The National Post recently reported on the finances of the 2010 Winter Olympics.
1. RISING COSTS
“(The 2010 Winter Olympics) operating budget, now $1.76-billion, is up 7% from 2007, and has increased significantly from the original $1.3-billion six years ago, when Vancouver made its winning Games bid.”
2. TAXPAYERS TO PICK UP MILLIONS IN COSTS
“The $1.76-billion budget doesn’t include security costs. Originally estimated at $175-million, the security bill is now expected to top $900-million. About half will be spent on services provided by the RCMP. Taxpayers will pick up the entire security tab.”
“VANOC’s budget doesn’t include spending on infrastructure projects, such as new highways and transit initiatives, and an $883-million …Vancouver convention centre, built to coincide with the Games and to meet visitor and media requirements.”
“Vancouver ratepayers expect to be saddled with debt associated with an athletes’ village downtown; completion of its interminable and allegedly shoddy construction is now a municipal responsibility, thanks to a private financing imbroglio triggered by the economic crisis.”
3. SERIOUS GAPS IN REVENUE
“VANOC …remains zero-deficit committed (though) some budget targets seem ill-defined. For example, almost 14% of VANOC’s total operating revenue is to come from nebulous ‘Other’ sources. …VANOC has still not indicated the source of half its anticipated $237-million ‘Other’ income.”
“Unsold international sponsorships account for a $30-million hole in the Games balance sheet. …The shortfall (for ‘out of home’ billboard spots in communities surrounding metro Vancouver) is $12-million. Premium ticket sales are (also) languishing. …VANOC has sold only a third of its original target figure.”
4. CONTINGENCY FUNDS TO BE DEPLETED
“(It is expected) that VANOC will suck dry another $27-million revenue contingency fund before the Games have ended next February. The money will likely be spent to cover shortfalls in advertising revenue. A $100-million contingency fund for Games venues has already been depleted; there’s just $310,000 left in that kitty.”
5. CORPORATE RETURNS TO BE ADJUSTED DOWNWARD
(Early on) corporations bought in (to the 2010 Winter Olympics), in a big way.”
– “Bell committed a staggering $200-million to the Vancouver’s 2010 Games, plus sponsorship rights to Turin in 2006, Beijing in 2008, and London in 2012.”
– “Bell also teamed with Rogers Communications Inc. (paying $153-million) to acquire broadcast rights to both the 2010 Winter Games and to the 2012 Summer Games.”
– “A $110-million pledge from RBC Financial Group…”
– “$62.5-million from Petro-Canada…”
– “$53-million from General Motors of Canada…”
– “$100-million worth of goods and services from Hudson’s Bay Co.”
– “cash and services worth $68-million from home improvement chain Rona Inc.”
“Then came the global economic meltdown. …Some analysts say expected returns to the company – advertising dollars especially – will have to be adjusted downward, perhaps severely.”
The full article can be read at http://www.nationalpost.com/m/story.html?id=1802520&s=Home&p=2.
In the coming days we will be posting a Council of Canadians statement on the 2010 Winter Olympics to our website.
More campaign blog posts on the Olympics can be read at http://canadians.org/campaignblog/?cat=4.