Finance & Governance Forum 2009 Finance & Governance Forum The Oval 19 th May 2010

Finance & Governance Forum 2009

Finance & Governance Forum

The Oval 19th May 2010


Welcome

John Crowther, Chair


Baroness Sue Campbell CBE

Chair

UK Sport


The Sporting Legacy from 2012


Sport At Heart of 2012

“British athlete success is not just the icing on the cake – it’s pretty much the whole ingredients. It’s crucial.”

Lord Sebastian Coe, Chairman London 2012


2012: Legacy Now


2012: Legacy Now


2012: Legacy Now


2012: Legacy Now

International Inspiration:

To enrich the lives of 12 million children of all abilities in schools and communities in 20 countries through the power of high quality and inclusive physical education, sport and play


Hard Legacy: The Decade of Sport

2010 2012 2014 2016 2018

GeneralElection

CSR

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2012 Legacy: Vision

“Thanks to unprecedented amounts of public funding, British Olympic and Paralympic sport is a success story: unrecognisable from even ten years

ago. The current system is working and has achieved an incredible amount.

“The true legacy of 2012 will be whether we continue

to sustain and build on that momentum, or fail to capitalise and believe the job is done after the Games.

“London should be a key stage of a long journey, not our destination.”

The UK has and sustains THE world-leading high performance sport system post 2012


2012 Legacy: VisionAll involved in high performance sport must: • maintain through to major Olympic, Paralympic and

Commonwealth events - like Glasgow 2014, Sochi 2014, Rio 2016 and beyond - a strategic long-term target for medal success;

• continue to demonstrate that sport can have a substantial

positive impact on society and wider government policy;

• build on current levels of investment through effective partnership between the public and private sectors;

• continue to build on the substantial learning, achievements and improvements of the past decade, recognising that the current system works and provides a strong foundation on which to build.


Sustaining the Vision


Funding Principles

• Our performance mandate is success in Olympic and Paralympic sport

• Our investments recognise best practice in teamship, openness and accountability in support of UK athletes

• The principles for Olympic and Paralympic investment are the same whilst the Olympic and Paralympic models reflect the different domains


Funding Principles

• Awards are based on current performances and future medal potential using an investment model that links resources directly to athlete places

• UK Sport strives to make four-year investments to cover a complete Olympic/Paralympic cycle but base these on an eight-year development model

• Awards are reviewed annually to ensure maximum impact on the resources available at that time

• WCP Funding is a privilege not a right!


Conclusion• 2012 Legacy happening NOW

• Key will be maintaining this post 2012 – resources, structure, intent, people

• Tough times ahead – need to be smart, agile and together

• Need to show the power of sport - what it can be, what it can deliver

• Ultimate legacy will be evidence of transformational ability that sport has to touch and change lives


Baroness Sue Campbell CBE

Chair

UK Sport


Your name

The your job title and organisation

You can delete this box and replace it with your logo

11.15-11.30 Break


Team 2012 fundraising and the commercial landscape in elite sport

Tim Hollingsworth, Director of Policy and Communications, UK Sport


Current Commercial Landscape

• Unprecedented levels of sponsorship revenues within Olympic/Paralympic movement

• LOCOG- 28 x Domestic Partners (7 x Tier 1; 6 x Tier 2; 15 x Tier 3)

- Over £600M already raised towards £700M sponsorship target

• NGBs and Athletes also benefiting- British Gas / Swimming, Sky / British Cycling, GE / British Triathlon

- Victoria Pendleton / Hovis;

• But … many Olympic and Paralympic sports remain un-sponsored!

• And … many sports outside of that environment


NGB Commercial Deal Summary (excluding Football and Tennis)

Tier 1 High Level Deals

Tier 2 Mid Level Deals

Tier 3 Unsponsored

Athletics Aviva

Badminton CenterParcs

Boxing

Swimming British Gas

Basketball Standard Life

Gymnastics

Cycling Sky

Equestrian Subaru

Hockey

Sailing Skandia

Triathlon GE

Judo

Rowing Siemens

Fencing Lloyd and Partners

Modern Pentathlon

Canoeing Tesco

All other funded sports

20 x sponsored and 27 x unsponsored sporting disciplines


Olympic/Paralympic Sport Commercial Structure

OlympicFootball

FIFA/UEFA Partners

Premier League Partners

IOC/LOCOG Partners

BOA/BPA Partners

UK Sport/Team 2012 Partners

NGB Partners

Athlete Endorsements

Club Sponsors

Player Endorsements

England Partners


What is Team 2012?

