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Olympic marketing head warns of sponsor shortfall

September 9, 2013

BUENOS AIRES, Argentina (AP) — The head of marketing for the IOC warned Monday that organizers for the 2016 Rio de Janeiro Olympics are facing tough conditions trying to sell local sponsorships for South America’s first games.

Speaking Monday before the International Olympic Committee’s general assembly in Buenos Aires, Norwegian Gerhard Heiberg said the climate had changed in Brazil, which is facing a slowing economy that makes companies less willing to invest in sponsorships.

Leo Gryner, chief operating officer of the Rio organizing committee, acknowledged last month that $700 million in government money might be needed to balance the operating budget for the games if there is a shortfall in selling local sponsorships.

Rio’s organizing committee exceeded its initial sponsorship target of 1 billion reals ($440 million).

Heiberg said Beijing 2008 and London 2012 each reached about $1.2 billion in local sponsorships, and many expect Rio to have a similar target.

Heiberg, head of the IOC marketing commission, did not reveal any current Rio sponsorship numbers.

“They (Rio) had a very strong start in the commercial program and they have completed several deals so far,” Heiberg said. “However Rio is facing a tough Brazilian economy and the climate, the market, certainly looks very different than when the program was launched.”

Rio officials have acknowledged that next year’s World Cup in Brazil has cut into the pool of sponsors interested in investing in the games. Inflation and the loss of value in the local currency in terms of dollars also hurt.

Heiberg’s assessment came a day after Carlos Nuzman, the head of the organizing committee and president of the Brazilian Olympic Committee, was grilled by IOC members about delays organizing the Rio games.

IOC members told Nuzman on Sunday that Rio organizers must explain the “social investment” the Olympics could bring to the city to make sure the Brazilian public gets behind the games.

The Rio organizing committee has yet to announce its operating budget — the budget for operating the games themselves — but it is expected to be between $3.5-4 billion. Local sponsorship money goes into that budget.

Gryner said recently the capital budget, a mix of public and private money aimed at building supporting infrastructure for the Olympics, could be about 35 percent above the $11.6 billion listed in the original bid.

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Follow Stephen Wade at http://twitter.com/StephenWadeAP

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