Government moves goalposts on sports financing

Serious problems at the country’s biggest lottery and betting firm, Sazka, have highlighted the issue of how to finance Czech sports. The government no longer trusts the Czech Sports Association, which is Sazka’s biggest stockholder, with distributing funds among individual sports federations, and on Thursday, officials unveiled a new financing plan that that cuts out that middle men.

Josef Dobeš, Miroslav Kalousek (right), photo: CTK

More than 70 sports, from ping pong to football, are affiliated with the Czech Sports Association, an umbrella organization in charge of channelling more than two billion crowns of state funds into individual sports federations. It also has a nearly 68 percent stake in Sazka, the troubled lottery company whose dwindling proceeds are also distributed through the Czech Sports Association.

The government has blamed Sazka’s major shareholder for failing to control the lottery firm, as well as inefficient use of state finance. Finance Minister Miroslav Kalousek accused the association of taking more care of their officials’ pay packets than actual sporting activities.

On Thursday, Mr Kalousek, together with the education minister, Josef Dobeš, met with representatives of the country’s 12 biggest sports associations, and agreed on a new financing formula. From this year on, some 270 million crowns from the Finance Ministry’s budget will be distributed directly to the individual sports federations, taking account of their membership, property portfolio, and their achievements. Finance Minister Miroslav Kalousek said they needed to make sure that the state money is used for what it is meant for.

Photo: Štěpánka Budková

“We have agreed that subsidies from the finance ministry must be distributed in such a way that they will be only used for the support of sport, and nothing else.

“I am glad that the sports associations have agreed with the new plan. Under the new arrangement, the finance ministry will pay these funds directly to the individual associations”.

For the time being, the remaining 1.9 billion crowns from the Education Ministry will still go through the Czech Sports Association since it is handed out in targeted subsidies, with no risk of being misused.

But longer term, the finance ministry is also planning to make amendment to the Czech income tax act. Lottery and betting firms were granted tax exemptions in return for giving up part of their profit for public benefit, including sports. That should change and these firms will be taxed; the revenues should then be distributed through what is described as a “reliable partner.”

Alexandr Kliment is a spokesman for the Czech Olympic Committee, which has been working with the ministry on the new plan.

General director of Sazka Aleš Hušák (left), Czech Sports Association director Pavel Kořan, photo: CTK

“I think we can see the light at the end of the tunnel because the sports environment is getting united. There are hopes and efforts to bring people together. We also hope that politicians, from right to left, understand the importance of sports, and everybody has the same goal now. And I hope that we are going to meet the goals that we have presented in our analyses and proposals.”

The Finance Ministry says it will send the new income tax proposal to Parliament later this year, hoping it will enter into force by 2013.