Debt, Bankruptcy, and Cutbacks

Vancouver’s 2010 Games are starting to look more red than green.

Nortel Networks filed for bankruptcy in the United States and Canada on Wednesday, earning it the dubious distinction of being the first official 2010 sponsor to go mams up. (GM can’t win anything these days it seems.)

The company, which has limped along since mid-2000, enduring 16 rounds of layoffs, had accumulated US $6.3 billion in debt as of the end of last Sept. and has almost twice that amount in liabilities. It was also suppose to be Vancouver 2010′s official supplier of network telecommunications equipment.

The “in-kind” sponsorship deal, signed in May 2007, called for the company to supply somewhere between $3 million and $15 million in hardware so that Bell—the official telecommunications service provider—could create a secure video, voice and data sharing network.

In a statement, Ward Chapin Vanoc’s chief information officer, shrugged off the news, saying the company kept organizers apprised of their troubles, and remains “committed” to the Games

“Today, Nortel reaffirmed its commitment to its Vancouver 2010 sponsorship. Much of Nortel’s commitments to the Games have been delivered and will be in place by May,” said Chapin.

But it’s yet more negative publicity for what is threatening to become the bad news Olympics.

On Monday, Vancouver city council voted unanimously to seek provincial approval to borrow an additional $458 million to fund the completion of the 2010 Athletes Village in False Creek. At this point, no one is quite sure just how much taxpayers will shell out for the $875 million development, but the latest loan comes on the heels of a $100 million bailout to the developer, Millennium Development Corporation, last Oct.

Then there are the spiraling security costs for the Games. Ottawa announced yesterday that it will pony-up $5.6 million more to improve security on B.C.’s ferries in the lead up to 2010 leading up to the 2010 Olympic Games. (The money is earmarked for distinctly unsexy things like fencing and improved training.) But that is a drop in the bucket. As the Vancouver Sun reported last week, BC and the feds—facing cost overruns in the hundreds of millions—are currently going through the budget line by line, trying to figure out how to stick each other with the bill.

Still, all this nasty financial news may have a silver lining for Canadian athletes. Their funding, boosted by the Own the Podium program, seems secure heading into the Games. But not so for some of their competitors. As the Seattle Times reports today, the US ski teams have just been hit with a major budget rollback, meaning pay cuts, staff layoffs, and that some B-team racers are going to have paying their own way. Ouch.




Browse

Debt, Bankruptcy, and Cutbacks

  1. Does that mean Bode Miller won’t have as large a booze budget?

  2. Remember the last time that the Olympic games went under – the ones in Greece? The Roman politicians took them over, used them for propaganda purposes, and ran them into the ground along with the rest of their empire. Too much hubris, too much debt, too many subsidies, too many wars, too many taxes, too much inflation.

    But that was a long time ago. I’m sure that people are a lot smarter nowadays and would never fall for that.

  3. Wow, this Vancouver 2010 Olympics… Will we ever, if EVER keep our money instead of paying taxes?

  4. Great article, it's scary how common bankruptcies and consumer proposals are these days.

  5. It's starting to get scary how many bankruptcies and consumer proposals we're administrating these days.. our debt settlements seem to be on the decline. Never a good sign.

Sign in to comment.