IOC set for billion-dollar decision on 2008 Games

China is in line for a billion-dollar pay day if Beijing wins the right to stage the 2008 Summer Olympics.

The city that wins Friday's International Olympic Committee (IOC) vote will be guaranteed at least $1.2 billion from the sale of television rights and sponsorships for the world's most prestigious sporting event, according to IOC marketing director Michael Payne.

Olympic sources say Beijing is the favourite to hold off strong candidates Paris and Toronto in the vote of all IOC members and win the right to stage the Games for the first time.

Japan's Osaka and Istanbul, the other candidates in the five-city battle, are unlikely to figure highly in the vote.

Gone are the days when the huge cost of staging the Olympics provided an intimidating prospect. In the modern sports world of billion-dollar deals for television rights and sponsorship, winning the right to stage the Games has huge economic advantages as well as political and sporting prestige.

Many of the world's stock markets will be watching Friday's decision with special interest since a Beijing victory could have a major influence on China's economic development in the next seven years and on the international blue chip companies that are working hard to tap its attractive market.

As Olympic leaders prepared for Tuesday's second day of an IOC executive board meeting ahead of Friday's decision, IOC marketing commission chief Dick Pound said the financial advantages of the Games were attracting more cities to bid.

Cities around the world, including London and major U.S. cities, are already preparing possible bids for the 2012 Games, once the venue for 2008 is decided. The decision for 2012 will be taken in four years.

The 2008 race started with 10 bidding cities before the organisation reduced the number to five for the deciding vote.

"It is a huge net plus. If you can't organise the Games for a billion dollars, you are just not doing it right," Pound said in an interview with Reuters. "In Atlanta (in 1996), they built the stadium, they built all those facilities out of the Olympic revenue.

"Twenty-five years ago in Montreal the worldwide television revenues were $35 million dollars. By Atlanta they were $935 million. For last year's Sydney Games they were $1.3 billion."

He added: "I think you can go to your taxpayer and say: 'look it is not going to cost us anything'."

DONE DEALS

The IOC's deals for television rights which involve U.S. network NBC have already been signed to cover the 2008 Games. The winning city will be guaranteed at least $850 million from the deal.

The IOC also has long-running sponsorship contracts with major blue chip companies such as Coca-Cola, Kodak and McDonalds. The guaranteed revenue from the so-called "TOP" sponsors for the winning 2008 city is expected to be around $300 million.

China's bid has been controversial, however, because of the country's record on human rights.

The ghost of the 1989 Tiananmen Square massacre helped derail the Chinese capital's bid for the 2000 Games, which were awarded to Sydney. This time Beijing has faced opposition from U.S. lawmakers and groups supporting Tibet, which China has ruled with an iron fist since the 1950s.

But the IOC is expected to back Beijing, believing there is more chance of influencing China in the next seven years by handing it the Olympics than by turning its back on the country for the second time in a decade.

INTERESTING MARKET

China is an interesting market for the Olympic sponsors, though Pound said Friday's result would make no difference to the overall television or TOP sponsorship revenue.

He predicted China might make less than a North American city from ticket sales but may be able to generate a great deal of interest in the local sponsorship deals which host cities are allowed to strike.

"It (the general revenue) is unaffected by where we have the Games. The TOP sponsors will be the TOP sponsors and their numbers will be the same whether it's China or Toronto and TV numbers will be same," Pound said.

"After that it is what you get for tickets. In China with a lower standard of living, you might have a lot more tickets but lower average prices than say North America."

But he added: "With the local sponsorship programme, with a market the size of China, my guess is, with the interest of the Chinese public, is that you will have a huge uptake."

Last year's successful Games in Sydney also had economic spin-offs for tourism and export earnings for Australia.

Some $56 million in export earnings is expected this year in Australia off the back of the Games and over the next four years it is estimated that the promotional impact of the Games will drive an additional 1.1 million visitors to Australia.

IOC members are set to make the billion-dollar decision in Moscow on Friday.