IOC To Bail Out Vancouver 2010
In an unprecedented move, the International Olympic Committee has agreed to bail out the organisers of next year’s Winter Olympics in Vancouver if they incur a deficit caused by the recession’s impact on corporate sponsorship.
The deal follows a meeting in Vancouver this week at which the Vancouver Organising Committee (VANOC) told the IOC it expected a shortfall of at least £24m in its £1bn operating budget.
VANOC said it had met its target for domestic sponsorship but only nine out of 11 budgeted global sponsors had signed up. The two unfilled categories – insurance and health products – had been expected to bring in revenues of about £17m.
VANOC has also been unable to sell more than £6.75m in billboard advertising and corporate VIP packages.
The IOC and VANOC said it was too early to determine the scale of the IOC contribution. However Dave Cobb, VANOC’s head of marketing, said: ‘They have given us their assurance that when we get to the end, if we do have a shortfall, they’re prepared to financially help us.’
An IOC spokesman in Vancouver added: ‘There is absolutely no blank cheque. We are not underwriting any deficit. We still confidently expect VANOC to increase local sponsorship and there’s still a good possibility of another global sponsor. But we have given VANOC undertakings that give them the confidence to carry on and organise the games.’
Preparations for the Games, to be split between Vancouver and the Whistler ski resort, have generally gone smoothly.
However Vancouver’s credit rating was threatened this year when it had to borrow up to £258m for the athletes’ village, after a New York hedge fund that was the project’s main financier stopped payment on the construction loan. The project was highly leveraged in the hope the units would be sold as homes.
