2008 Olympics set to raise $1bn in sponsorship

Corporate sponsorship of the 2008 Olympics in Beijing is on course for a record figure of more than $1bn, confirming China's new-found status as a magnet for trade and investment.

Deals already agreed with six sponsors - including Volkswagen, Bank of China and China Mobile - are set to raise about $600m as large groups rush to promote their brands in China.

"They will absolutely reach the figure of $1bn," said Gerhard Heiberg, chairman of the International Olympic Committee's marketing commission. "I think Beijing will break all records."

The sponsorship bonanza provides commercial justification for the IOC's gamble of entrusting the Games to China. By voting to stage the most spectacular show in sport in the world's most populous market, the IOC shrugged off concerns about human rights.

The sums raised by Beijing will also remind the five main contenders for the 2012 Games - London, Madrid, Moscow, New York and Paris - that hosting the Olympics brings opportunities as well as risks. The 2012 host will be chosen in July.

The 2008 Games should be an important landmark as China opens up to the outside world, just as the 1964 Games in Tokyo and the 1988 Olympics in Seoul did for Japan and South Korea.

The Beijing domestic sponsorship figures exclude amounts raised by the IOC's so-called "TOP" worldwide sponsorship programme for multinational companies. In the 2001-04 Olympic cycle - which covered the Salt Lake City and Athens Games - 11 TOP sponsors put up $603m. They included Coca-Cola, Kodak, Visa International and Samsung.

Athens is understood to have raised €248m ($325m) from its domestic sponsorship programme. The IOC puts the equivalent sums raised by the 2000 Sydney and 2002 Salt Lake City

Games at $492m and $494m respectively.

Broadcasting was the Olympic movement's biggest source of funds in 2001-04, generating $2.24bn. Sponsorship yielded $1.34bn, ticketing $608m and licensing $81m.

The 2008 Games should enable China's athletes to put the seal on the rapid progress they have made in recent years, perhaps by topping the medals table. China finished second to the US at last year's Athens Games, winning 32 gold medals, 17 silver medals and 14 bronzes.