The much-announced million-dollar profit from the World Ski Championships in Trondheim is now being challenged by a million-dollar bill from Trøndelag police district. The police themselves cover a large part of the costs of the event, but have calculated the expenses for the World Ski Championships to be between NOK 12 and 13 million. The bill came as a surprise to the organiser, the company Ski-VM Trondheim 2025 AS headed by Åge Skinstad, who had not budgeted for police expenses. In June, Skinstad submitted an application to the Ministry of Justice and Emergency Preparedness to have the costs of police services covered “based on the assessments and plans Trøndelag police district has made for the event.” On Tuesday this week, the answer came from the ministry. It rejects the application for financial support. – It is a form of disappointment, says WC boss Åge Skinstad to news. – But we have a very good cooperation with the police here in Trondheim. What we are looking for is to have a predictable sum, which is then not too high. – It will be very difficult Skinstad says the WC has already spent NOK 17 million on security inside the arena in Granåsen and at the Medal Plaza at Trondheim Torg. The costs of policing come on top of that. – We must know this in advance. This does not only apply to us, it applies to all future organizers in Norway and. Without it being predictable, it will be very difficult, he says. ENJOY YOURSELF: WC manager Åge Skinstad was served premium waffles during an inspection at Trondheim Torg, where the medal ceremonies will be held. Photo: Anders Werner Øfsti / news When the World Ski Championships were held in Oslo in 2011, the organizer had to cover part of the police bill himself. The same applied to the organizer of the Cycling WC in Bergen. – Why haven’t you budgeted for larger expenses for security in the first place? – We think we have taken that into account based on what we know from previous events. We have a very good relationship with the chief of police and the police here in Trondheim, and still hope to find a good solution to this here. Refusal main rule for private actors Skinstad says he does not know who determines how big the bill from the police may end up being. – Those uncertainties, I have a great understanding of them. But then I think it is the authorities’ responsibility to cover it, he says. The Ministry of Justice writes in an e-mail that, as of today, they do not have any arrangements under the ministry that can be used for the type of measures requested. CYCLING CHAOS: The organizer of the Cycling WC in Bergen in 2017 received a bill from the police for 13.4 million, which they were unable to pay. The organizing company went bankrupt. Here, Danish Martin Toft Madsen in action. Photo: Cornelius Poppe / NTB “As a general rule, private organizers do not get the costs of police services covered”, the ministry writes to news. “The ministry is keen to treat cases equally, and Ski-VM Trondheim 2025 AS therefore does not receive support from the ministry to cover these costs,” the email states. Earnings from the devaluation of the krone In the original budget, the WC company had planned for a profit of 22 million from the event. That was before the bill from the police arrived. At the same time, the World Cup organizer profits very well from the fact that the Norwegian krone is weak. INSPECTION: Last week, the Ski WC 2025 was able to inform the FIS managers of how far they have come in the preparations 127 days before the championship starts. Photo: Anders Werner Øfsti / news A large proportion of the income for the organizer is a grant from the International Ski and Snowboard Federation (FIS). This money is paid out in Swiss francs. A strong franc basically means increased payouts of many millions of Norwegian kroner for the World Ski Championships. In addition, the organizer took action last summer to ensure a minimum exchange rate should the krone strengthen (see fact box). This means that the WC is guaranteed to be at least 20 million more from the FIS subsidies than what the organizer budgeted for. This is how the WC secured currency The subsidies for the Ski WC from FIS are paid out in several installments. The first payment came on 15 December 2020. The last one comes 45 days after the World Cup has ended. A total of 13.3 million Swiss francs are paid to the Skiing WC in grants from the FIS. Last summer, the Ski WC entered into an agreement on currency hedging of the grants. The agreement ensures VM a lowest exchange rate of 11.25, so that when partial payments from FIS take place, the company accounts for the payment at the highest of the day’s exchange rate or 11.25. In the original budget that the WC organizer made for the event, the subsidies were recalculated at a rate of 9.5. The total payments from FIS in Norwegian kroner thus amount to NOK 126.7 million in the budget. If exchange rate 11.25 is used as the basis for the remaining payments, the payments will amount to approximately NOK 149 million in total. That is NOK 22 million above the budgeted amount. If today’s exchange rate of 12.5 is used as the basis for the remaining payments, the total amount comes to NOK 163 million. In that case, it will result in a currency gain of NOK 37 million for the WC company. But Åge Skinstad does not want to be a part of the currency gain contributing to any more profit for the WC: – We have secured the currency and got some more money out because of it. But it has been lost to the general rise in prices to a very large extent. – We also have expenses in foreign currency. A budgeted surplus is not money that we have. We actually have to sell over 200,000 tickets to reach the budgeted profit. So to start spending money you don’t have is a rather scary exercise, he says. I don’t think krone strengthening is likely. The WC organizer will receive a total of 13.3 million Swiss francs from FIS in the period 2020–2025. The entire FIS grant has not yet been paid out. The largest payments from FIS will only come after the WC has ended. Last summer, VM entered into an agreement which ensures the company a lowest exchange rate of 11.25 on the remaining payments. Finansavisen has also mentioned the Ski WC’s currency gain. The total gain for the Ski WC could be even greater if the current rate of 12.5 holds until the spring. Currency strategist Dane Cekov at Sparebank1 Markets says it is difficult to forecast currency. – But it is probably not very likely that the Swiss franc will strengthen massively against the Norwegian kroner. It is not one hundred percent unlikely, but it is not the most likely outcome we envision, he says. FOLLOWING THE CURRENCY MARKET: Currency strategist Dane Cekov at Sparebank1 Markets says currency hedging can be a good idea. Photo: William Jobling / news Precisely because of the fluctuations in the currency market, it may be wise for companies to take out hedging contracts, says Cekov. – Here it seems that you have secured a relatively favorable course. But now we have a conclusion, the krone exchange rate has weakened against the Swiss franc. The krone exchange rate was so strong that one Swiss franc cost NOK 9 in 2021. Today one Swiss franc costs NOK 12.60. So the krone exchange rate has weakened by around 40 per cent during these three years against the Swiss franc, says Cekov. – So if you have received income in Swiss francs, you have benefited greatly from the development in the krone exchange rate, he says. Published 23.10.2024, at 18.33
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