Economic downturn eats up VANOC's post-2010 venue endowement fund

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VANOC had put aside $110-million of the $580-million venue construction budget towards a post-Games 30-year venue endowement operation fund for Richmond Oval, the bobsled run, and the Olympic Park.

But with the current economic climate, they will need to take away from that fund and put it towards Games operations.

Potential 2010 Winter Olympics profit eaten up

By Jeff Lee, Vancouver Sun
April 1, 2009 5:29 PM

The organizers of the 2010 Winter Olympics no longer expect to leave a financial surplus for future sport development.

The same worldwide economic downturn that has bankrupted companies and left tens of thousands of people without jobs has also eaten up — for now — any potential Olympic profit, John Furlong, the head of the Vancouver Organizing Committee, said Wednesday.

Furlong said Vanoc is struggling just to make sure it breaks even when the Games end next year.

Vanoc doesn’t have the same financial stability as Calgary did when it left a surplus from the 1988 Olympics that blossomed into a $200 million endowment, he said.

“It is not business as usual. It is not like it was. We will be very happy to get to break even, and if we get beyond that, well, we will have thought we did far more than anyone thought possible.

“To leave a financial legacy against everything that is going on today would be quite an achievement. We want to, but nobody is going to be running around today predicting that,” Furlong said.

Vanoc has never quantified how much of a surplus it hoped to generate. It received $110 million from the federal and provincial governments for a trust fund to look after the future needs of the Nordic and bobsled venues and Richmond’s fast-track speed-skating oval.

It also agreed to give the Canadian Olympic Committee and the IOC each 20 per cent of any profits from the Games, and to put the remaining 60 per cent into the venue trust fund. But Furlong said that is unlikely to happen now.

His comments came as the International Olympic Committee’s Vancouver Coordination Commission wrapped up its penultimate visit with a caution from commission chairman Rene Fasel that Vanoc now “cannot rest on its laurels.”

Fasel said the IOC found no significant problems with efforts to date and that a spate of recent test events had raised confidence in Vanoc’s operations. But the IOC also knows Vanoc is struggling financially because of the worldwide recession.

“Vanoc will also need to remain vigilant to any risks that may present themselves over the coming year while continuing to enhance its overall operations,” Fasel said.

Furlong said he was still working on a plan to bring medal presentation ceremonies back to Whistler’s celebration plaza, but won’t have an answer until later this month.

Vanoc’s financial problems are complicated by the fact the IOC still has not signed the last two of 11 promised top sponsors. As a result, Vanoc is $30 million short in its $1.7 billion budget.

Gilbert Felli, the IOC’s executive director of Olympic Games, said he still hopes to find sponsors in the life insurance and health products categories, but suggested Vanoc would have to live within its means if they don’t materialize.

Vanoc executive vice-president David Cobb said he expects the IOC to make up the difference.

“Clearly the IOC knows that it is in our budget and it is a big amount of money, and if it was to disappear it would be a challenge for us,” he said.

“They are doing their best to secure that money, and if they don’t, we will have talk to them at that time.”

Dick Pound, Canada’s IOC member, said he believes the IOC will make good.

“I don’t think the IOC is under any misapprehension that Vanoc will be looking to them for its share of one or two TOP (The Olympic Program) sponsor categories,” Pound said.

During the bid phase, Pound at one point wrote to The Vancouver Sun saying that “if your city cannot make a profit from hosting the Games these days, then you just aren’t doing it right. Vancouver can do it right.”

However, he has changed his views in the current climate.

“I think the public would be happy if there was no more taxpayer money put in than was budgeted, and if we win both [men’s and women’s] hockeys. I don’t think they give a s--t about anything else,” he said.

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