Organisers of the 2018 Pyeongchang Winter Olympics said Monday they expect a series of new sponsorship deals after a South Korean state audit revealed a huge shortfall in forecast revenue and snowballing borrowing.
Concern at the financial success of the Games grew after a lack of sponsorship income forced Pyeongchang to depend heavily on borrowing, mostly from the government, to ensure preparations stay on track.
The Board of Audit and Inspection said in a report last month that Pyeongchang generated no income in 2013 and just 3.5 billion won ($3.2 million) last year, far short of the expected total income of 85 billion won over the past two years.
This year, however, the Games organising committee predicts “far higher revenue”, saying it expects to sign a series of new sponsorship deals soon.
“Talks are under way with various potential sponsors, and we hope good results will come in the near future,” said Lee Ji-Hye, a committee spokeswoman, without disclosing the estimate for this year’s income.
The audit results showed that Pyeongchang had borrowed 21.5 billion won in the past two years.
Lee said preparations for the 2018 Games would be stepped up this year, helped by more sponsorship money and financial support from the central government.
“Everything will be on track this year,” she said.
There are also worries about the status of Cho Yang-Ho, the organising committee’s president and Korean Air CEO, after his daughter Cho Hyun-Ah was arrested for delaying a flight due to a tantrum with the chief purser over snacks.
The scandal has undermined the reputation of the airline as well as that of Cho Yang-Ho, who was credited with leading Pyeongchang’s successful bid to host the Games at the third attempt.
But committee officials said the affair would have almost no impact on his role in helping attract big-name sponsors.
“He has been carrying out his business here as usual, affected little by the scandal,” one said.
Pyeongchang, a northeastern alpine town, had predicted it would cost more than seven trillion won to build venues and infrastructure for the 2018 event. But construction has been delayed due to lack of funding.
As the event drained financial resources, officials in Gangwon province where Pyeongchang is located warned at one point that they may have to give up hosting the Games unless they get more support from the central government.
The option of moving some events to Japan was also mooted when the International Olympic Committee adopted reforms aimed at making future Games more cost-effective and sustainable for bidding cities.
President Park Geun-Hye flatly ruled out any venue changes, promising to extend more government support for the Games.
On Monday, however, Gangwon province governor Choi Moon-Soon mooted the idea of sharing snowboarding with North Korea to help ensure it takes part in the 2018 Games.
“We can consider symbolically sharing freestyle snowboarding, which does not take much money to build,” he told Yonhap news agency, adding the idea would need approval from the IOC.