SBD/Issue 234/Olympics

Economic Downturn Contributes To Budget Shortfall For VANOC

Key components in the plans for the '10 Vancouver Olympics are "slowly coming undone because of a worldwide recession seen as the worst economic slump since the Second World War," according to Stephanie Levitz of the CP. At a time when the focus "should be on the final few details, a multi-million dollar budget shortfall is fraying the close ties that bind" VANOC and IOC officials. The IOC Coordination Commission "makes its final trip to Vancouver this week and will review transportation, accommodation, venue arrangements and plans for the opening and closing ceremonies, among other things." But plans in "some of those areas can't be finalized because of an issue that's become a key point of contention between the IOC and Vancouver organizers" -- $30M (all figures Canadian) "worth of sponsorship money." VANOC "has repeatedly claimed it's owed a further [$30M] from the IOC's take from major international sponsors," but the IOC disagrees.

IOC Could Give VANOC Greater Share
Of Broadcast Revenues To Help Bridge Gap
SPONSOR SHORTFALL: VANOC officials developed their '09 budget "on the assumption the IOC would be able to sign 11 international sponsors and give them" $196M toward their $1.75B bottom line, but the IOC has signed only nine TOP sponsors, the "lowest number since the worldwide program was started." VANOC VP/Communications Renee Smith-Valade: "We were making budget forecasts that were based on a buoyant economy, on ongoing discussions with the IOC, on the performance in Beijing as it related to sponsors. We prepared our updated budget and then of course everything changed, the economy took a dive and everyone had to reanalyze and reassess every assumption." IOC member and VANOC BOD member Dick Pound: "The key is not whether $30[M] comes from two phantom (worldwide) sponsorships, but how you fill that hole. There are lots of ways the IOC could do that." Levitz noted options "could include the IOC giving VANOC a greater share of broadcast revenues for the Games or handing over more of their commission on sponsorship," and there are "other ways as well." Hockey Canada's jerseys for the '10 Games feature a "sleeve patch with the Vancouver Games logo," which will "boost the revenues VANOC makes from merchandise sales." Meanwhile, IOC Coordination Committee Chair Rene Fasel said that he "still believes VANOC will be able to deliver the services required to put on the Games." Fasel: "There hasn't been any change in my expectation for these Games because I remain confident that Vancouver will put on top notch Olympic Winter Games" (CP, 8/23).

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