Olympics:London Seeks Four Sponsors to Pledge £50m Each for 2012

London 2012 organizers yesterday started the search for four top-level sponsors who will be asked to commit £50m each to the cost of running the games. Sir Keith Mills, London 2012’s deputy chairman, said the organizing committee would be seeking sponsors in four key categories - automotive, banking, telecoms and utilities. It is hoped at least two will be in place by the end of the year.

Mills told the first 2012 Business Summit, attended yesterday by senior politicians, games organizers, and 250 representatives from industry, trade unions and tourism, that 35% of the games’ £2bn running costs will be paid for by commercial sponsorship raised in Britain. The remainder will come from ticket sales, merchandising and a share of the International Olympic Committee’s broadcasting and sponsorship revenues.

London 2012’s deals will have to be complementary to the IOC’s official sponsors, who include Visa, Samsung, Kodak, Coca-Cola, Panasonic and McDonald’s. Mills revealed there would eventually be 10 first-tier sponsors; 20 to 30 in the second tier, which would be sought in 2007-08; and up to 50 in the third tier.

"Sponsors have a pivotal role to play not only in funding the actual games, but in helping Locog [London Organizing Committee for the Olympic Games] achieve a predicted operating surplus of up to £100m, 80% of which will be ploughed back into sport in the UK."

Tessa Jowell, the Olympics minister, held out the tantalizing prospect of £3bn in government contracts for the physical infrastructure of the games. Research has shown London’s gross domestic product could be boosted by £5.9bn with 104,000 new homes and 249,000 jobs in Stratford, east London.

"This doesn’t mean an outdated ‘buy British campaign’ but we do want to ensure that the public money spent on the games is recycled into the British economy wherever possible to the benefit of British-based companies and the people working in them," she said.

Digby Jones, director general of the Confederation of British Industry, warned that British firms must not lose contracts to competitors in Europe and the US because of red tape and contract law. "I want every single medal hung around the necks of athletes in 2012 to be made in Britain," he said.

Mills said British firms had a major advantage over their rivals because Olympic organizers had absolute control over where they placed their contracts. He said the medals would be made in Britain, following the example of Sydney in 2000, when they were struck by the Royal Australian Mint.