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“There is no money for the Olympics. Dear Prime Minister, there are four years left and we are worried.”
The headlines come from a letter sent to Italian Prime Minister Mario Draghi and published by the Rome newspaper Il Fatto Quotidiano this week.
In it, representatives of the governments of Lombardy and Veneto regions, the cities of Milan and Cortina and of the provinces of Trento and Bolzano complain of the lack of progress in the organization of the Games, especially in the sponsorship sales area.
The Milan Cortina 2026 Foundation – the organizing committee – is headed by former telecommunications executive Vincenzo Novari, and recently reported a loss for the second consecutive year, this time of of €21 million (~$22.2 million U.S.: €1 = $1.06 U.S.). Even more concerning, the letter notes, is that little has been done.
A total of €550 million in domestic sponsorship sales has been forecast, against the total budget of €1.58 billion, or about 35% of the total. But the reporting in Italy is that no sponsorship agreements have been signed, and that Novari mentioned in a recent interview that discussions are ongoing for sponsorships that would total about €280 million.
The International Olympic Committee is contributing $652 million in cash to the organization of the Games (about 39%) and there will be significant ticket revenues. But the domestic sponsorship piece is crucial to the financial health of the Milan Cortina project.
Earlier this month, Tony Estanguet (FRA), the head of the Paris 2024 organizing committee, told the Association of Summer Olympic International Federations:
“Without going into too many details, the Covid crisis and the terrible conflict in Ukraine have caused major breakdowns in production, and supply chains. They have also generated an inflationary environment that was impossible to anticipate a few months ago.
“As a result, even though we have already secured most of our revenues, this challenging context puts the Paris 2024 overall budget at risk, since most of our expenses have not been incurred yet. This is why we have two main objectives for the months to come. The first one is to continue – thanks to your support – to push optimization and savings even further, behind the scenes, avoiding any risk for the Games delivery.
“And the second objective is to maintain the level of ambition, to best showcase your sport’s athlete performance and send to the world the best possible image of the Olympic Movement.”
The Paris 2024 budget is currently set at €3.98 billion (~$4.28 billion U.S.), with a sponsorship target of €1.1 billion, which is on track to be met. The French supermarket giant CarreFour was announced as a new, top-tier sponsor of Paris 2024 this week.
Nothing is easy. In the Milan Cortina situation, the management of the organizing committee is now a central focus and Novari had been rumored to be excused in May, but that did not happen. But the regional governments which came together to win the Winter Games do not want to make a request for public funds for the 2026 effort, and certainly do not want to fund the Games themselves any further.
Covid. Ukraine. Perhaps a global recession? Even after the ordeals of Tokyo and Beijing, still no time to relax for the International Olympic Committee and its organizing committees.
~ Rich Perelman
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