10 November 2008

UK Governmentââ¬â¢s Ã&#pound;79m Olympic shortfall

The UK Times on line reports that Sainsburyââ¬â¢s is in talks with the Government to help to plug a Ã&#pound;79 million hole in the London 2012 elite athletes funding programme.

The supermarket giant is in final negotiations with Fast Track, the agency appointed by Andy Burnham, the Culture Secretary, to raise the missing millions from the private sector under a sponsorship scheme called Medal Hopes. It is thought that the discussions are about a Ã&#pound;1 million-a-year package to be offered to five ââ¬Åâœtier oneââ¬~ sponsors backing 1,500 Lottery-funded athletes to the Olympics.

An announcement is expected in the next few weeks. The deal would offer hope to the 24 sports that receive lottery money as they await news of their allocations for the 2009 to 2013 funding cycle. More than a third are braced for cuts as UK Sport, the Governmentââ¬â¢s funding agency, juggles resources. It had budgeted for Ã&#pound;300 million over the next four years as part of a Ã&#pound;600 million package announced by Gordon Brown in the 2006 Budget.

But the Ã&#pound;100 million (of the Ã&#pound;600 million) that was to be raised commercially has yet to materialise. Increased lottery receipts unearthed an extra Ã&#pound;21 million, but there is a Ã&#pound;79 million gap in the programme designed to get Britain to fourth place in the 2012 medals table.

Burnham made it clear this week that a mix of lottery cash, taxpayersââ¬â¢ money and private capital would be the future funding model for sport. ââ¬ÅâœThis is how we fund excellence in the arts,ââ¬~ he told the FT Sport Industry Summit in London. ââ¬ÅâœPart of the legacy [of the Olympics] should be an even better system of funding for elite sport. There is only so much public money.ââ¬~

Medal Hopes is underpinned by a contractual obligation on every publicly funded athlete to give three days a year to promote the National Lottery. This time, which is rarely used, is to be packaged in three tiers of sponsorship, from national to regional and local level. Sponsors would have access to a pool of 1,500 athletes, from household names such as Chris Hoy, Britainââ¬â¢s most successful Olympic cyclist, to unknowns in low-profile sports.

Sports chiefs who heard the pitch this week were largely positive, although they conceded that the amount of money to raise looks formidable as Britain enters its worst recession for more than 70 years. ââ¬ÅâœI wonââ¬â¢t say itââ¬â¢s not challenging, but itââ¬â¢s worth trying,ââ¬~ David Sparkes, the chief executive of British Swimming, said. ââ¬ÅâœIt brings athletes into public view that otherwise would never be.

Who the hell had heard of Rebecca Adlington until she won a gold medal [in the swimming pool in Beijing]?ââ¬~

They do, however, share concerns in the industry about the logistics of managing athletesââ¬â¢ time against their training schedules and the demands of existing sponsors. There is also the expense: an agency would probably have to be hired to do the work.

ââ¬ÅâœThere is a moral obligation for athletes receiving public funding to put something back into society and if that obligation can be monetised to help fill the Ã&#pound;79 million void, then great,ââ¬~ Rod Carr, the chief executive of the Royal Yachting Association, said. ââ¬ÅâœThe question is whether the return on investment is sufficient. The jury is out.ââ¬~

The Olympic sponsorship market is already crowded, with Sir Clive Woodward, the director of elite performance at the British Olympic Association, seeking Ã&#pound;5 million a year for his coaching academy and the London organising committee needing a further Ã&#pound;250 million to help to cover the Gamesââ¬â¢ Ã&#pound;2 billion operating budget.

Fast Track is in talks with several potential sponsors besides Sainsburyââ¬â¢s, while continuing to explore other fundraising options. ââ¬ÅâœWeââ¬â¢ve made progress in devising certain programmes and we are pleased with the level of support so far,ââ¬~ Andrew Owen, the director leading Medal Hopes, said last night. ââ¬ÅâœThereââ¬â¢s still work to do. We will be going to the market and we expect the nature and shape of our programmes to evolve.ââ¬~

UK Sport will decide on 2012 funding for Olympic sports at a board meeting next month. It is expected to allocate grants on the basis of committed funding and not potential income from Medal Hopes. This means sports that underperformed in Beijing or are unable to offer serious medal contenders for London will still face significant funding cuts.

The 2012 numbers game

24 Sports in Britain that receive lottery funding

1,500 Athletes to whom sponsors would have access under the Medal Hopes programme

Ã&#pound;2bn Operating budget of the 2012 Olympic Games

4th Position the British Olympic Association wants the Great Britain team to finish in the medals table in London in 2012

Ã&#pound;79m Shortfall that exists in the London 2012 elite athletes funding programme

Ã&#pound;4-5m Size of the ââ¬Åâœtier oneââ¬~ sponsorship package on offer

A Report by The Mole

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