Olympics Head Says No Public Cash Used for Rio After Bailout

  • City, federal governments this week pledged additional money
  • Rio 2016 organizers ran out of funds ahead of Paralympics

The head of the International Olympic Committee, wading into a sensitive domestic issue in recession-weary Brazil, said no public funds had been used to pay for the Rio de Janeiro Games even after local and national officials stepped in to bail out the organizers.

“There is no public money in the organization of this Olympic Games,” IOC President Thomas Bach said at a press conference Saturday, a day before the Olympics closing ceremony on Sunday. “The budget of the organizing committee is privately financed; there is no public funding for this.”

Bach’s comments seemed to be at odds with a pledge this week of additional financing from Rio’s mayor, and come amid a cash crunch for the committee staging the event. Organizers had said the entire 7.4 billion reais ($2.3 billion) budget for the Rio Olympics and the Paralympics in September would be funded by private sources, including sponsorships, ticket sales and a grant from the IOC.

Mayor Eduardo Paes this week pledged 150 million reais from Rio de Janeiro, and the government said state-owned companies would provide a further 100 million reais in emergency funding following severe budget cuts that threatened the Paralympics. That event will take place on a reduced scale, with some sites and media facilities scrapped.

Rio’s organizing committee didn’t separate the budget for the two games, and has been on a cost-cutting drive for much of the past year to ensure it could keep to a promise to remain privately funded. The scale of the crisis was made public by the International Paralympic Committee in recent days. The group said the participation of more than 50 nations was in doubt because a travel stipend of $8 million to participating nations had been delayed by more than a month.

‘Never Before’

“Never before in the 56-year history of the Paralympic Games have we faced circumstances like this,” IPC President Philip Craven said on Friday. “Since becoming aware of the full scale of the problem, we have focused all of our efforts on finding solutions to the problems.”

Rio has spent billions on new stadiums and transport infrastructure to prepare for the first South American Olympics, with a final bill expected to be about $15 billion. Those funds have come through a mix of private and public spending.

The games are winding down in a political and economic climate that no one envisioned when Rio was awarded the quadrennial sporting extravaganza in 2009. President Dilma Rousseff has been suspended and is headed for an impeachment trial in the Senate, and Brazil is mired in its worst recession in decades.

The host nation will beat its best gold medal tally if it can claim a sixth win. The Brazilian men’s soccer team plays Germany in the final on Saturday for gold. It previously won five golds at the 2004 games in Athens. Assured of at least a silver in soccer, Brazil will equal to its record medal haul from London in 2012.

‘Much Better’

Bach said the games provided a boost to Rio, adding that the city and its residents, known as Cariocas, had been largely ignored since the nation’s capital was moved to Brasilia in 1960.

“Imagine if this situation would have continued like this,” Bach said. “Then imagine where Rio would be today. So this is why I am absolutely convinced that history or maybe the Cariocas from tomorrow will talk of the Rio de Janeiro before the games and the much better Rio de Janeiro after the Olympic Games.”

Spending on the event hasn’t pleased everyone, and pre-games polls showed most Brazilians were opposed to staging the Olympics. The event has passed off without major incident, although ticket sales were sluggish at many venues.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE