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Morgan:News:2010 |Moguls| #2113Here are three moguls we ran into today:
FURLONG FORECASTS C$65-C$70 MILLION IN SPONSORSHIP THIS YEAR
VANOC CEO John Furlong told reporters in Calgary that as far as corporate sponsorship of the Games is concerned, "We're hoping to get to C$65 million to C$70 million this year, and then close the program the following year." VANOC was hoping to reach C$725 million in sponsorship value to the Games, and estimates that the organization is around the C$600 million mark now. He says, however, that, "It will take us a little bit longer to get through the last C$125 million or so," Furlong said, adding, "If we can overperform, obviously we'd like to do that." His comments came after Canadian Pacific Rail became the fifth Tier-2 sponsor of VANOC, at as value to VANOC of about C$15 million, about three-quarters of that in VIK, the rest in cash.BASKETBALL CHAMPIONSHIP PULLED IN PART DUE TO OLYMPIC BUDGET CHILL
Canada's Globe & Mail newspaper is reporting today that a lack of economic interest caused in part by the 2010 Winter Games is responsible for the decision by the International Basketball Federation (FIBA) to move it's under-19 world championship to another country. The contest was to have been played by 16 countries in Vancouver this July. It's the second time the championship was forced to move. Vancouver was chosen on short notice after the original country, Malaysia, had organizational problems. A news release from Canada Basketball said the overall cost of staging the event was about C$2 million and Canada Basketball was expected to pay about C$1 million for television rights to the FIBA, but its contractor, Nucleus Networking and Consulting, discovered national and international television networks, as well as local companies, preferred to target their budgets on 2010 Olympic-related expenditures.DEUTSCHE BANK APPOINTS VANOC'S PHELPS TO ADVISORY BOARD
Deutsche Bank today announced several additions to its 12-person Client Advisory Board in the Americas, including Michael Phelps, a member of VANOC's 20-person Board of Directors. Phelps joints people such as Norman Augustine, the former Chairman and CEO of Lockheed Martin and former U.S. Treasury Secretary John Snow on the bank's panel. The Board was created to advise Deutsche Bank management and its clients on a range of strategic and marketplace issues, such as business development and growth, and economic, political and social trends.
Originally published to Morgan:News:2010:Gold subscribers on January 25, 2007
Morgan:News:2010 |Business| #2112
CP RAIL, WEST COAST EXPRESS AWAITING RESULTS OF VANOC TRANSPORTATION STUDIES TO DECIDE IF COMMUTER TRAIN EXPANDS DURING 2010 GAMES
CP Rail, VANOC's newest sponsor, said during this morning's announcement about its contribution that it expected to also use a Greater Vancouver commuter train system, known as the West Coast Express (WCE), to help VANOC move people during the Games.
As CPR president and CEO Fred Green put it, "Amongst the value of the things [VANOC CEO John Furlong and I] discussed was the value and possibility of helping to get people around town during what will be a very busy time and when certain areas will be cordoned off. I don't want to speculate what would happen today beyond what we do that, which is the West Coast run, or if that would even occur."
But Green later softened that concept during our interview with him. "We're a little ahead of ourselves," he said when asked if that meant CP would influence the schedule of the service during the Games.
It's a touchy subject. WCE is a wholly owned subsidiary of Translink, the government-supported regional transit authority. WCE receives about C$4 million annually in operating subsidy from Translink, and the City of Mission, at the eastern end of its route, last year contributed C$144,000 to Translink to also help subsidize WCE. The train operates on the CPR's right of way in the Fraser Valley east of Vancouver, and pays track rates to the CPR, but there has been a long-running battle -- involving lawyers, other government agencies and Freedom of Information requests -- between WCE to find out how those rates are calculated, and CPR, who doesn't want that information made public. The upshot of that dispute was eventually a reduction in track rates charged to WCE by CPR. Under the present agreement, WCE has access to CPR's lines and pays track rates until about 2015, well beyond the Games.
"It's my fault for even mentioning it," Green says today, speaking of WCE's involvement. "If we're going to do something like that, the Organizing Committee would have to determine a need for it, and if it involved WestCoast Express, we would have to work with WestCoast Express. My commitment is that should there be a need to run over our tracks to enable the success of the Games through people movement, anything that we can do, including our assets, to enable that to occur, we will do."
The president of WCE, Doug Kelsey, echoes those sentiments. Kelsey has been a strong supporter of the 2010 Games for years, including during the bid phase, when the led the transportation planning. He is also now the chair of the Transportation Advisory Committee for the 2010 Games.
