Balanced budget still seen for 2010 Games 27/10/2009 |
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Organizers of next year's Vancouver Olympics are confident of meeting their balanced budget goal, saying the economic downturn has had a milder impact than initially feared, officials said on Monday.
Sales of high-end ticket packages and billboard advertising in the host city have picked up, and the Vancouver Organizing Committee is hopeful of signing another corporate sponsorship deal before the Winter Games begin in February.
VANOC, which released its annual report on Monday, is no longer facing the operational cuts organizers had worried might be needed as the recession threatened revenues for both it and the International Olympic Committee.
"We think we are through by far the worst of the economic lump, and (every sponsor) is current with its payments," VANOC executive vice president Dave Cobb said.
The IOC agreed in August to help VANOC fill a revenue gap caused by the failure of the international group to sign up all the worldwide corporate sponsors expected when Vancouver's C$1.7 billion operating budget was prepared.
The operating budget does not include government-funded venue construction, and public money used for the C$900 million security budget and in events such as the Olympic torch run, which arrives in Canada on Friday.
The Vancouver organization currently has a budget surplus of just under C$200 million, which should give it the needed contingency for unexpected expenses during the 17 days of Games and the Paralympics that follow in March.
The improved financial breathing room means neither spectators or athletes should notice any significant changes caused by the need to cut costs, Cobb told reporters.
The threatened shortfall prompted VANOC this summer to ask private companies to lend it workers to reduce hiring for the Games, a request organizers hailed as a success. They estimate it will save the budget about C$9 million.
Cobb said lagging outdoor advertising sales and luxury suite sales began to improve in early September, a change he attributes to increased economic confidence and a realization by potential advertisers that the Games are fast approaching.
A major financial question still hanging over the Games is the amount of money VANOC will have pay Intrawest Corp's Whistler Ski Resort to compensate for business it will lose because of hosting alpine skiing and other events in the Games.
VANOC officials are confident about their estimates on the size of the payment but declined to speculate what would happen if the resort's request is more than its post-Game contingency.
"We'll cross that bridge when we get to it," said Chief Financial Officer John McLaughlin.
Intrawest is owned by U.S. hedge fund group Fortress Investment.
(Source: Reuters)
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