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Wan LixinOpinion deputy editor of Shanghai Daily
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Vancouver Games scramble to beat wintry economic news
Source: Agencies |
February 7, 2009, Saturday
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Online Edition
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HERE'S another big business that needs a bailout: The Olympics.
With a year to go before the start of the Winter Games in Vancouver, much of the focus is on making ends meet.
The organizing committee has dipped into its contingency fund to the tune of US$40 million to cover rising costs because of the slowing economy. The city just approved a new budget that will allow it to borrow US$350 million or more to take over building of the athletes' village after the original lender stopped payment.
The Vancouver Games, which begin on Feb. 12, 2010, have an operating budget of US$1.63 billion -- a US$104 million increase over the original budget that was developed about two years ago.
Yet those in the Olympic movement say that's still an acceptable amount to pay for the world's biggest sports extravaganza, even in rough financial times.
"There's no shortage of cities willing to put forth the energy and effort and economic considerations to host the Summer or Winter Games," said Jim Scherr, chief executive of the U.S. Olympic Committee, which wants to bring the 2016 Summer Games to Chicago at the cost of US$4.7 billion. "From that perspective, things are robust, the movement is being served."
Still, the sour economy impacts more than just the municipalities trying to put on a good show. It trickles down to individual athletes, especially those who compete in less-popular sports.
Apolo Anton Ohno, winner of five medals over the last two Olympics and hoping to close out his career in Vancouver, said speedskating was doing fine in the lead-up to the games. But because the sport doesn't have a huge membership, or big TV revenues, funding threatens to go downhill quickly after the games.
"The current state of the global recession has taken its toll on funds for post-2010," he said. "That's where it'll be kind of scary to see what's set up. Usually, there's a lot of reserve in the bank. It will be interesting to see how they'll be able to swim through the uphill stream this time."
As almost every athlete knows, a good performance brings with it more than just a gold medal.
On an individual level, there are endorsements, appearances, book deals and more. And shortly after the Winter Games, the International Olympic Committee will delve seriously into negotiations for a TV deal with an American broadcaster to cover the 2016 Games and beyond. TV revenue makes up about 53 percent of the IOC's income, and US TV dollars provide the lion's share of that money.
A good American performance in Canada, on top of the United States' medal-leading effort in Beijing, can only help, as advertisers and the networks settle on the financial stake they want to invest on the Olympic product.
The United States won 25 medals in Turin in 2006, down from the 34 it won in Salt Lake City, but still a success because it nearly doubled the best output for the American team in an Olympics on foreign soil.
Scherr was making no predictions this time out, other than to say that several countries -- including Germany, Norway, 2014 Winter Games host Russia and, of course, Canada -- are matching America step for step in trying to build strong programs.
The new challenge for the organizers of the Vancouver Olympics was how to make them a success without hemorrhaging money.
"We had to stop and start again," John Furlong, the CEO of the Vancouver organizing committee, said of the economy's impact on the games. "We had to rethink everything."
The good news was that sales of tickets and merchandising are brisk -- a preliminary sign, at least, that interest in the Olympics doesn't wane when the going gets tough.
With a year to go before the start of the Winter Games in Vancouver, much of the focus is on making ends meet.
The organizing committee has dipped into its contingency fund to the tune of US$40 million to cover rising costs because of the slowing economy. The city just approved a new budget that will allow it to borrow US$350 million or more to take over building of the athletes' village after the original lender stopped payment.
The Vancouver Games, which begin on Feb. 12, 2010, have an operating budget of US$1.63 billion -- a US$104 million increase over the original budget that was developed about two years ago.
Yet those in the Olympic movement say that's still an acceptable amount to pay for the world's biggest sports extravaganza, even in rough financial times.
"There's no shortage of cities willing to put forth the energy and effort and economic considerations to host the Summer or Winter Games," said Jim Scherr, chief executive of the U.S. Olympic Committee, which wants to bring the 2016 Summer Games to Chicago at the cost of US$4.7 billion. "From that perspective, things are robust, the movement is being served."
Still, the sour economy impacts more than just the municipalities trying to put on a good show. It trickles down to individual athletes, especially those who compete in less-popular sports.
Apolo Anton Ohno, winner of five medals over the last two Olympics and hoping to close out his career in Vancouver, said speedskating was doing fine in the lead-up to the games. But because the sport doesn't have a huge membership, or big TV revenues, funding threatens to go downhill quickly after the games.
"The current state of the global recession has taken its toll on funds for post-2010," he said. "That's where it'll be kind of scary to see what's set up. Usually, there's a lot of reserve in the bank. It will be interesting to see how they'll be able to swim through the uphill stream this time."
As almost every athlete knows, a good performance brings with it more than just a gold medal.
On an individual level, there are endorsements, appearances, book deals and more. And shortly after the Winter Games, the International Olympic Committee will delve seriously into negotiations for a TV deal with an American broadcaster to cover the 2016 Games and beyond. TV revenue makes up about 53 percent of the IOC's income, and US TV dollars provide the lion's share of that money.
A good American performance in Canada, on top of the United States' medal-leading effort in Beijing, can only help, as advertisers and the networks settle on the financial stake they want to invest on the Olympic product.
The United States won 25 medals in Turin in 2006, down from the 34 it won in Salt Lake City, but still a success because it nearly doubled the best output for the American team in an Olympics on foreign soil.
Scherr was making no predictions this time out, other than to say that several countries -- including Germany, Norway, 2014 Winter Games host Russia and, of course, Canada -- are matching America step for step in trying to build strong programs.
The new challenge for the organizers of the Vancouver Olympics was how to make them a success without hemorrhaging money.
"We had to stop and start again," John Furlong, the CEO of the Vancouver organizing committee, said of the economy's impact on the games. "We had to rethink everything."
The good news was that sales of tickets and merchandising are brisk -- a preliminary sign, at least, that interest in the Olympics doesn't wane when the going gets tough.
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