• The world’s largest national team ever sponsored with over 1,200 athletes from 47 sports and disciplines

• Joint venture between UK Sport, BOA, BPA and LOCOG

• Designed to create a private sector stream of funding for Olympic and Paralympic sport to compliment Lottery and Exchequer funding


What is Team 2012?

• £25 million revenue target

• Utilising rights and properties provided by the partners – including athlete appearances and image rights

• Money primarily distributed through UK Sport’s World Class Performance Programme


Overall Ambitions of Team 2012?

£25m?

Sponsorship Programme

Fundraising Programme

Patron of British Sport

Individual/Corporate donations

SME Programme

£13m?

£12m?

Public Appeal


Visa – The Presenting Partner

• Exclusive status as Presenting Partner until December 2012

• Plan to take Team 2012 “into every household and every retailer”

• Three principle benefits –

- Athlete “Personal Appearances”- Money-can’t-buy “Experiences”

- Access to athlete image rights for marketing campaigns (controlled)


What next for Team 2012?

• Secondary Partners- Active negotiations with 2012

sponsors

• Appeal- 2 x Patrons of British Sport and 25 x

Ambassadors confirmed

• SME Programme- Aiming to launch in next quarter- Initial target of 250 x SMEs

• Media Partner- On-going discussions with News

International and Telegraph / Mirror Group


Post 2012 Commercial Landscape – Team 2012

• Team 2012 designed to create a “lasting legacy of private sector income” into elite sport

• Commitment from UK Sport, BOA and BPA to retain the joint venture post 2012

• Real opportunity for third stream to evolve into “Team 2016” or similar

• On-going stakeholder discussions as to whether to incorporate Winter Sports – Team 2014


Post 2012 Commercial Landscape – Key Questions

• Will LOCOG commercial partners retain an association with sport?

- Has London 2012 games demonstrated a measurable return on investment? - What percentage of the £700M LOCOG sponsorship fees will continue to be channelled into elite sport?

• How will the British Olympic and Paralympic Associations take forward Team GB and Paralympics GB after the rights revert to them in 2013?


Post 2012 Commercial Landscape – Key Questions

• Will NGB’s/Athletes be able to renew their existing sponsorship deals at similar fee levels?

- Delivering real value from innovative partnerships will be crucial to ensuring their longevity

• Will other external factors influence the commercial revenues invested into sport?

- Focus on elite sport will move from Olympic/Paralympic sports to Rugby, Cricket and Football - Will financial markets undermine the commercial success of a “decade of elite sport in the UK”?


Conclusion

• London 2012 can be the catalyst for the on-going commercial success of elite Olympic/Paralympic sport in this country

• Team 2012 has demonstrated the power of athletes in attracting sponsors

• Government will expect and require a “third stream” to continue

• All sports must be thinking now about the post 2012 funding landscape


Team 2012 fundraising and commercial landscape in elite sport

Tim Hollingsworth, Director of Policy and Communications, UK Sport


Antonis Patrikios

Senior Associate

Field Fisher Waterhouse


Data and Information Security and NGBs

• Key data protection concepts

• The new legal framework for data security

• Achieving legal compliance


What is data protection law about?

• Gives individuals the right to control how their personal data is used

• Places obligations on organisations that use personal data

• NGBs are subject to data protection law because they process personal data of individuals, e.g. employees, volunteers, athletes, etc and possibly share it with, e.g., other NGBs, sports medicine and science consultants

• Key legal instruments:

• EU Data Protection Directive 1995• UK Data Protection Act 1998


Key data protection concepts

• Personal data

• Sensitive personal data

• Processing

• Data controller

• Data processor

• Data subject


Obligations

• Notification

• Information provision (Principle 1)

• Fair processing conditions (Sch. 2 & 3)

• Quality of data (Principles 3, 4 and 5)

• Security (Principle 7)• When engaging a data processor, a contract is required• Appropriate technical and organisational measures

• Adequate protection for international transfers (Principle 8)


Individuals’ rights

• Subject access

• Preventing damage and distress

• Objecting to direct marketing

• Blocking automated decision-taking

• Rectification, blocking, erasure and destruction

• Compensation if damage or distress is suffered


Enforcement

• Request for assessment by individual

• Information notices

• Enforcement notices

• Criminal offences

• New assessment notices regime

• New fines up to £500,000


Reputational and brand damage


The new legal framework for data security• Data security law

• Key themes:

• A new cycle of legal development commenced in 2003

• The Regulatory Bear Market

• The trajectory of the law is towards more disputes and litigation


The Terminator targets security breaches

• SB 1386, 2003

• Political dynamic

• Transparency mechanism

• Mandating PETs

• Mitigation

• Power shift


Political dynamic in the UK - HMRC

• 2 disks

• 25,000,000 people

• 7,000,000 households

• £1.5 bn value to criminals

• £20,000 reward for return

• 3 inquiries

• 1 Data Handling Review

• 1 enforcement notice


Blast off!

