Financial update
This financial update was originally written in June 2020. We added the BLUE SECTIONS in August 2020.
We would like to provide members with an update on UK Ultimate’s financial position and the potential implications of the current situation.
UKU is financially secure for the time being because we were able to avoid losing much money on the cancelled events, and because we have been able to claim support from the Coronavirus Job Retention Scheme. Longer term the situation depends entirely on how and when we can all start playing Ultimate again.
Whilst clubs will be able to return to some training before the end of August, and hopefully some (outdoor) matches between local teams before the end of the year, we face a difficult financial challenge. We do not expect any events to take place during what is left of 2020, and we are currently forecasting a loss of approx £30k for the year, subject to this fundraising campaign. We are tremendously grateful if you can help us reach our goal of putting UKU finances back to where they were at the start of 2020.
The rest of this post outlines the situation in a little more detail, starting with some background information about how UK Ultimate is funded. You can also see more of this information in the AGM minutes, recordings and annual accounts on our website.
Almost all UKU income comes from membership, event entry fees and coach education. UKU does not receive any external grant funding.
The surplus from events funds the staff time spent on planning and delivery of events, but also contributes significantly towards other staffing & administrative costs.
Participation in events is also the main driver of UKU membership. So without any events, UKU membership renewals are also affected.
All GB-related costs are covered by the GB players, including a contribution towards some of the staff admin time spent supporting those teams. Each GB cycle is designed to break even. However, UKU often pays tournament fees and hotel costs well in advance of collecting the money from the players, which does create a risk that the organisation can lose money if some of the players do not, or are unable, to pay their share of the cost.
This chart shows a simple breakdown of income in 2019. The turnover in 2019 was higher than usual at £671k, due to a particularly busy GB year, and an increase in event income.
We manage UKU finances relatively cautiously and have built up reasonable reserves over the last 10 years, in order that we would have a safety net in case of unexpected problems. We had a really positive year in 2016 as a result of a tremendously successful WFDF World Ultimate & Guts Championships. Since 2016, we have invested a significant portion of those reserves in developing ultimate in schools, although we also had some losses in 2017-18 that resulted from a kind of “WU23-WUGC hangover”. Nonetheless we started the year in a good position with reserves over £120k.
In March, all of our event-related income (i.e. entry fees and membership) stopped until further notice (open this section for more details).
By chance, we had completed the indoor season, but to date we have cancelled all of our outdoor events from March to the end of September, and we think it unlikely that any events will take place before the end of the year. Thanks to our partners, we have had minimal losses in terms of commitments that still had to paid so far. But, although we have not had to pay out significant sums against those events, we have lost the surplus from those events that we use to support the organisation's work. Moreover, since many players only update their annual membership when they attend their first event of the season, there has been a consequential drop in membership income as well.
In an announcement on 30th March, we outlined the details of our situation re staff. The following members of staff were all furloughed as of 1st April:
Chesca Tyler Weddell (Coach Education Coordinator)
Chris Bamford (UKU Administrator)
Meg Price (Events Coordinator)
Ruth Flight (GB Junior Programme Manager, part-time)
Simon Hill (CEO) and Laura Atkins (bookkeeper, part-time) continue to work, but their hours have been reduced.
Under this scheme furloughed staff are not permitted to work for their employer, so please be aware that during this time there is just one member of staff dealing with all ongoing work, and any incoming contact or queries.
These arrangements have been extended to the end of June. Our team understands that it may be necessary to continue to apply for support from the Job Retention Scheme throughout July-October, although we will probably make use of the flexibility to do some part-time work during that period. None of our staff want to be furloughed, and I would like to take this opportunity to thank them all again for their support and pragmatism.
As expected, those arrangements continue until the end of October, except to note the very happy news that Chesca is now on maternity leave. Congratulations Chesca and family!
Impact on GB players
Before talking about the impact on the organisation, we want to highlight that some GB players, but in particular the senior squads heading to WUGC, are personally affected. It’s too complicated to spell out in detail here, and some aspects of the situation are still to be resolved, but it is always expensive to play in a GB Ultimate team, and we don’t want this problem to be lost amongst all the noise. We are also managing a potential loss from WJUC, but are optimistic there will be a positive outcome in the end.
Estimating the impact on UK Ultimate
Returning to the wider question of UKU finance, the big unknown of course is the timeline for returning to normal play. This affects all players, clubs and schools, but the university season is the dominant programme at that time of year. If universities are operating reasonably normally this autumn then the steps we have taken so far will have been enough to protect the organisation. We estimate the end of year loss will be approx £20k, and we should be getting back to normal throughout 2021.
However, we need to consider the possibility that universities do not or cannot operate normally this autumn - at least with regards to team sports clubs recruiting new players, training and competing. Moreover, the key events for us in that period are all indoor. It is not hard to imagine that indoor ultimate events will simply not be permitted in this time frame. This would also impact junior and club indoor competitions, both of which have also been growing in the last couple of years. In those circumstances, we expect to lose at approx £45k in 2020, with additional losses in 2021 as well. Our 2020 forecast for this scenario has improved, but the main point still stands.
This article is just about money, but of course the impact of losing lots of players has the potential to create all sorts of problems across different parts of our community. Please watch out for more news and updates over the coming weeks, and please take a look at How Can I Help?
In the meantime:
UK Ultimate entered 2020 in a good financial position and will survive the crisis. Nonetheless, the organisation is losing money.
If Ultimate returns to normal during Aug-Oct then actually the impact will be limited to some manageable financial losses in 2020, and a missed season of play. We are hoping for this scenario.
If Ultimate is not back to normal in the autumn, then UK Ultimate is going to take a bigger financial hit in 2020 and 2021. Moreover we should all then be assuming that the sport will be losing players. We are planning for this scenario.
Forecasting 2021-22
At this point, it's almost impossible to provide a sensible forecast for 2021 and 2022 because there are so many unknowns that are outside our control. We built up UK Ultimate using profits from events, because (a) it was something we could directly control (we thought) and (b) because it linked our income to the point at which people are actually playing (which membership doesn't do in such a direct way). We cannot rely on that model now. Here are our financial priorities for 2020/21:
Do more to develop the income we receive from membership and donations.
Apply for more grant support to help us transition to a new financial model that is less reliant on weekend events.
Secure WUCC'22, and make sure that the event supports UKU for the longer-term.
Keep costs to a minimum.