London Olympics Get Financial Boost

The 2012 Olympic Games signed up Cadbury PLC as a sponsor on Tuesday, earning much needed funds amid fears that the global financial turmoil will leave organizers struggling to meet sponsorship targets as companies cut back spending.

The world's biggest candy maker has paid more than 20 million pounds (US$35 million) to use the London Games to market its products and to become the sole supplier of all confectionery and packaged ice creams to be sold within the Olympic Park.

While the deal is not proving popular with health campaigners who point out the link between candy and childhood obesity, it means that London organizers have now reached around two-thirds of their target of 600-700 million pounds (US$1-1.2 billion) from domestic sponsors.

Cadbury's deal was a so-called "tier-two" sponsorship, which costs at least 20 million pounds (US$35 million), as opposed to a "tier-one", which costs at least twice that amount.

There had been some speculation about Cadbury's involvement in recent weeks after it announced it was slashing almost 600 jobs as part of cost-cutting measures despite reporting a rise in third-quarter sales.

London 2012 chief executive Paul Deighton acknowledged that the financial climate is likely to be tough for some months, but said that the organizers did not plan to revise down their long-term fundraising target.

He said that no company has pulled out of discussions, and that the London Organizing Committee of the Olympic Games and Paralympic Games, or LOCOG, had enough flexibility to hold off on closing deals until companies were ready.

"While we are alert to the fact the economy is slowing down, having done so much is really helpful," he said. "If we end up doing more in 2010 and 2011 than in 2009, we are in a strong enough position to play it that way."

However, he added that a planned "clothing and homeware" sponsor, previously announced as a "tier-one" sponsorship could be downgraded to be a "tier-two" deal.

The committee had already signed up seven "tier-one" partners ahead of the Beijing Games - Adidas, British Airways, BP, BT, EDF Energy, Lloyds TSB and Nortel.