my responsibility to follow the recommendation of the IOC President to keep my nomination. I consulted with Nathalie, Mr. Katsiadakis, and many others who approached him.”

Undoubtedly, Mr. Usmanov is the most significant benefactor in the history of international fencing. Notably, in 2021, he established a fund to support veteran fencers, seeding it with an initial donation of €10 million (approximately $10,541,900 USD).

            We don’t calculate the money that we spend to help our Veterans. Actually, we increased that amount and created a Fund, to help Veterans, and this Fund works. The first base sum that I put down is  €10miilion.” FIE Minutes 2021 Congress. 

Another organization contributing funds to national fencing federations, particularly in Asia, is the International Fencing Academy (IFA), headquartered in Tashkent, Uzbekistan. https://ocasia.org/news/459-international-fencing-academy-to-be-built-in-tashkent.html According to the linked article, the IFA was established in 2020, with the support of the FIE. However, the organization's funding sources and potential connections to Mr. Usmanov's philanthropy are not known. Presumably, that information is available to the FIE, since it supported its foundation. The IFA appears to engage in activities similar to those of the Foundation for the Future of Fencing. For instance, it sponsors the attendance of top executives from Asian national fencing federations at conferences, such as the Development and Popularization of Fencing in the World, Problems, and Solutions event held on March 10, 2023. This conference coincided with two other significant events: the Juniors and Cadets Asian Fencing Championships and the Extraordinary FIE Congress to vote on the reentry of  fencers from Russia and Belarus.

 The IFA's invitation letter to Asian federation presidents stated, in part: The International Fencing Academy will cover the cost for one leader from your federation for flight tickets, accommodations and meals at the Hotel Hayat Regency Tashkent from March 9 till 11, 2023.

Mr. Usmanov's indirect contributions to the FIE significantly impact the organization's funding. As a result, fencing moves to first place (Group 1) in the revised IOC funding table, reflecting an additional conservative estimate of $1.5 million per year, per Olympic cycle. The chart below outlines the IOC's and Mr. Usmanov's direct and indirect contributions to the FIE's budget, excluding the International Academy of Fencing.

GROUP 1 $41.14 (1 Sport)	GROUP 2 $39.38 (1 Sport)	GROUP 3 $31.36 ( 2 Sports)	GROUP 4 $24.34mm (5 Sports)	GROUP 5 $17.31 (8 Sports)	GROUP 6 $15.14 (8 Sports)	GROUP 7 $12.98 (3 Sports)
FENCING	ATHLETICS	GYMNASTICS	BASKETBALL	BOXING	EQUESTRIAN	PENTHATLON
		AQUATICS	FOOTBALL**	BADMINTON	HOCKEY	GOLF
			VOLLEYBALL	ROWING	CANOEING	RUGBY
			TENNIS	JUDO	HANDBALL
			CYCLING	SHOOTING	TRIATHLON
				TABLE TENNIS	WRESTLING
				WEIGHLIFTING	SAILING
				ARCHERY	TAEKWONDO

The chart below details  the IOC’s  and Mr. Usmanov’s   direct and indirect  contributions to the FIE’s budget with the exception of the International Academy of Fencing.

While this funding structure undoubtedly benefits the FIE and Olympic fencing, two main drawbacks exist:
1. The FIE relies heavily on a single benefactor who is also the organization's President. This situation is potentially fraught with conflicts of interest, requiring careful management by the Executive Committee.
2. The FIE has become almost exclusively dependent on one sponsor.
With respect to point 1, above, when combined with a lack of transparency in governance, these drawbacks can lead to speculation and allegations, such as vote-buying. However, it is more productive to focus on improving the FIE's governance rather than dwelling on unsubstantiated rumors or allegations. Therefore, to enhance the governance of international competitive fencing, I recommend the following:

-          The FIE should implement a rigorous, transparent, and publicly accessible procurement process for vendor selection. This process should be clearly outlined on the FIE's official website, ensuring accountability and openness in its business dealings.

-          To uphold the highest ethical standards, the FIE should adopt and enforce the "Appearance of Impropriety Standard" in conjunction with its improving its conflict of interest policies. This dual approach will ensure that not only are actual conflicts of interest addressed, but also any situations that may give the appearance of impropriety are carefully managed and avoided.

-          New national federations admitted to the FIE should undergo a 4-year probationary period. During this time, they must achieve specific milestones tailored to their country's demographics and capabilities. Only upon meeting these milestones at the end of the probationary period will they earn the right to vote. This proposal aims to prevent the creation of "paper national federations" solely for the purpose of gaining additional votes, which could undermine the FIE's mission to establish genuine national federations.

-          Allowing national federations to replace their representatives on the executive committee is crucial for effective governance. This flexibility is particularly important since national federation elections and FIE elections don't align, which can lead to mismatched representation. By permitting replacements, national federations can ensure their interests are consistently and continuously represented on the executive committee. This provision also acknowledges that changes in national federation leadership shouldn't hinder their ability to participate in FIE decision-making processes. To implement this, the FIE could establish clear guidelines for national federations to replace their representatives, including notification procedures and timelines. This would help maintain continuity and prevent disruptions to the executive committee's work.

-          To ensure transparency and accountability, the FIE should: (a) Establish clear guidelines and procedures to limit the arbitrary discretion of its Executive Committee in interpreting statutes. This will prevent subjective decision-making and ensure consistency in the application of rules; and (b) Repeal the gag rule (with the proper exceptions) that restricts members of its Executive Committee from discussing matters FIE matters. This will foster a culture of openness, encourage constructive debate, and promote more informed decision-making.

-          The FIE Statute requires amendment to incorporate provisions enabling the Executive Committee to suspend the President and/or Officers under extraordinary circumstances. To maintain accountability and prevent abuse of power, any suspension must be initiated and decided by the Executive Committee. Furthermore, the amended statute should explicitly prohibit self-suspension by the President and/or Officers, ensuring that such actions are subject to oversight and approval by the Executive Committee.

-           Mr. Usmanov should consolidate and streamline the funds he provides to external foundations that support national federations through the FIE. This restructuring will enhance transparency, minimize the risk of conflicts of interest, and prevent any appearance of impropriety.

Regarding Point 2, a critical concern arises: what happens when the financial support ceases? Interestingly, Mr. Usmanov has personally addressed this very question:

Alisher Usmanov: This is where the possibility is to find some source for the commercialization of our sport. Why does tennis attract so much attention from these sponsors? Why not fencing? There are no real figures, but Dota, and other games are very popular. We must make our fighting interesting, bright, and understandable? We need to think about this. This is the strategic way to find a future for fencing because Usmanov will not last forever. If I create a noble endowment fund, it is still not enough in any case. How much money does the bank pay for endowment today, one percent, right?

Nathalie Rodriguez: Here, yes. One percent, maximum.

Alisher Usmanov: To get ten million, you must put in one billion. I can’t. (Laughter) Please be more realistic and support us.” See, FIE Minutes of 2021 Congress

To me, the answer to that question is unequivocal: Après lui, le déluge! This French phrase succinctly captures the potential consequences of relying heavily on a single benefactor, highlighting the uncertainty and potential instability that may follow when that support ceases.

Gil Pezza