San Francisco's Private Bid for XXX Games
By Michelle Logsdon - November 14, 2001Hosting the Olympics is an honor and a huge responsibility. City residents bear the burden of sharing their home with thousands of "visitors" and sometimes paying an arm-and-a-leg for it.
The San Francisco Board of Supervisors, Nov. 13, signed off on a unique agreement that would privately fund the city’s insurance policies and all other hosting costs if San Francisco is chosen to host the Games of the XXXth Olympiad.
San Francisco is one of four cities currently in the running to host the 2012 Summer Olympics. The other competitors—New York, Washington and Houston—are spending more state and local money in their bids, while San Francisco’s is the only bid completely funded from private sources.
"From the beginning we’ve pledged to host the games (if we are chosen) through private funding," Tony Winnicker, the Bay Area Sports Organizing Committee’s (BASOC) director of communications, told adjustercom.com. "That reflects the values of the San Francisco bay area—tax money should be used to pay for other areas."
Winnicker said the committee’s budget is conservative and safeguards the public against any shortfalls. The committee reviewed the budgets and operations of past host cities such as Atlanta, Sidney and Salt Lake City in order to make educated projections for San Francisco’s budget.
"We project the games to cost 1.9 billion and revenues to be approximately 2.8 billion," said Winnicker. "Then we discounted the revenues 620 million and marked up our expenses 340 million to create a cushion to protect the taxpayers."
San Francisco will derive revenues from four sources: media rights, ticket sales, merchandising, and international and national corporate sponsorships.
The committee is shopping around for two insurance policies totaling $450 million. One policy will cost $250 million and protect against financial deficit and the other will cost $200 million and protect against unanticipated revenue losses from events such as an earthquake or cancellation.
"The policies do exist and can be purchased," said Winnicker. He says the committee has been talking to Marsh Inc. and several other insurance companies that have shown interest in supplying the policies.
Marsh Inc. is a risk management firm. One of its specialties is dealing specifically with companies and organizations involved in the sports industry.
The United States Olympic Committee (USOC) does not concern itself with the origination of the funding for game hosting but the International Olympic Committee (IOC) does, according to Bob Condron, USOC director of media services. "It’s not really a USOC decision or desire, it is an IOC decision. They firmly support the local government buying into it. The agreement needs a government signature."
The agreement Condron is referring to is called the "Joinder Understanding." That document describes the city’s bid and provides the required signatures. The "Joinder Understanding" agreements are due at the USOC by Nov. 30. As of Oct. 26, one of the four cities had turned in its document.
"The bid can be privately funded but the government’s name has to be on the dotted line to show support and backup," said Condron.
Now that the Board of Supervisors approved the agreement in a 9 to 2 vote, the document heads to Mayor Willie Brown’s office. Winnicker said he is confident the mayor will approve the agreement as well.
The IOC will announce the chosen city in 2005.
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