Officials behind the Glasgow 2014 Commonwealth Games are about to sign a multi-million dollar deal with the same marketing agency which last week was sacked for "non-performance" by the organizers of this year’s Games in Delhi.
Sports Marketing and Management, is a Melbourne, Australia-based business which specializes in raising sponsorship for sports bodies and events. SMAM has long-standing deals with the Australian Olympic Committee, British Swimming and also Commonwealth Games Scotland.
Glasgow 2014 refused to disclose the details of its negotiations. However, with the sponsorship target for the 2014 Games expected to be around $60 million, SMAM, working from rented offices opposite the Ritz Hotel in London, could expect to be paid commissions of at least $5 million on top of any management fee allowed under their Glasgow contract.
"We’re pretty close to the point of signing it," a Glasgow 2014 spokesman told ATR. "We’re just nailing down the details."
SMAM was announced in April as Glasgow 2014’s "preferred bidder". SMAM has previously raised money for the 2000 Sydney Olympics, and the Commonwealth Games in Manchester (2002) and Melbourne (2006). For British Swimming, SMAM was behind its $22m, six-year deal with British Gas, the privatized utility.
SMAM was one of three companies that bid through Glasgow’s tendering process. The company’s references were described by an insider as "absolutely superb".
Intrigue, Allegations
Political intrigue and widespread allegations of corruption over late-running Commonwealth Games building projects resulted in the suspension or resignation of three members of the local organizing committee last week due to start in just seven weeks’ time, Delhi, the first Commonwealth Games to be staged in the world’s biggest democracy, appointed SMAM as their sponsorship agent in July 2007.
According to the Delhi organizers, SMAM has raised more than $80m in sponsorship revenue, better than for any previous CWG. The snag for the Australian marketing whizzes is that Delhi had set them a final target of nearly $200m.
Last Thursday night, Lalit Bhanot, the secretary of the Games organizing committee, said, "The executive board has decided to terminate the contact with SMAM.
"We had fixed Aus$122m [$105m] to be brought by June 30 but they failed. This is the reason of their termination. Legal opinion says we can terminate them on three-day notice. Not even one rupee has been paid to SMAM."
The decision follows complaints last week from India’s finance minister that multi-million sponsorships sold to state-funded organisations would earn SMAM easy commissions.
Indian Railways, the Delhi Games’s biggest sponsor, announced it would withhold all its 1 billion rupee (about $30 million) payment to the event unless it was given undertakings that none of the cash would be used to pay commission to SMAM, who might have expected to bank at least $5 million from this deal alone.
It was feared that other state-owned organizations – Central Bank, Air India and NTPC, that had pledged a combined 1.5 billion rupee to the Games – might follow the Railway’s lead and pull their sponsorship fees.
The Times of India has also reported that payments worth more than $12m to SMAM and a Swiss firm, Event Knowledge Services, are under official investigation, something which SMAM’s chief executive, Michael Bushell, has strongly denied.
"SMAM has always operated in full conformity with applicable laws and regulations and any insinuation about inappropriate or unlawful activities is completely unfounded and without substance,'’ the company stated.
Claiming that further sponsorships for Delhi were expected to be announced in the coming weeks, SMAM even offered to forego millions in commissions – though not its fixed management fees – on any sponsorships arranged with India’s public bodies. It was not enough, though, to avert the organizing committee’s decision to cancel its contract.
The Delhi Games, to be staged from October 3-14, expects about 9,000 competitors and officials from 71 nations from what was once the British Empire.
Fears for Quality of Venues
With at least $2.5 billionspent on the event, it is the costliest Commonwealth Games ever staged, although unofficial estimates say the final price will be at least three times that. India’s sports minister, M S Gill, has said the cost of organizing the event has risen 17.5 times since Delhi's bid was made in 2003.
Opposition politicians are claiming that much of the building work in the city for the Games has been done on the cheap, while contractors have collected inflated payments.
One Delhi politician described the Games as "an organized looting operation".
Among the Delhi officials to resign on Thursday was the treasurer of the organizing committee, Anil Khanna, after it was shown that a company run by his son, Adiya, had won a $200,000 contract to prepare tennis courts for the Games, but had used sub-standard materials.