• Encryption guidance, November 2007

• Breach handling & disclosure, March 2008

• FSA financial crime report, April 2008

• Criminal Justice & Immigration Act, May 2008

• Coroners & Justice Act, November 2009


Components of the new legal framework• Legislation

• Government policy

• Regulatory guidance

• Rules for best practice • Enforcement actions

• Case law

• Private law arrangements

• Breach disclosure (forthcoming EU regime)


The regulatory bear market

• cf Financial Bear Market: pessimism, loss of confidence & negative sentiment leading to uncertainty and negative outcome

• Regulatory Bear Market• Ability of controllers to keep data safe & secure• Ability of law to cure this problem• Regulator’s own standing

• Increased regulatory activism:• Campaigning for new powers and penalties• Regulating for publicity

• Increased intervention:• Transition from light touch to heavy touch• Greater use of enforcement powers


Financial penalties

• Serious contravention of data protection principles

• Likely to cause substantial damage or distress

• Deliberate, or

• Knew or ought to have known (a) risk, (b) likely to cause damage … but failed to take reasonable steps to prevent


Audits and inspections

• Assessment notices

• Government departments, public authorities & designated data controllers

• Allow access to premises, equipment, people etc

• Links to search warrants


Beating the bear by focusing on systems• Systems v. operational regulation

• Security policy

• Contract initiation

• Project initiation

• Worker adequacy

• Third party assurance

• Culture


Why systems?

• Systems and operations

• Open to scrutiny

• With potential for great downside

• Due to high probability of security incidents

• Tools of regulation • Regulatory preferences

• Time, cost, resources


Systems’ compliance in 10 steps (1)

• Step 1 – who is in charge?• Strong management• Multi-disciplinary team

• Step 2 – incident response• Behavioural considerations• Dealing with an emergency situation• Detecting, containing and recovering data

• Step 3 – the lens of litigation• Considering what transparency really means• Understanding the privileged environment



• Step 4 – immediate technology• Encryption – what is the state of readiness for an

examination of your systems’ encryption?

• Step 5 – the security policy• A documented system that is legally compliant• Legal references

• Step 6 - Culture change• Corporate governance• Ethics• Regulatory investigation• Financial loss• Brand and reputation



• Step 7 – people issues• Trusting people and minimising risk

• Step 8 – doing business with contractors• Effect on control• Engagement due diligence and contracting

• Step 9 – New projects• How the business goes about business• Building a risk assessment and mitigation process

• Step 10 – Ongoing review of systems• Making sustainable progress after the quick wins


Thank you!

Questions?

[email protected]


Antonis Patrikios

Senior Associate

Field Fisher Waterhouse


12.30 -13.30 Lunch


News Update


Tim Waterhouse

Employment Taxes,

Senior Manager Deloitte LLP

https://www.deloitteresources.com/Home.aspx?wid=1


Employment Status• PAYE/NIC must be operated by an NGB on earnings of employees and office holders

• Case law requires an assessment of the facts against certain tests:– Mutuality, substitution and personal service– The type of work and level of control exercised over the work they do– The financial risk/opportunity to profit– Are they in business on their own account?

• Can apply to all types of work: coaching/performance, medical/physiotherapy, management and administration

• If you get it wrong, HMRC will seek to recover PAYE/NIC plus interest and penalties from you but……

• Demibourne

• What about those operating via personal service companies?


Home workers and Travel Expenses

• Do employees work from home and receive expenses for costs incurred and/or costs for travel to and from home to the NGB offices/ sports locations?

• There are complicated rules on whether an employer can make these payments to employees without a tax/NIC charge arising

• Consider the following to help you decide:– Where is each employee’s ‘permanent workplace’?– The 40% rule– Do they work at home through personal choice or job requirement?– Do they travel extensively in a particular geographical area as part of their role?

• Settling the tax/NIC cost on the employee’s behalf can be costly


Athlete’s Tax Status• Not a matter of choice whether an athlete is considered to be amateur or professional

for tax purposes

• Approach to generating income from their sport is a key factor in determining status

• Some of the issues to consider (Yes = more likely to be professional): – Does the athlete receive any kind of attendance or performance fees/reward?– Does the athlete receive any sponsorship or endorsement fees?– Does the athlete receive any income from associated activities such as journalism/

TV appearances?– Does the athlete work full time in relation to their sport (i.e. they have no other

separate occupation)

• If an athlete becomes a professional the Athlete Performance Award becomes taxable

• London 2012 may present opportunities for more athletes to profit from raised profile and attain professional status. It is important they are aware of the implications


Questions?


