After Free-Flowing Spending, State-Owned Firms Cut Investments in Olympic Sports

12/20/2016 - 11h29

After more than R$ 3 billion (US$ 882 million) was invested by state-owned entities in preparing athletes for the Rio Games, the financial panorama for Brazilian sports looking to the Tokyo Olympics in 2020 is one of contraction.

State-owned companies have already announced significant cuts for the next few years or put off announcements because negotiations are moving slowly.

Volleyball won, on the courts and on the beach, three medals in the 2016 Olympics. Two were gold and one was silver. Not even this achievement has prevented a reduction in funding.

The Banco do Brazil will provide R$ 218 million (US$ 64.1 million) to the CBV (Brazilian Confederation of Volleyball) throughout the next four years, R$ 84 million (US$ 25 million) less than it provided in the London-Rio cycle (R$ 302.7 million [US$ 89 million]).

The Bank decided that it will increase the funds provided for the Brazilian Handball Confederation in the next two years but doesn't know yet if it will continue sponsoring Robert Scheidt, the two-time Olympic sailing champion with whom it has had a relationship since 2001.

The contract between them ends in February.

With a projected operating loss of R$ 2 billion (US$ 588 million) for 2016, the Post Office has put a huge squeeze on its signed sponsorships.

So far, only its contract with the Brazilian Tennis Confederation has been renewed, but only through 2018. And it was cut by 75% compared to the previous contract.

The sports entity will receive R$2 million (US$ 588 thousand) per season - instead of R$ 8 million (US$ 2.35 million)

Neither Petrobras nor the Caixa National Bank have yet announced their sponsorship plans for the next few years.

FEAR

The economic recession and the resulting flight of investment in sports have been detrimental to Brazilian athletes looking to renew personal sponsorship contracts leading up to the Tokyo Games in 2020.

Not even Olympic medalists have been exempt.

Shooter Felipe Wu, who during the Games in 1996 brought Brazil its first medal (silver) in the category, has a sponsor who provides ammunition, but is seeing uncertainty ahead.

He believes that financial difficulties may retire him from the sport.

"For now, I plan to continue in the sport, but if it turns out that I don't have a sponsor, I'll have to rethink things", he says.

Gold in London-2012 and Silver in Rio-2016, Arthur Zanetti has had difficulty renewing sponsorships.

Up until the last Olympics, ten companies had provided resources. As of now, he still hasn't renewed the relationships.

"We have to be grateful to our sponsors. But they are forecasting a lot of difficulties", confirmed gymnastics manager Marcel Camilo.

Translated by LLOYD HARDER

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