Melbourne 2006, the organisation which last week secured the 2006 Commonwealth Games, is being forced to pay up to &£7m to handle marketing rights for the event.
The group, led by chairman Ron Walker, will also have to fund a substantial payout to IPG-owned global sports marketing agency Octagon, which has a long-term contract with the Commonwealth Games Federation.
A CGF spokesman in London says it is the first time an organising committee has planned to take over marketing rights for the games and he confirms negotiations are well advanced.
The move follows earlier reports (MW June 3) that the next Commonwealth Games – Manchester 2002 – faces a funding shortfall of at least &£30m unless more top-line sponsors can be signed up. Manchester 2002 appointed Octagon rival IMG to handle sponsorship and TV rights for the event as far back as 1996.
No one at Melbourne 2006 was available for comment as Marketing Week went to press.