Manchester Games faces funding hurdle

The lack of top-tier sponsors is threatening to wreck Manchester’s showpiece 2002 Commonwealth Games. Will they be found in time? By Tom O’Sullivan

Tony Blair told the House of Commons on May 12 that the Commonwealth Games “will be a tremendous showcase not just for Manchester but for the whole of Britain”.

Just one week later a select committee of MPs was recommending that the Government, as a matter of urgency, examine the financial plans and needs of the Manchester 2002 Commonwealth Games, accept the necessity for additional central government support and determine the scope for such support … And involve itself more closely in the “strategic management and promotion” of the games.

The two statements are not wholly incompatible but they do underline that while everything is rosy in the Blair garden, the reality is somewhat different. The Culture Media & Sport select committee stopped just short of demanding that the Government pump money into the 2002 Games – the estimated cost of which has ballooned from &£58.5m a year ago to between &£70m and &£90m today.

But unless the costs are reduced or income from sponsorship, TV rights, merchandising and ticket sales increases, then Manchester City Council could end up with a shortfall of at least &£30m.

Sports Minister Tony Banks, who in evidence to the committee supported the idea of greater Government involvement, will give the committee’s official response within the next two months.

Manchester City Council wants the type of public support the Government gave the Millennium Dome project rather than a cheque to cover any shortfall. It wants the Government to become a national cheerleader for the Games and believes that by giving more support it will reassure potential sponsors – effectively to have an indirect role in raising the funding.

“There is a clear association between the Government and the Dome. It is this active support we seek,” says council leader Richard Leese. He is more diplomatic than some in Manchester who believe that because the Games was won in 1995, before Labour came to power, it is more interested in landing the football World Cup in 2006 than in what is happening in Manchester in 1999.

But, as is almost universally agreed, the success of the 2002 Games is essential to the success of any future bids to host international sports events. There is now a growing feeling that the Games has to become a “national” rather than just a Manchester event – hence Blair’s statement in the Commons – to be more appealing to sponsors and also to boost potential TV income.

But what of the sponsors? The Games – through Mark McCormack’s International Management Group, which was hired to negotiate the sponsorship and TV rights deals back in 1996 – is seeking ten or 12 top-tier UK sponsors to stump up &£2m either in cash or similar plus a range of smaller deals. So far only Manchester Airport has signed up for one of the top tier packages. The major TV contracts will be with UK and Australian broadcasters but these may not be signed until after the Sydney Olympics in 2000.

A straw poll of sponsorship agencies finds little enthusiasm for the Games in the market. Matthew Patten, joint chief executive at M&C Saatchi Sponsorship, says: “We are now one of the fastest-growing sponsorship agencies and yet we have never had a single Commonwealth Games proposal across our desk.

“Three years is nothing. They should have been talking the event up a year ago. Even though no contracts would have been signed, you need to build the hype to create and enable the marketing and sales of sponsorship.”

The agencies raise questions about the relevance of the Games, the competition for sponsorship money from other events – not just those taking place in 2002 – and the management of the Manchester event (especially in the light of the resignation of chief executive James Seligman at the end of last year).

Ironically, the person charged with selling the sponsorships, merchandising and all other commercial aspects of the Games is Niels De Vos, formerly general manager of sponsorship at the New Millennium Experience Company. He joined as commercial director a month ago, just as the sports programme for the games was finalised.

His appointment has already been seen as reason for renewed optimism by Rodney Walker, chairman of UK Sport, who has been drafted in as chairman of Manchester 2002 Ltd – the operating company for the Games.

Walker has been investigating the event’s finances. “Whether in the end I will have to seek government (financial) assistance I don’t yet know. We are now generally more optimistic about picking up sponsors.”

Walker’s financial report will be completed within a fortnight – he believes the TV rights for the Games can earn more than the &£23.5m previously estimated, but refuses to disclose any specific figures.

Banks warned the select committee: “Manchester, with Government support, has got to do far more to sell the Games…. We are in grave danger of talking down the 2002 Games if we are not careful.”

The gravest danger of all is that sponsors are not talking about the Games at all. The ball is now firmly in Tony Banks’ court.

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