"All transit will be involved in supporting a successful Games," he says, speaking as the Committee chair, "and West Coast Express is part of that." But Kelsey says "the true operating plan" for transportation during the Games, "has not yet been determined. There's work going on on that now. It's still early days."
Kelsey says that the possibility of changes in the amount of track rates paid to CP as the result of potentially increased WCE schedules during the Games, is part of what has yet to be determined. "Fred got it right by saying it's too early. VANOC has to determine what the Games needs are, and those processes are going on right now, and we're helping to support VANOC on. We've got a lot of stuff going on, but those needs have not been determined yet. Once the needs have been determined, the next logical step is talking about the implications of the needs, and dollars become part of that. We know WCE has to run to get people to work anyway... but the question is about what supplemental services will be required, and that's the part that's not yet confirmed."
There was an increase in WCE service that was outlined in the bid, but Kelsey notes, "But the bid stage, and what is going to be needed for the Games can be two very different things, because times change and needs change. "We're still looking at the inputs to determine the outputs of the transportation services that will be needed."
Speaking as president of WCE, Kelsey adds that, like CPR, "We'll do what it takes to support VANOC's success here. I know CP feels that way, and we work very well with CP every day." But for track rates on future services, he says, "that still has to be worked through."
WCE service links the towns of Mission, Port Haney, Maple Ridge, Pitt Meadows, Port Coquitlam, Coquitlam and Port Moody with downtown Vancouver; the full distance is 65 kilometres. It operates ten trains and two so-called "TrainBuses" per day, Monday to Friday using 37 trains. It carries about two million people per year, an average of about 9,000 per day.
RESOURCES
West Coast Express:
www.westcoastexpress.com/
Originally published to Morgan:News:2010:Gold subscribers on January 24, 2007
Morgan:News:2010 |Moguls| #2111
Here are three moguls we ran into today:
2010 COUNTDOWN CLOCK TO START TICKING IN VANCOUVER FEBRUARY 12
The Olympic Countdown Clock is expected to be started during a ceremony at the Vancouver Art Gallery in the business core of the city. That will happen about noon on Monday, February 12. That's exactly three years to the day before the Opening Ceremonies of the 2010 Olympic Games.IOC CALLS FOR "MORE UNITY" IN FIGHT AGAINST DOPING
International Olympic Committee president Jacques Rogge today called for "more unity" in the fight against doping. Speaking at a symposium of news organizations organized by the Montreal-based World Anti-Doping Agency in the IOC headquarters city of Lausanne, Switzerland, he said athletes, media, sports organisations, governments and sponsors to speak out about doping. He said that several prominent cases during 2006, including incidents at the Torino Winter Games showed the situation is more prevelant, more people are being caught, and the doping supply networks and the drugs themselves are becoming more sophisticated. He also stressed IOC supports WADA's strict system of penalties for cheaters, including support personnel who have been caught helping athletes use doping methods. He said the IOC also supports WADA's education, prevention and scientific research. "Effective penalties are needed," he said, "but even that is not enough... if we can achieve a unity, we can close the gap between cheaters and doping controls. In our fight against doping, I include sponsors, because the commercial influence in sport continues to grow. Are sponsors doing enough to create an environment where doping is discouraged? I don't have the answer, but I think this deserves a closer look. It may be that cancellation clauses in endorsement contracts are not enough."VANOC HOPES ISU WILL APPROVE SKATING VENUE TEST EVENT IN FALL OF '08
There may be an approved skaing venue test in Vancouver in about 18 months. A VANOC spokesman says, "Dates for test events have yet to be formally approved by the ISU. VANOC hopes to have one combined test event with short track [speed skating] and figure skating in the fall of '08, but this is yet to be confirmed with the ISU." Vancouver is to host the 2008 Canadian figure skating championships next January at the Pacific Coliseum, a venue VANOC will be using during the 2010 Games, but it's seen as doubtful it will be an official Olympic test event under the sanction of the International Skating Union, which supervises such events, and VANOC.
Originally published to Morgan:News:2010:Gold subscribers on January 24, 2007
Morgan:News:2010 |Government| #2110
VANCOUVER PARKS BOARD TO DECIDE MONDAY WHETHER TO FURTHER DELAY DELIVERY OF A VANOC ICE RINK VENUE
The Vancouver Parks Board is expected to be asked during its meeting next Monday whether to shut down two important but aging east Vancouver ice rinks at the same time so they can be rebuilt for the 2010 Winter Olympics, or shut them down sequentially, further delaying one.
