Will liquidity crisis be felt by Vancouver, London Olympics?

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How to finance the spiraling cost of Olympics venues is a tough one in the best of economic times. Particularly in light of the $40 billion that China spent on last summer’s Beijing Games.

What with the credit crunch, fears of a recession and governments taking stakes in troubled and failing banks, it remains to be seen how much of an impact the financial crisis will have on the organizing committees in Vancouver (2010 Winter Games) and London (2012 Summer Games).

Vancouver Games organizers acknowledge that they ended their most recent fiscal year with a $48.1-million (Canadian dollars) deficit. But organizers also said that they are on track toward completing facilities, anticipated having a deficit at this point in time and still expect to break even.

Meanwhile organizers in London are responding to the credit crunch by trimming the size of the Athletes Village, a move that could save $150 million. The new plan calls for 2,700 apartment units, down from 4,200. That means more athletes per unit.

Andrew Zimbalist, a sports economist at Smith College in Northhampton, Mass., suspects that the London Games will go ahead as planned. ‘My reading is that the credit markets are loosening up and that, in a pinch, the IOC could help out with financing,’ Zimbalist said in an e-mail. ‘So, at the end of the day, I think financing will be more expensive but available.’

-- Greg Johnson