Beijing on track for one record: profit

Since the Los Angeles Games, most hosts have struggled even to break even as the costs of running the Olympics have soared.

Beijing’s Olympic organisers had already forged deals with 10 domestic sponsors on top of the 11 companies that had signed global sponsorship deals with the IOC, Xinhua said. “We would like to see $1 billion in sponsorships, but there is much to do to reach that figure,” Jiang Xiaoyu, vice-president of the Beijing Organising Committee for the Olympic Games (BOCOG), was quoted as saying.

While around one quarter of that goal could come from Beijing’s share of the global sponsorships, China-based companies should pour in most of the cash, Xinhua said.

“The organising committee’s domestic sponsors pay even higher fees than the IOC’s global sponsors,” it cited Yuan Bin, director of the committee’s marketing department, as saying. Beijing has raised its original $1.625 billion Olympic operating budget to closer to $2 billion, in part due to security concerns. But Chinese organisers and the IOC are confident that mark can be equalled or surpassed.

“BOCOG’s budget will be met by the IOC’s contribution from the sales of broadcast rights and international sponsorship and also by BOCOG’s efforts in finding commercial partners and selling tickets,” IOC coordinating commission chairman Hein Verbruggen was quoted as saying.

Sales of tickets to the 2008 Games are expected to start in the first half of 2007.

Prices had not been set, but “the prices of tickets for the opening ceremony and some popular events will be relatively high,” Xinhua previously quoted BOCOG vice-executive president Liu Jingmin as saying.

Profits from sales of products bearing the recently released five mascots of the Beijing Games, the ‘Friendlies’, could reach as high as $300 million, Xinhua said.

But that figure could be optimistic, considering the mixed reaction the mascots, stylised dolls that represent a panda, a Tibetan antelope, a swallow, a fish and the spirit of the Olympic flame, have received in China. To stage the last Olympics, Athens set a budget of 1.9 billion euros ($2.4 billion), but ended up spending more than 9 billion euros, making the 2004 Games the most expensive in history.

Beijing has vowed to come in below Athens’ operating budget, but the total costs of getting the Chinese capital ready to host the Games will be far higher.

By 2008, Beijing expects to have spent a total of nearly $40 billion for the Games, most of which will go to building new roads and subway lines and improving the city’s power grid and environment.