The pros and cons of the decision have to do with construction cost and schedule risks versus inconvenience to the organized and vocal customers of the heavily used rinks, primarily minor hockey and lacrosse. In either case, they will need to be moved to nearby -- also crowded -- arenas during the 18-month demolition and reconstruction schedules, but if both rinks are shut down at once during the prime seasons, that will make more of them unhappy at the same time. Their movement, in turn, could push minor hockey groups in those nearby rinks to go even later at night and even earlier in the mornings than currently, as well as possibly turn away groups that don't reside within Vancouver's boundaries, but who use the other east-side rinks.
The two rinks involved, which also include their adjacent community centres, are Trout Lake and Killarney. The Vancouver Parks Board has agreed to provide the two rinks to the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Games (VANOC) as ice practice facilities during the Games, and VANOC will need them no later than December 1, 2009.
Parks board staff are recommending the two rinks be shut down with an overlapping period where both will be out of service from late this summer to about September of 2008. Planning staff, talking about the construction industry, report that, "Cost escalation continues to be a significant factor. During 2006 the rate of escalation was 11%. For 2007, a lower number is currently being forecast at 6% on each of these projects. At 6% per year, purchasing power is being eroded at C$50,000 per month. Deferring the [start of] Trout Lake project to March, 2008, would enable a one-rink [at a time] closure scenario, but purchasing power could be reduced significantly, in the order of C$400,000."
The Parks Board is supervising the project, with some of the funding provided by VANOC per an agreement worked out several years ago with VANOC. The estimated total cost of the two replacement projects, to be built to LEED Gold standards, is about C$20 million, much of it derived from a capital plan approved by Vancouver taxpayers in a 2005 referendum, but VANOC's contribution of C$5 million is fixed, no matter what the final cost of the projects, under the agreement.
The subject of money on these projects is of considerable political importance to the Parks Board. Last September, hearing that its Olympic projects would be going over budget due to inflation and other factors, it approved a complex and creative refinancing deal that siphons funds from several future City and Park Board projects and cash flows, as well as adding money up front from the 2010 Organizing Committee in exchange for looking after conversion costs later, to keep the projects on time and on track. That included additional funding of C$6.5 million for the rinks project, bringing their total budgeted cost to C$26.5 million.
VANOC as of last fall was operating on the theory that both rinks would be completed by the fall of 2008, but delays in the Trout Lake project -- reportedly due to problems with soil conditions, which required additional studies -- has already pushed its completion date back by five months.
The Killarney project, in southeast Vancouver, is the most advanced. Work is expected to start in March and be completed by September, 2008. The development permit has been approved by the City of Vancouver, and Parks staff expect to appoint a construction manager "shortly." The Trout Lake project, in the design development and permitting phase, is expected to start in August and be completed in February, 2009. Staff are telling the Parks Board it "is currently on schedule."
The Trout Lake project is being designed by Walter Francl Architect of Vancouver for a fee of C$1.277 million, which also includes construction administration and the schematic design for it to be converted after the Games to a new community centre. Pushing its start date back even further, feel the Parks Board staff, would make everyone involved nervous. As they put it, "A March 2008 start would result in a projected September 2009 completion. This leaves relatively little time to December 2009 (Olympic deadline) and unforeseen in this scenario are construction delays which could only be overcome by overtime work which could be costly."
Originally published to Morgan:News:2010:Gold subscribers on January 24, 2007
Morgan:News:2010 |VANOC| #2109
CANADIAN PACIFIC RAILWAY NAMED AS VANOC SPONSORS TO MOVE FREIGHT AND SUPPLIES FOR 2010 GAMES
Canadian Pacific Railway (TSX/NYSE: CP) has been appointed as the Official Rail Freight Services Provider -- one of the Tier 2 sponsors -- for the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Games (VANOC).
VANOC expects it to provide about C$15 million worth of cash and value-in-kind services over time, as valued by VANOC. CPR president and CEO, Fred Green, says, "The vast majority -- probably 75% to 80% -- of our contribution over that period of time... the best description of that would be in-kind. It'll be the value of the things we can do quite effectively, and the value we can provide to the VANOC team will be quite extraordinary."
Green confirms the balance of about C$3 million to C$4 million will be cash to VANOC spread over the years of the arrangement, but he said those details were still being negotiated. "We will spread that contribution in whatever forms -- after discussion with VANOC -- about what is the easiest, most appropriate and when they need us to contribute."
