Sponsors shy away from Commonwealth Games

Will the 2010 Commonwealth Games' Organizing Committee (OC) be able to repay the Rs 1,600 crore it has taken as loan from the Centre to host the mega event?

The OC's reply to an RTI on the amount raised so far from sponsorships, paints a grim picture. With just four months to go for the Games, the organizers have managed to seal deals worth just Rs 243 crore in cash.

Sponsorships, apart from TV rights, were expected to form the major chunk of revenue for the organizers, who are also expecting to raise some money through merchandising and ticket sales.

According to OC's reply to the RTI on May 11, it has on board only five sponsors - Air India, NTPC, Hero Honda, Central Bank of India and Coca Cola - for the Games so far. It has raised Rs 143 crore in cash from the sponsors and got Rs 60.70 crore in kind. Another Rs 100 crore has been promised by the Indian Railways.

The OC has roped in Australian firm Sport Marketing and Management as its advertisement consultant in charge of bringing in sponsors. SMAM was a consultant at the 2002 Manchester Games and 2006 Melbourne Games as well. The firm's commission, according to OC chairman Suresh Kalmadi, varies from 20% to 25% of the deal amount.

"They had asked for 30% commission. But after negotiations it was worked out 20% to 25%, depending on the amount they bring in," Kalmadi had told TOI recently.

Kalmadi has admitted that both Melbourne and Manchester Games did not get many multinational sponsors, an indication that the OC may also lose out on that front.

This means it would be even more difficult for OC to raise money to repay the government loan. When asked whether SMAM has been able to rope in any local sponsors, Kalmadi said: "All, except the Railways."

TV rights deals, the next big hope of fund generation, have more or less been sealed. Deals with the likes of BBC in United Kingdom and Network Ten and Foxtel in Australia among others are believed to have generated close to Rs 300 crore.

Merchandising and tickets sales are unlikely to generate a huge amount of money, which could leave OC in heavy debt after the Games are over.

Kalmadi, however, remained optimistic. "We are hopeful of getting a lot of money. We hope to cover the deficit," he said.