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2010 Games faces cuts but fears raised that they're going too far

23 hours ago

VANCOUVER, B.C. — Vancouver Olympic organizers have been warned by their board of directors not to be overzealous and make budget cuts that would compromise the spirit of the Games.

A revised budget for the 2010 Games was presented to the board of directors Tuesday that included cuts to money being spent on accommodation and the banners and other elements that make up the "look" of the Olympics.

But the budget's gone back to the organizing committee over fear that too much was being chopped away in an effort to deal with the global economic downturn.

"It's the question we asked the management team," said Jack Poole, the chairman of the board of directors.

"To be sure that in the endeavour to cut the fat out of the budget, you don't start cutting muscle and bone. Is there a chance you've gone too far? We don't think so, but is there a chance that you have because that would be a mistake."

The current operational budget for the 2010 Winter Olympics is $1.62 billion, which does not include the $580 million for venues.

The operation of the Games is funded by ticket and merchandise sales, as well as sponsorship.

All three areas are going well for the organizing committee - they've raised $745 million of their $760 million sponsorship budget and requests for tickets have already topped $345 million.

Sponsors have made every payment, even those companies facing financial trouble like General Motors, said Dave Cobb, vice-president of marketing for the Olympic committee, known as Vanoc.

Cobb even announced Tuesday they'd signed up a new sponsor, to be named in the new year.

Still, everyone remains worried that something is going to go wrong as the world economy tanks and Canada teeters on the brink of recession.

"We went through a process of identifying areas in our budget where we can be more efficient and reducing future hires is one area to free up some money in case those revenues don't come through," Cobb said.

"If we carry on and continue to be very successful, we'll have an opportunity, six months from now or whenever the time comes, to potentially add some things back, but at this stage we think we need to be more cautious."

Organizers are also cutting down on the number of staff who travel on behalf of the Games.

The revised budget will be released early next year after it gets the final stamp of approval at the next board meeting.

"It's a balanced budget and the order of magnitude in the budget was roughly in the same place as it was," said John Furlong, the chief executive officer of the organizing committee.

He wouldn't say whether that means the $1.62 billion bottom line would stay the same.

And while Furlong has suggested organizers would like to cushion their contingency fund, Poole said Tuesday that might not be the case.

"I would say it's more likely to be less," he said.

He said in the "cash-in side" is what's at risk in the current economic environment.

At Tuesday's meeting, the board also approved prototypes for the gold, silver and bronze medals athletes will receive at the Olympic and Paralympic Games.

The designs are now before the International Olympic Committee and if approved, will be revealed late next year.

In addition, the board authorized $2 million for a chairlift to be installed at Whistler Creekside, the site of alpine skiing events in 2010.

Details were scant but organizers said it will only be in place for the Games and then be moved to another mountain afterwards.

The board meeting came as the International Olympic Committee prepared for its annual meeting in Lausanne, Switzerland beginning Wednesday.

At that meeting, the board will review preparations for the Vancouver Games, the 2012 Summer Olympics in London and 2014 Winter Games in Sochi, Russia.

London is struggling to secure private financing for its Olympic village, and Sochi must build virtually all its venues from scratch in much tougher economic conditions.

In a recent address to the European Olympic Committees, IOC president Jacques Rogge stressed the need for holding down costs.

"The Games are not anymore in a growth mode," he said. "They are in a conservation mode. ... We must make sure the Games do not become too sophisticated, too big and too costly."