Andrew Hanson

Head of Policy

CCPR



The Panel

John Inverdale – Chair

Derrick Andersen – Chief Executive, Lambeth Council

Adrian Christy – Chief Executive, Badminton England

Cath Flitcroft – British Mountaineering Council

Steve Philpott – Chief Executive, DC Leisure

Sarah Winckless – World Champion and Olympian


The Process

263 online survey responses

55 formal written submissions

11 expert witnesses

7 sites visited

Analysis, discussion: report and recommendations


Recommendation 1

Local authorities must not be afraid to rationalise facilities where they are no longer fit for purpose or located in the wrong place.


Recommendation 2

Schools must be obliged to open the premises for out of hours sporting usage.


Recommendation 3

Greater research is required to understand the current location, condition and usage of facilities.


Recommendation 4

All new facilities, whether on school or community sites must include social space for players, spectators and others.


Recommendation 5

Voluntary and community groups must be more fully involved in facility provision


Recommendation 6

Freely available outdoor space must appear more accessible.


Recommendation 7

Access to and maintenance of waterways must be improved.



Dominic Goggins

Fiscal and Regulatory Officer

CCPR

Finance & Governance Forum May 2010

Great Sporting Drama


Listed Events/Crown JewelsGROUP A The Olympic Games The FIFA World Cup Finals Tournament The FA Cup Final The Scottish FA Cup Final (in Scotland) The Grand National The Derby The Wimbledon Tennis Finals The European Football Championship Finals Tournament The Rugby League Challenge Cup Final The Rugby Union World Cup Final

GROUP B Cricket Test Matches played in England Non-Finals play in the Wimbledon Tournament All Other Matches in the Rugby Union World Cup Finals Tournament Six Nations Rugby Tournament Matches Involving Home Countries The Commonwealth Games The World Athletics Championship The Cricket World Cup – the Final, Semi-finals and Matches Involving Home Nations’ Teams The Ryder Cup The British Open Golf Championship


David Davies Review• Remove B List

• Widen the List

– The Summer Olympic Games– FIFA World Cup Finals – UEFA European Football Championship Finals– The Grand National – The FA Cup Final in England, Wales and Northern Ireland– The Scottish FA Cup in Scotland– FIFA World Cup and UEFA European Football Championship Qualifiers– Wimbledon Lawn Tennis Championship– The Open Golf Championship– Home Ashes Test series– The Rugby Union World Cup – Wales Six Nations Rugby matches (Wales only)


Concern for Sport

• Threat to NGB Income

• Timing

• No Independent Economic Impact Assessment

• Politicisation


CCPR Response• Voluntary Code

– Governing bodies are best places to strike the balance between audience and revenue that is most appropriate for their sports

– Minimum 5% reinvestment

– FA, ECB, RFL, LTA/AELTC, UK Athletics, PGA European Tour, Premier League, R&A


Current Situation

• Government unable to rush through before the General Election

– Conservatives: Economic Impact Assessment Required – Liberal Democrats: Relist the Ashes

• CCPR and Signatories – Voluntary Code Principles

• Sport at all levels will be better off


Dominic Goggins

Fiscal and Regulatory Officer

CCPR


Legal Panel


Janice Shardlow

Head of Governance and Legal

British Equestrian Federation

UK ANTI-DOPINGAn Update

© UKAD 2010. All rights reserved.

86

• A new organisation

• Completely separate from UK Sport

• A clear remit to take a lead role in the fight against doping in sport

87

STRUCTURE : EXECUTIVE

Chief Executive

Operations Legal Business Support

Education & Communicatio

ns

88

Board(7 Members)

Audit Committee Remuneration Committee Athlete Committee

STRUCTURE: BOARD / COMMITTEES

89

“to protect the right of athletes to

compete in doping-free sport”

THE MISSION

90

91

THE TOOLS

• Education

• Testing

• Intelligence

• Compliance

• International Influence

92

EDUCATION

100% me

• NGB Education Strategies

• Outreach

• Athlete support - whereabouts

• Social research

93

TESTING

• In- and out-of-competition

• DCOs

94

From 2 June: Hotline

INTELLIGENCE

95

COMPLIANCE

• Results Management

• Case to Answer –Independent Review

• Prosecution

• National Anti-Doping Panel

96

• A level playing field

• NADO Assistance

• On-going consultations

INTERNATIONAL INFLUENCE


Serena Hedley-Dent

Partner, Farrer & Co


Integrity Issues in Sport

• High Profile Instances of Cheating (eg “bloodgate”; “crashgate”)

• Strike at the heart of the integrity of the match/ competition

• How did the relevant sports governing bodies respond? • What general lessons can NGBs learn from these instances?


