LAUSANNE, Switzerland (Reuters) - The International Olympic Committee has drafted an austere 2009 budget due to the international financial crisis and could delay a U.S. television rights deal for the 2014/16 Games until late next year.
The IOC has yet to agree on a broadcast deal for the U.S. market for the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Olympics because of the credit crunch.
Tokyo, Rio de Janeiro, Madrid and Chicago are the 2016 candidates with a decision due in October next year.
Richard Carrion, an IOC member and chief negotiator for broadcasting rights, said on Wednesday a deal for the U.S. market, the most important IOC television contract, could take place after the election of the host city.
He said potential bidders would also prefer it that way.
“I don’t see us moving quickly forward because all prognostications we are seeing are that advertising will be down,” told reporters.
“Right now the whole mood is negative for the economy. Yes, they (broadcasters) always prefer to wait.”
Carrion said knowing the host city could be an advantage in negotiations, especially if Chicago won.
“It could, as this removes some of the uncertainty and could work to our advantage,” he said.
The IOC’s biggest source of revenues are broadcasting rights with close to $4 billion alone for the 2010-2012 two-Games package. An additional $1 billion is expected from its top sponsors’ program during the same period.
NBC, which agreed to pay about $2.2 billion for that period back in 2003, will have to bid for the rights of the next quadrennium.
“We are certainly expecting to see NBC back (in the bidding process),” Carrion said.
Several other U.S. broadcasters including Fox, ESPN and ABC, have been reported to be considering bids.
Carrion said the financial crisis had not seriously affected the IOC because most future sponsorship and broadcasting deals were already signed.
“If you look, our sources of revenues are pretty much in place. The financial situation is solid and that gives us the ability to wait it out,” he said.
The 2009 budget, though, would be tight given the market conditions.
“Austerity is the right word. I don’t think we are panicking but it is an austere, realistic budget,” Carrion said.
The IOC reserves have taken a hit of about 14 percent partly by the strengthening of the dollar and the drop of stock markets.
“In the last three to four months we took some market hits,” Carrion said, adding reserves were now a little over $400 million. He ruled out any job cuts.
Editing by John Mehaffey