The Central Vigilance Commission, an Indian government agency, inspected 15 Games-related sites and found evidence of poor-quality work and forged safety certificates. Almost all the organizations involved had ‘’used inadmissible factors to jack up the reasonable price'’, according to the official report.
India’s main opposition party, the BJP, has even raised fears that the poor building work will put competitors at risk.
‘’Forging and fudging of various quality and safety checks has widely thrown open the possibility of mishaps, blackouts and accidents,'’ said the BJP’s leader, Vijay Goel.
Suresh Kalmadi, the beleaguered chairman of the Delhi organizing committee, has spent much of the past week emphasizing that his body’s job is to run the Games, while it has been the Congress party-led Government’s task to oversee major construction projects around the city.
"All things are on track, it’s just that a few issues have been raised by the media," Kalmadi said in a lenghty interview with the Hindustan Times.
"Infrastructure does not come under me. All these things that are being shown — this is not ready, that is not ready – that is the job of the Sports Authority of India, the NDMC [the Delhi city authority] or Delhi Government."
Before it was announced that SMAM’s contract had been terminated, Kalmadi revealed that the agency stood to receive a 15 per cent commission on the bulk of its sales work, rising to as much as 23 per cent if all sponsorship targets were met.
Glasgow 2014 is clearly watching developments very closely.
Gordon Arthur, 2014’s communications director, ruled out there being any clauses in Glasgow’s deal with SMAM which would treat sponsorships from public bodies in a different manner to money raised from private businesses.
"It’s an over-simplistic argument about deals with public bodies," Arthur said.
"The negotiation is still a very complex one, whether the agents are dealing with private or state-owned organizations.
"It’s almost impossible to stage an event of this scale without seeking the backing of a major utility or centrally funded body."
Monsoons Strike Venues
Despite recent endorsements from UK Prime Minister David Cameron and London Olympic chair Sebastian Coe, many of Delhi’s Games venues are months behind schedule and much of India’s capital resembles a building site. Some key projects, like Delhi’s prestigious new airport, have been completed. But critically, the Metro link from the airport to the city center has not.
The monsoon rains have exposed serious leaks in the roof of the centerpiece Nehru Stadium, venue for the opening and closing ceremonies as well as track and field, while there was flooding inside the prestigious $15 million weightlifting centre during its official opening a week ago.
As workers desperately tried to sweep away the water from the auditorium during the opening ceremony, S Jaipal Reddy, the urban development minister overseeing Games preparations, tried to explain away the obvious problem.
‘’In this auditorium, where leaking is taking place, it has a different system," Reddy said, claiming that the building’s "system" had "been made to drain out water - those are being mistaken for leakage points. If there are some leakage points, they are being watched carefully and they will be attended to.'’
Written by Steven Downes.
Últimas Noticias
Sinner-Alcaraz, the duel that came to succeed the three phenomenons
Beyond the final result, Roland Garros left the feeling that the Italian and the Spaniard will shape the great duel that came to help us through the duel for the end of the Federer-Nadal-Djokovic era.
Table tennis: Brazil’s Bruna Costa Alexandre will be Olympic and Paralympic in Paris 2024
She is the third in her sport and the seventh athlete to achieve it in the same edition; in Santiago 2023 she was the first athlete with disabilities to compete at the Pan American level and won a medal.
Rugby 7s: the best player of 2023 would only play the medal match in Paris
Argentinian Rodrigo Isgró received a five-game suspension for an indiscipline in the circuit’s decisive clash that would exclude him until the final or the bronze match; the Federation will seek to make the appeal successful.
Rhonex Kipruto, owner of the world record for the 10000 meters on the road, was suspended for six years
The Kenyan received the maximum sanction for irregularities in his biological passport and the Court considered that he was part of a system of “deliberate and sophisticated doping” to improve his performance. He will lose his record and the bronze medal at the Doha World Cup.
Katie Ledecky spoke about doping Chinese swimmers: “It’s difficult to go to Paris knowing that we’re going to compete with some of these athletes”
The American, a seven-time Olympic champion, referred to the case of the 23 positive controls before the Tokyo Games that were announced a few weeks ago and shook the swimming world. “I think our faith in some of the systems is at an all-time low,” he said.
