May 30 - London 2012 has ridden to the financial aid of the British Olympic Association (BOA), as suggested exclusively by Andy Hunt, former BOA chief executive, in an interview with insidethegames three months ago.
Publishing its final report and accounts, London 2012 revealed today that it had achieved revenues of £2.41 billion ($3.66 billion/€2.82 billion) over the eight-year life of the company, while running up costs of £2.38 billion.
This was enough to trigger the maximum payout to the BOA of $8 million (£5.3 million/€6.2 million) to honour contractual obligations under their Joint Marketing Plan Agreement.
Hunt told insidethegames in February that the BOA – which was financially hard-pressed virtually throughout its period as host National Olympic Committee – could bounce back into profit if London 2012 declared a surplus when its final accounts were filed.
London 2012's announcement was also good news for the British Paralympic Association (BPA), which will get $4 million (£2.6 million/€3.1 million), and the British Government.
London 2012 said it would pay "approximately £20 million ($30 million/€23 million)" to the Department for Culture, Media and Sport (DCMS) to "fulfil commitments under certain Government grant agreements, such as the grant to cover the rental cost of the Village after it passed into public ownership".
These payments override the terms of the Host City Contract, which stipulated that 20 per cent of any surplus would go to the International Olympic Committee (IOC), with a further 60 per cent to be used for "the general benefit of sport in the UK".
London 2012 said though that, as part of an agreement with the National Lottery, royalties of £1.3 million ($1.9 million/€1.5 million) received but not required to fund the operation of the Games would be "donated to Games legacy projects, with £1 million ($1.5 million/€1.2 million) going to the International Inspiration charity and £0.3 million ($0.5 million/€0.4 million) going to the Join In Trust".
London 2012 chairman Sebastian Coe – who, since the Games, has, of course, taken over as BOA chairman – said: "One of our key objectives was to deliver an outstanding Games within a balanced budget and I am proud to say that we have achieved this, thanks to the strong management of our core finances.
"It means we can make payments to the BOA and BPA, allowing both organisations to move into their next round of Olympic and Paralympic commitments with some additional certainty, return monies to DCMS, while also leaving a legacy for the International Inspiration charity and Join In Trust for them to continue their excellent work."
David Hemery, BOA vice chairman, said London 2012 had lifted the morale of the nation and given a gift to the world.
"The news today is an opportunity for the BOA to say thank you – to LOCOG, to the British Government, to the thousands of volunteers who were tireless in their enthusiasm and to the millions of people who supported the Games and Team GB."
BPA chairman Tim Reddish said: "We are delighted to receive this payment and congratulate the LOCOG commercial and financial teams...
"The money announced today will be used by the BPA to support both its mission of making the UK the leading nation in Paralympic sport and our vision of 'through sport, inspiring a better world for disabled people'."
Sports Minister Hugh Robertson said: "In what was a tough economic climate, LOCOG did a great job to secure over £2.4 billion ($3.6 billion/€2.8 billion) from the private sector in the build-up to the Games.
"The sound management of the finances has meant commitments to the BOA and the BPA have been met ahead of the Sochi 2014 and Rio 2016 Games.
"As LOCOG winds down, I would like to place on record my thanks to Seb Coe, Paul Deighton [former London 2012 chief executive] and the whole team for their hard work over the years in staging a remarkable London 2012 Games."
London 2012 also said it had achieved £190 million ($289 million/€222 million) of savings on grants that were made available to the company.
Contact the writer of this story at [email protected]
April 2013: London 2012 showed Britain "can get big projects right" Government committee
February 2013: Exclusive - London 2012 surplus set to put BOA back into black