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IOC raise concerns over AIBA sponsorship deal with Gazprom

International Olympic Committee (IOC) has raised concerns over the sponsorship deal between the International Boxing Association (AIBA) and Russian state-owned company Gazprom, warning it fails to fully address its issues with the organisation’s finances.

In an interim report on AIBA, IOC chief ethics and compliance officer Pâquerette Girard Zappelli questioned the nature of the contract with Gazprom and claimed the embattled Federation is in danger of being overly dependent on the company for its revenue.

AIBA’s financial situation was a key factor in the IOC’s decision to suspend it as the Olympic governing body for boxing in June 2019 and in leaving the sport off the initial programme for the 2028 Games in Los Angeles.

The exact terms of the deal between AIBA and the multinational energy corporation, which AIBA claims has helped ease its financial crisis, have not been disclosed.

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A report from the EY auditing firm said the agreement would run from April this year to December 2021, “and that AIBA had received 100 per cent of the contractually stipulated amount of funds in the first half of 2021 as a prepayment”.

EY said the conditions of the Gazprom contract enabled AIBA to “fully cover” its expenditure for the year to June 30, and to cover budgeted expenditures for the year June 30 2022.

After that period, however, AIBA’s revenues – in addition to the remaining six months of revenues from the Gazprom agreement – will be “dependent on future licensing, sponsorship and event revenues that have yet to be contracted”.

“Due to the non-disclosure of the content of the contract with Gazprom, in particular the global amount paid by Gazprom and AIBA’s performance obligations from the contract, it is not clear what the real nature of this contract could be,” Zappelli wrote.

“This also raises questions about how this contract was negotiated and approved by AIBA.

“Already in 2019, AIBA’s financial dependence on consecutive single sources of revenue from external investors was highlighted and defined as one of the causes of its indebtedness.

“The importance of the Gazprom contract, in proportion to the other revenues, may raise the risk of falling into a similar scheme.”

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