Integrity Issues in Sport

• Be prepared! • Regulatory Infrastructure and Enforcement

• Have clear rules against general misconduct (as well as breach of sporting rules)

• Be clear which organisation in the sport’s regulatory structure must take action

• Respond quickly

• Media Strategy


Serena Hedley-Dent

Partner, Farrer & Co


Lisa O’Keefe

Director Of Sport

Sport England


Insert text here World Leading Community Sport System


Insert text here

Good Governance

“Any NGB which takes public subscriptions, receives public funds or organises and provides competitions, or teaches aspiring sports men/women will be able to certify that it complies with minimum standards of good governance”

Dutton Report, December 2009


Recognition Process

• More streamlined• Greater Clarity• Access to resources


Measurement & Understanding

• Delivery of Outcomes• Spend Consistent with Award

• Good Stewardship of Awards


• Recognise NGBs as experts in their sport

• Hold our partners accountable for delivery of outcomes

• No compromise on good governance

Our Approach


Lisa O’Keefe

Director Of Sport

Sport England


15.00-15.15 Break


Lloyd Conaway

Director

team BEDS&LUTON


County Sports Partnerships – Supporting the National Governing Bodies.....

Delivery and Doing Stuff


County Sports Partnerships.• A powerful national network demonstrating

leadership and connectivity in sport and physical activity

• X49 – Many Good People.

• A focus on Grow and Sustain

• County Sports Partnership Network (CSPN)

• £10m per year from Sport England

• “Hunter Gatherers”


CSPs – The Core Offer

• Connecting NGBs to the CSP area• Club, Coach and Volunteer Development• Children and Young People• Facilities• Investment• Strategic Influencing and Networking• Knowledge Management• Operations (Governance)


GROW – Get Back Into

• Get Back Into• www.getbackinto.co.uk• Adult participation scheme....... PLUS• x3 Schemes per year (September, January & April)• Beds & Luton = x50 courses, x400 sessions, x600

participants, x3000 throughput, per scheme. • East Region• x30 NGBs• Clubs, Coaches & Volunteers• Rural Theme £177K• Potential national Roll-out.

http://www.getbackinto.co.uk/



SUSTAIN - Coaching

• Coach Development Manager• Coach Development Days• Coaching System Support Network• Cedars Coaching Academy (X420 Coaches

Qualified October 2009 half term) • Coach Agency• Coach registration and data management

scheme


SUSTAIN – Coaching continued

• ESF – 125 Bursaries for Coaching, 33 for officiating, 5 for tutoring.

• Young Coaches Conference• Communications • Recruit Into Coaching (x3 NGBs)• Girls Active Hub • Generic Coach Education programme

(safeguarding, equity & first aid)


SUSTAIN – Workforce Development

• 2007/10 team BEDS&LUTON Workforce Development Plan

• £800K scheme• £450K partnership and “in kind” support• £350K Community Investment Fund (CIF) -

East Region• KPIs delivered;

Coaches 371 Regular Coaching 89

Sports Q’s 3051 Volunteers 733

Regular Volunteering 182 Non-Sport Specific Q’s1288


Local Area Agreement

• NI8 in all 3 Unitary Authorities• £100k Pump Prime funding (Government

Office)• Leveraged a £270K project (Supported by

CIF)• Significant added funds into sport• Funded participation, clubs, coaches and

volunteers• b-live.com – Young Person

Communication initiative.


There’s more.....

• Building Schools for the Future (BSF) – Facilities

• N-Ergy ; 16-19 retention programme• Sport Unlimited • Health – Department of Health and local PCT

funding (£160K to date)

• County Sports Partnership Network (CSPN) – NGB Group


even more.....

• County Networking Days (X3) • Club Development Forums (X4) = 94 Clubs• Volunteers X3 London 2012 inspired

development events.• Education and Training Programme• Funding Advice• Regional NGB Forum


“NGBs get a great deal from team BEDS&LUTON”


Many Thanks

Lloyd Conaway


Thank you

John Crowther, Chair


Cricket & Bar

Documents

Finance & Governance Forum 2009 Finance & Governance Forum The Oval 19 th May 2010