“Had we known what we now know, would we have bid for the Olympics? Almost certainly not,”  Britain’s minister for the Olympics Tessa Jowell, who regrets organising the Olympic Games in the midst of the current global financial crisis, told some 40 leisure industry bosses at a dinner in early November.

This regret tarnishes the image of cheers and tears of joy shed by the British candidates when the International Olympics Committee (IOC) announced the result of the selection process on July 6, 2005. After four rounds of voting, London won 54 of the 104 votes and was declared the host city for the 2012 Summer Olympic Games. There was intense suspense until the very end due to tight competition with Paris.

Deserting sponsors

The financial crisis is bad news for the London’s Olympics organisers.  Adding to their troubles, certain sponsors have chosen to withdraw from the Games.

On November 18, weekly newspaper SportsBusiness reported that American manufacturer Johnson & Johnson refused to renew its sponsorship deal, worth a hundred million euros, with the IOC. They were the fourth sponsor to pull out. Kodak, Manulife and Lenovo were the first three to withdraw their deals.

British Airways chairman Martin Broughton also admitted to the FT Sports Summit in London in early November that his company would not have signed the sponsorship deal with London 2012 in the current financial crisis.

And yet the organisers refuse to lose hope. "We have signed up seven 'Tier One' partners (Lloyds TSB, EDF Energy, Adidas, BA, BT, BP and Nortel) and two 'Tier Two' supporters (Deloitte and Cadbury) - meaning we are two thirds of the way toward reaching our domestic sponsorship target with three and a half years to go," Adrian Basset, spokesman for the London Organising Committee of the Olympic Games told FRANCE 24.

Rise in initial budget

The British organisers had to increase their initial budget for the Games, a bad move in the current economic downturn. In 2005, London anticipated a budget of 2 billion pounds (2.3 billion euros). Two years on, the government announced a total budget of 9.3 billion pounds (11 billion euros).

However, says Bassett, a large proportion of this budget relates to the regeneration of one of the poorest parts of London. This part of the budget wasn’t initially presented to the IOC, which only required the bid team to present a budget for building the venues and games-related costs.

Competing with the lavish Beijing games

Everyone is asking the same question: will London be able to top Beijing’s lavish show?

Pressure is mounting as British officials are trying to cut costs. In an interview with British newspaper The Daily Telegraph, London Mayor Boris Johnson sounded optimistic, insisting that, “There is never a bad time to stage a spectacular event like the Olympic and Paralympic Games and, in the current economic climate, I believe London is extremely fortunate to be hosting the Games in 2012.”