Government funding helped pay for the opening ceremony in Vancouver. (Getty)
(ATR) New figures show that government infusions of cash rescued the 2010 Winter Olympics from budget woes brought on by the global recession.
The British Columbia government, which is liable for any losses, disclosed July 9 that it bailed out VANOC for almost $50 million. The infusion helped transportation and accommodation and to truck snow to Cypress Mountain to rescue snowboarding and freestyle skiing from the warmer El Nino winter.
The federal government gave VANOC another $30.7 million last fall after the IOC pledged $22 million should VANOC face a deficit from its $1.76 billion operations budget.
B.C. Finance and Olympics minister Colin Hansen said the central government cost of the Games was $925.2 million.
The original B.C. budget was $600 million, which rose to $765 million because of a 2009 cost-sharing arrangement on security with the federal government.
"We faced incredible challenges in the year leading up to the Games,” Hansen said in a teleconference.
“Certainly the global economic climate that we went through over those months going back to September 2008 was really unprecedented.”
Governments of Vancouver, B.C. and Canada paid a combined $2.74 billion to host the Games, which is higher than the $2.5 billion estimate by the B.C. Auditor General in 2006. The costs do not include sponsorships by Crown corporations or services performed by government agencies.
The VANOC budget was supposed to rely on revenue from broadcasting, tickets, souvenirs and sponsorship, but the recession harmed all four categories. Key sponsors General Motors and Nortel went bankrupt in 2009. The advertising slump left VANOC with $12 million unsold out-of-home advertising spaces, which were given to the province for tourism advertising.
VANOC experienced cash flow problems in March 2009. The same week that no VANOC executive attended SportAccord in Denver, chief financial officer John McLaughlin made a formal request to the government for funding help on the torch relay and ceremonies.
Hansen said the provincial government was “constantly” updated on VANOC finances but was compelled to spend more. In the end, he said, the Games helped boost the province’s economy and gained worldwide attention.
“We wanted to make sure that these were spectacular (Games),” Hansen said. “VANOC had the budget to do a good job on things like the opening ceremonies, we felt with a few added dollars we could make a bigger impact internationally and boost the reputation of B.C. and Canada.”
The report showed VANOC spent $11 million on B.C. Place Stadium and received an additional $14.4 million for the Feb. 12 opening ceremony. The provincial government also spent $19 million to prepare the stadium for the Games. The province also spent another $7.6 million on the torch relay.
VANOC’s last regular quarterly report was issued last December and it won’t report again until late this fall with a final report. McLaughlin continues to anticipate a balanced budget, even after it was revealed that it relies on public money. Funds remain to be collected from some sponsors and licensees, several contracts remain to be reconciled and make-whole agreements with Whistler Blackcomb and Cypress Mountain will be finalized this month or next.
Reported and written in Vancouver by Bob Mackin . For general comments or questions, click here.
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