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London 2012, Vancouver 2010 share similar financial woes

by mike_yvr | November 19, 2008 at 07:17 am

693 views | 35 Recommendations | 7 comments

Concerns over the increasing cost of hosting the 2010 games in Vancouver include unknown security costs, a grossly overbudget convention/media centre and a $100 million bailout for the developer of athletes' housing.

Those concerns are being shared across-the-pond in London where 2010 summer games organizers are watching as plans for a privately financed media centre and atheletes village are at risk from the current financial crisis. That, combined with -- you guessed it -- rising security costs, could wipe out the billion pound contingency fund and blow the London Olympics budget of 9.3 billion pounds.

Misery loves company...

Next week the Olympic circus pitches camp in the capital for a four-day conference attended by International Olympic Committee president Jacques Rogge and 400 other delegates gathered to distil the lessons of the Beijing Games for future host cities. For London the most significant event comes last, a one-day review by senior IOC executives of the city's progress. It promises to be a chastening affair, with cold economic realities dominating the agenda.

Politically and practically, the ground has shifted since the IOC inspectors were last in town in June, a visit that concluded with Denis Oswald, chairman of the co-ordination commission, cheerily awarding the capital "9.75 out of 10".

In the interim, London has been hit hard by the banking crisis. The deep-freeze afflicting the financial markets has been disastrous for London's plans for a privately financed Olympic village and media centre. It now seems likely that most of the £1 billion emergency contingency will be required to bail out the projects. The contingency had been ear-marked to cover increases in security costs and should it be wiped out to cover construction, Tessa Jowell's promise that the £9.3 billion budget will not be exceeded could be in danger.

Update: Corporate sponsors facing tough times are bailing on the International Olympic Committee's Olympic Sponsorship Program.

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Paschen

at 07:40 on November 19th, 2008

Most Olympics in the past two decades have been financial disasters in a way and yet they broth much prestige and secondary business to those cities.

dowdinsk

at 07:54 on November 19th, 2008

One of London's Olympic boroughs, Hackney has just removed from its website previously promised Legacy commitments. I'm told the London Evening Standard will be covering this breaking story in tomorrow's edition.

Amy Judd

at 08:58 on November 19th, 2008

I thought London was doing a better job of budgeting their Olympics.

dowdinsk

at 05:51 on November 20th, 2008

@ amyjudd: I thought London was doing a better job of budgeting their Olympics.

Did you really? Grabbing a few examples from the GamesMonitor newsgroup, how about:

Glascow 2014 legacy diverted to London 2012

Fears over legacy in the 'forgotten Olympic borough'

Shifting the goalposts some more?

Athletes' Village bailout

frankieteardrop

at 15:11 on November 19th, 2008

I voted against hosting the Vancouver olympics in the sham referendum held here years back. If they had recorded votes maybe we could have been exempted from the colossal debt that will inevitably result.

car1edb

at 16:26 on November 19th, 2008

typo?: "...pond in London where 2010 summer games organizers.." ;)

Isn't it standard for the Olympics go way over budget now-a-days?

dowdinsk

at 04:39 on November 21st, 2008

(typo?: "...pond in London where 2010 summer games... should read 2012 summer games of course)

and yes its pretty much standard and well documented that all these sorts of events go over budget, but here we see too that the funders are dropping away as well.

Johnson & Johnson axes Olympic sponsorship
by Nikki Sandison, Brand Republic 18-Nov-08, 13:55

LONDON - Johnson & Johnson is dropping out of its global sponsorship deal with the International Olympic Committee, worth up to $100m (£67m) over four years, leaving the 2010 Vancouver Winter Olympics and London 2012 without important funding.

It is understood that the healthcare giant is not renewing its TOP (The Olympic Partnership) sponsorship for 2009 to 2012 because it was disappointed with the lack of people admitted to the sponsor's area in Beijing due to security restrictions.

Johnson & Johnson's sponsorship deal for 2005 to 2008 was worth between $60m and $80m and it is understood that the renewal would have brought the IOC another $100m over four years.

A spokeswoman for J&J said that it was not renewing its sponsorship to enable the company to focus on other business priorities.

J&J's decision leaves the IOC without a partner in the healthcare products category and follows the departure of Kodak, ManuLife and Lenovo from the list of Olympic sponsors.

The IOC has replaced Lenovo with Acer but it returned ManuLife's insurance category rights back to the 200 national organising committees and added Kodak's digital camera category rights to Panasonic's sponsorship.