The announcement was made by VANOC CEO John Furlong during a brief ceremony at the CPR Pavilion in Calgary, Alberta, CP's headquarters. The company services about 900 communities across Canada and has nearly 16,000 employees. The six-year agreement designates CP as an Official Supporter of the 2010 Winter Games, including sponsorship rights for the Canadian teams participating at the Beijing 2008, Vancouver 2010 and London 2012 Olympic Games.
Furlong says that for VANOC, the CP arrangement falls into three categories: cash, things "we've been able to identify within our responsibility, that can be moved over the period that CP can do for us that we would otherwise have to do." The third thing is "using the ingenuity, the magic and the imagination of a great company to create excitement [about the Games] and connect the country... and light the fire across the country that really gets Canadians excited about the Games, and helps Canadians understand what this [Olympic] opportunity is." Furlong said the shipping aspect does two things for VANOC: reduce complexity of the Games for VANOC managers, and turns over that responsibility to an organization that's both trained to do it and has the capacity to do it.
Green says the logistics, freight rail service and truck services included in the deal, which he says will not cost CP C$15 million to provide, will use, for the most part, existing capacity on the CP freight system to move equipment and materials needed by VANOC from across North America to the places where it's required. "The nature of what we are able to do -- we have some land available, or how we can help out with some commuter trains in Vancouver, the logistics capabilities and the movement of freight -- everything from buses to personal vehicles have to be moved from all over North America in an organized and effective operation, and that's in addition to all the materials." VANOC is expected to use a large number of jitney buses, among other vehicles, to move Olympic teams to various venues during the Games.
Green, however, says CP hasn't estimated the amount of tonnage involved in the arrangement. "To be honest, I can't tell you that we even tried to calculate that. We know there'll be hundreds of vehicles and hundreds of containers, and there will be undoubtedly all kinds of things we can't even imagine yet. I can't put it into that kind of order of magnitude, but whatever needs to be done to make this a success, we're committed to supporting the [VANOC] team." He also said "we will work out the details as we go forward" of how non-CP rail lines, such as those in the US that will be used to help move VANOC-bound shipments, would be compensated by CP or VANOC. "At the end of the day," he says, "we'll use transportation in whatever form makes the most sense to this [Olympic Organizing] committee with this huge task in front of them that will enable the to get their job done, so we're going to have to work through the details. But we're there to make sure they're successful." Green added that, "We will also build on our experience and leverage the use and visibility of our trains to help ensure VANOC makes these Canada's Games." He said that VANOC branding would soon appear on CP rolling stock. VANOC's logo appeared on CP's website this morning.
In addition, both Green and Furlong say they two organizations are still in negotiations over a number of additional functions CP and its employees would perform during the lead-up to the Games to help market them and "create excitement" about them, but Furlong declined to disclose these.
In May, 2005, Furlong said VANOC was thinking about using CP Rail's system to market the Games -- and the idea of peace at the same time. "We envision a unique and compelling concept," he said at the time, "A peace train travelling across the country -- on railway lines that track just above the world's longest undefended border -- showcasing and celebrating the values of peace, solidarity and fair play, and profiling the cultural diversity of Canada. A peace train could be a symbolic but powerful way to showcase the values of peaceful sport and unity among people. And as the peace train travels across our vast nation, we will take the opportunity to inspire Canadians, to touch the soul of the nation and celebrate our remarkable differences."
But asked specifically if the additional marketing plans included the peace-train concept, Furlong sidestepped the question, repeating the concept that negotiations about a number of matters were still underway.
CP's cross-country rail network runs not far from the Canadian/US border from Vancouver to Montreal, and also serves major cities in the United States such as Minneapolis, Chicago and New York City. More than half of the CP's freight traffic is in commodities such as coal, grain, chemicals and forest products, but it also ships automotive parts and automobiles. According to CP figures, to December, 2006, it moved
452,259 cars of materials that were not commodities, accounting for about 17% of all shipments during the year.
The busiest part of its railway network is along its main line between Calgary and Vancouver. The company is expected to release its fourth-quarter and full-year 2006 financial and operating results on January 30, which will be broadcast live via its website (click on the "Investors" link.)
Green is relatively new to his positions: he was appointed president in November, 2005 and CEO last May.
CP is the fifth Tier-2 sponsor of the 2010 Games. The others are British Columbia Lottery Corporation, the Royal Canadian Mint, Ricoh Canada and Teck Cominco.
RESOURCES
Canadian Pacific Rail's website:
www.cpr.ca
CP's investment community department's Assistant Vice-President Investor Relations is:
Janet Weiss,
Phone: 403.319.3591
E-mail: <investor@cpr.ca>
Originally published to Morgan:News:2010:Gold subscribers on January 24, 2007