POSTED: Thursday May 7th 2009
FOR IMMEDIATE RELEASE

90% of Madrid 2016 income is guaranteed, demonstrating the bid's reliability

90% of income is guaranteed, demonstrating the bid’s reliability

  Financial solvency  -        More than 40% of the Games’ income is guaranteed by the IOC, the TOP sponsorship and the Paralympic subsidies supplied by the three public administrations  -        Another 50% comes from local sponsors, licences and ticket revenues  -        The IOC’s Games-related income will be tax-free  -        Technicians have drawn on past experiences to design a realistic, easy to manage financial plan  Madrid, 7 May 2009 -The financial chapter is one of the fundamental parts of Madrid’s bid to guarantee the organization of the Games. When presenting the financial speeches, the Mayor of Madrid, Ruiz-Gallardón, qualified the budget as conservative, realistic and secure.  “It’s conservative in its hypothesis, because all the concepts it integrates have been assessed in relation to current Spanish market prices and take into account the economic situation. It is realistic, as proven by the fact that 77% of the installations have already been built. And it is secure because the organizing committee manage and finance the Games without institutional hindrance (in spite of having their guarantees) thanks to private resources,” the Mayor explained. Juan Antonio Samaranch Jr. took a similar line in assuring how Madrid’s bid is founded on two strategies: conservative revenue generation and cost control. “The magnitude of our budget is planned in accordance with the economic outlook; more than 90% of our income is either guaranteed or almost certain. At the same time, our expenditure forecast is based on market rates and supported by blue chip companies.” Félix Plaza and Gerardo Corral gave more detailed presentations, touching on all aspects of financing. Budget and guaranteesMadrid 2016 has in place all required guarantees: financial, through the Spanish Government, the Region of Madrid and the City Council, for the coverage of any possible shortfall, and additionally supported by other public administrations and private sector organizations. Institutional commitment ensures the bid’s feasibility. Along with this is a budget with the following characteristics: flexibility and efficiency, intensive use of new technologies, harmony between supply and demand, priority of renting above purchasing, and the internal generation of added value.  Before preparing the budget, its controllers consulted IOC technical manuals which exact information of their needs in each area, previous budgets both from the bid cities and the organizing committee’s planning to gauge expenditure and income. Experts in each area have also helped determine which products, goods or services were necessary, along with their economic quantification.  In total, the budget is $2.6 million dollars and can be considered balanced, easy to manage and harmonized. The Games will be completely self-financing with subsidies dedicated exclusively to the Paralympic Games. Income and expenditureMore than 40% of the income is guaranteed by the IOC’s contribution, TOP sponsors and the Paralympic subsidies supplied by the three public administrations. Another 50% comes from local sponsorship (based on a systematic analysis of the Spanish sports sponsorship market and backed up by interviews with directors of blue chip companies and Club Madrid 16), licences and ticket revenues. In other words, 90% of the income is already covered. According to the speakers, external financing will start to be reimbursed in 2015 and will be finished by 2017. Cash needed for the functioning of COJO (or OCOG, organizing committee) will be reinforced by a credit line, permanently open and used when necessary.  According to the Financial Director of the bid, the external budget of the COJO is slightly above $3.4 million dollars. “More than 70% of that figure is destined for sports facilities and the Olympic Village, a magnificent legacy for the city. All expenses are guaranteed through private sector initiatives or as a result of public sector contributions.” TaxesThe tax system affecting the financing of the Games follows the same model applied to the 1992 Barcelona Games and, more recently, to the 2007 Americas Cup. Regarding corporate tax, all IOC income related to the Games will be free of tax. The COJO, as a non-profit organization, will have the right to tax exemptions. Concerning income tax, all income obtained by non-residents with clearance to organize an event in Spain will be exempt from taxes. Spain’s customs policy allows temporary admission of articles (materials, resources, tools, etc.) with total duty exemption. - ENDS - For further information please call Malcolm Munro on + 44 7795013006 www.madrid2016.es   FINANCE IntroductionAlberto Ruiz-Gallardón, Mayor of Madrid SpeakersGerardo Corral, Finance Director of the Madrid bidStephane Eyme, Accenture business managerFélix Plaza, Garrigues partner (law firm)Juan Antonio Samaranch, IOC member (Spain) 

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Keywords · Madrid 2016 · Olympic bid · IOC


Name: Malcom Munro
Organization: Madrid 2016 Olympic Bid
Email:
Phone: +44 (0) 7795 013006
URL: http://www.madrid2016.es/EN/Paginas/Home.aspx


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