Sochi expects $300M surplus from 2014 Winter Games

BY foxsports • October 13, 2011

Having already raised more than $1 billion in domestic sponsorships, Russian organizers of the 2014 Winter Olympics in Sochi hope to secure deals worth another $200 million and finish with a post-games surplus of more than $300 million.

Dmitry Chernyshenko, head of the Sochi organizing committee, told The Associated Press on Thursday the Olympic body will not need any government money despite the weakening global economy and competition from the 2018 World Cup in Russia.

''We are really confident we will not apply for public money from the state,'' he said. ''There is an obligation of the state to co-invest in the games, but my goal is to have this money as profit of the games.''

While Sochi has already secured $1.2 billion - an Olympic record - in domestic sponsorship revenue and tied up all of its top-tier sponsors, Chernyshenko said deals with a few second-level companies are still possible.

Several suppliers are in the pipeline to provide value-in-kind services worth $200 million, which would take total sponsorship deals to $1.4 billion, he said.

In addition, money from licensing, ticket sales, lottery revenues and IOC television rights and global sponsorships should help cover Sochi's organizing committee budget of $2.2 billion, Chernyshenko said.

Overall, he said, Sochi hopes to end up with a surplus of about $340 million.

''I would love to have that, but it will depend on the currency fluctuation and economic environment,'' Chernyshenko said in an interview after addressing the International Sports Event Management Conference.

Sixty percent of any profits would be put back into sports development in Russia, with the rest going to the national Olympic committee and the IOC.

Sochi has been competing for sponsors with other international sports events in Russia, including the 2018 World Cup. Last year, Sochi lost out on two potential major sponsorship deals with Russian diamond giant Alrosa and gas monopoly Gazprom.

The grim global economic situation is not helping.

''Of course, it's more and more difficult,'' Chernyshenko said. ''But that is why we are now dealing with signing up our suppliers.''

Sochi, a Black Sea resort, was awarded Russia's first Winter Games in 2007. Sochi is building virtually all of its Olympic venues from scratch, and Chernyshenko said construction remains on schedule.

Chernyshenko called Sochi the ''biggest construction site in the world,'' with a 50,000-strong force working around the clock, seven days a week.

He also reiterated details of Sochi's domestic torch relay, the longest in Olympic history - a 120-day, 17,000 mile journey across Russia involving 14,000 torch bearers.

The flame would go to the top of Russia's highest mountain, Mount Elbrus, and the bottom of the world's deepest lake, Lake Baikal.

Chernyshenko also confirmed plans, first announced in July by Deputy Prime Minister Alexander Zhukov, to take the flame into space. He declined to give details.

''We are in the process of negotiations now, and I expect we will announce it very soon,'' he said.

Meantime, Chernyshenko welcomed the prospect of Vladimir Putin opening the Olympics as head of state. Putin, currently Russia's prime minister, is set to become president again in March, swapping jobs with Dmitry Medvedev.

Putin, as president, was instrumental in Sochi winning the games when he lobbied IOC members in Guatemala City in 2005.

''From the beginning of our bidding campaign, he was the captain of our team,'' Chernyshenko said. ''It is natural for us that the team leader who contributed so much to the project and who made the momentum in Guatemala will be on stage in 2014, when his favorite baby will be delivered in the full swing. We look forward to him being there to welcome the world.''

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