In advance of a closed-door budget meeting scheduled for tomorrow, Vanoc is announcing a hiring freeze, cuts to its travel budget, and an increased number of seats available for the Games opening and closing ceremonies—all to beef up the size of its $100-million contingency fund, used to make up for budgetary shortfalls. Vanoc chief John Furlong said on the weekend that the market crash is forcing everybody back to the table.
Corporate sponsors contribute roughly 61 per cent of the Games $1.6-billion operating budget, and the future, for some key Games sponsors, is looking grim:
- GM, which, last week, went to the federal government seeking a $2.4 billion loan and $800 million in cash immediately, has committed $67 million to the Games, including the supply of 4,500 vehicles.
- Teck Cominco, contracted to provide the metal for the 2010 medals and $15-million in cash, is selling off assets and slashing capital spending in a bid to cut expenses as it struggles with debt.
- And Nortel, which is the communications supplier for the Games along with Bell Canada, lost $3.4 billion in the third quarter of 2008; its stock is down 95 per cent this year.
The biggest financial crunch for the Vancouver 2010, however, is out of Vanoc’s hands: the $1-billion Olympic athletes village — 16 buildings to house 2,800 people — is half-finished and in financial trouble. But the City of Vancouver — not Vanoc — has guaranteed the project. And the grim news pales in comparison to London. With three and a half years to go, LOCOG, the London 2012 organizing committee, has already cancelled venues, slashed funding for British athletes and dramatically scaled back its $17-billion operating budget.