Originally created 02/17/99

IOC official suggests ditching profit-sharing deal

LONDON -- With sponsors skittish over the Olympic bribery scandal, organizers of the Sydney Games were urged by an IOC executive Tuesday to plow a $66 million profit-sharing deal back into the budget.

"You would solve the financing issue in a stroke of a pen," International Olympic Committee marketing director Michael Payne said.

Raising money from corporate sponsors for the 2000 Sydney Games has become a major concern in the wake of the Olympic corruption scandals.

With Sydney about $130 million short of its target for sponsorship revenues, Payne said the controversial profit deal should be reviewed.

"There is no way the games should be compromised because of a profit deal that we were opposed to," he told The Associated Press in a telephone interview from IOC headquarters in Lausanne, Switzerland. "This money should be put back into the games."

Payne said the IOC warned the Australians three years ago against projecting a surplus for the games. Sydney organizers have predicted a $17.7 million surplus.

"The IOC was saying, `This is crazy to be talking about a profit now. You should wait until the day after the closing ceremony,"' Payne said. "For various reasons, they wanted to lock down issues on profit two or three years ago. Maybe that should be reopened."

Under terms of the IOC's contract with Olympic cities, 90 percent of any surplus goes to the host country and 10 percent to the IOC. Of the 90 percent set aside for the host country, 10 percent goes to the national Olympic committee.

The profit-sharing arrangement for Sydney has gone through several changes.

In a deal with the New South Wales government, the Australian Olympic Committee agreed to give up its veto power over key decisions in exchange for a guaranteed $66 million.

Later, the NSW government effectively bought out the AOC's right to the money, and the funds go to the AOC whether there is a surplus or not.

"That money has now been taken off the balance books," Payne said. "In hindsight, it might have been premature to talk about profit."

The IOC's share of the profit deal was eventually capped at $8.95 million. The IOC has said it would earmark most of its share to a special fund for sports programs in Australia and the rest of Oceania.

Payne said IOC president Juan Antonio Samaranch has made clear the international committee is ready to help out if the organizing committee and government request it, including reconsidering the IOC's profit share.

"It would seem the first place to start is to look at the whole profit deal, which we thought was a bad idea in the first place," Payne said. "We would never do a deal of this nature again. Never in a million years."

Even before the corruption scandals involving Olympic bid cities, Sydney was struggling to meet its $1.65 billion budget, falling short of its $542 million sponsorship target and leading to fears that budget cutbacks that could affect the games.

In Sydney, Olympics Minister Michael Knight suggested for the first time Tuesday that the Olympics could get by without the extra sponsorship revenue.

"You can run a pretty fantastic Olympic Games on $2.4 billion (Australian, or $1.52 million)," he said.

Payne said Sydney organizers erred by setting their latest sponsorship revenues too high.

"SOCOG has twice met their targets, and got the most successful marketing program we've ever seen for the games," he said. "If it's a problem, it's because they were too successful early on. They allowed the targets to continue to be raised.

"I think the current target is wrong. It never should have been raised to this height. It's like a high jumper. You can keep raising the height, but eventually he can no longer make it over the bar."

Jacques Rogge, who heads the IOC coordination commission for the Sydney Games, said he is optimistic that Sydney will raise enough money.

"Yes, there is still some revenue to be found, but it's too soon to be worried," he said in a phone interview from Belgium. "I'm very relaxed about it.

"We are vigilant. But today no one can say there is a danger, a shortfall, a problem. We'll have a better idea in June after ticket sales have started and new efforts have begun to find new sources of revenue."


Trending this week:


© 2018. All Rights Reserved.    | Contact Us