V Krishnaswamy: Mammoth muck-up

BIZSPORT

Almost three decades ago, Montreal staged the 1976 Olympics and for years after that the residents of the citywere still paying for the sporting extravaganza. The residents of Athens could well be in the same position, if the present situation is any indication.

Athens and Greece have been in hot water for a long time now. Ever since 1997, when the city won the right to host the Games ahead of Rome, Stockholm, Cape Town and Buenos Aires, it has had to deal with scepticism and in-fighting. Organising an Olympic Games is a very difficult job and Athens is discovering that brutal truth.

Last August, a huge crowd of spectators, press and athletes gathered at a sparkling new rowing and canoeing venue north-east of Athens to watch the World Rowing Junior Championships. It was supposed to be a test for one of the many venues.

As the rowers climbed into their boats and the gun went off, the oars hit the water and then the boats promptly capsized. The executives of the Athens Organising Committee (Athoc) had not thought about the ferocious winds that rip through the region every summer. As many as five boats sank during the first day's qualifying rounds.

In the wake of the bribery scandal surrounding Salt Lake City's winning bid for the 2002 winter Games, the International Olympic Committee had played down the commercial aspect of the games by restraining sponsorship and other revenue generators. So the Athens games began tapping government coffers to an extent not seen since the 1980 Moscow Olympics.

Pat Glisson, chief financial officer of the 1996 Atlanta organising committee, once said an Olympic finance chief's job is to "create a Fortune 500 company from scratch, then take it apart at the end."

In the last two years, Athens has missed many deadlines and budgets have mounted and as a result of that two CFOs went in rapid succession. Now it is Ioannis Spanudakis, a 50-year-old former Dow Chemical executive, who's been in the hot seat since March 2001.

Athens expects 16,500 athletes and team officials, 60,000 volunteers, 22,000 accredited journalists and broadcasters, and over five million ticketed spectators to descend upon the ancient city for the two-week Games.

Along with finding accommodation for these masses, 35 competition venues as well as 72 training facilities are needed. Also, existing infrastructure has to be upgraded by the government in time for the games. In effect, more than seven years of work goes into something that lasts for 17 days.

The IOC, to shore up its scandal-hit balance sheet, cut the percentage of broadcast revenue it passes on to organising committees to 49 per cent, from 60 per cent.

So Athens faces a further shortfall. Athoc itself, appealing to "the ideals of Olympism," has restricted the maximum number of official local sponsors to 40 (down from 100 in Sydney and 200 in Atlanta).

It has also limited ticket sales to 5.3 million compared to 7.6 million in Sydney and 11 million in Atlanta, and cut ticket prices by 30 per cent compared to four years ago.

The net result: the burden of staging this summer's Olympic Games in Athens has increased by an extra one billion euros. A big security bill and a last-minute push to get venues up to scratch has seen costs soar and the budget that was for 1.4 billion euros has shot up to 2.4 billion euros.

Earlier this month the new Greek government confirmed it would pay for additional costs of staging the Games. Naturally, the burden in the long run will fall on the Greeks.

Meanwhile, the IOC has also confirmed it has secured an insurance policy on the Games "" at a cost of $170 million. The cover is the first time the IOC has ever insured against a Games and comes against a backdrop of international terrorism and strained political climate.

Incidentally, rumours say security concerns could lead to the US Olympic team pulling out of the Athens Games altogether. Former Olympic swimmer Mark Spitz, in an interview, said the threat of terrorism could see the US team decide not to travel to Greece. However, the claim has been denied by the US Olympic Committee.

Yet, the threat always exists. For the Olympics and the athletes. Sometimes it does seem the Olympics have grown too big for their own good. Now that they have reached this position, they cannot be downsized either. Did someone say Catch 22?