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VANOC short $54M for operating budget

Organizers of the 2010 Winter Games said they are seeking about $54 million in revenue to meet projections included in a revised and balanced operating budget released today.

The new budget contains $127.3 more spending than VANOC made public in 2007, bringing the grand total to $1.76 billion.

Senior Games officials said today’s financial plan includes $77 million in contingency funding to offset unplanned expenses or revenue losses. That’s an increase of about $27 million from 2007 estimates, a number officials were confident would see the organizing committee through the current economic downturn.

“Those contingencies are necessary to protect us and to look after the interests of the organization given the climate and what might lie ahead,” CEO John Furlong told reporters.

VANOC faces several potential revenue shortfalls with a year to go until the Games. The International Olympic Committee has signed up nine out of 11 companies for its sponsorship program, leaving $26 million still to be committed.

VANOC is looking for four or five partners to fill a $10 million gap in projected domestic sponsorship revenues. And the organizing committee said it needs to sell $18 million worth of local advertising to sponsors and other businesses.

Executive vice president Dave Cobb said he expects VANOC to generate “the significant majority” of the $54 million still due, but admitted the economic downturn means businesses may be reluctant to invest in the Games.

“We know corporate budgets have been cut back,” he said. “People are looking very carefully at money."

Nonetheless, he was confident that VANOC’s contingency fund would cover any revenue shortfall.

“It’s probably the greatest contingency ever in the budget of an Olympic games,” he said.

VANOC still has $50.1 million out of an original $100 million projected in 2007 to cover unexpected expenditures or revenue losses.

The organizing committee decided to pump $27 million into the fund after the economic downturn hit last fall. To free up the money, VANOC made “hundreds” of financial reallocations, including a delay on new hires and reducing pay increases for staff.

Furlong said the organizing committee saved about $5 million by cutting medal awards ceremonies at Whistler’s Celebration Plaza. The operating budget was also given a boost by strong ticket and merchandise sales.

“In the middle of an economic downturn we’ve had orders for tickets of $350 million in Canada,” Furlong said. “People are excited about coming here.”

Senior officials said the additional $127.3 million in spending announced today won't neccesarily raise the cost of holding the Games. They said most of the money is for goods and services such as buses that will be paid back by sponsors and partners.

Geoff Dembicki is a staff reporter for the Hook.

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