2012 is a year of heavy activity in the world of international sports with both a potentially iconic Olympic Games and a strong array of other events and competitions. These events and their related issues are likely to impact future Olympic bids – both summer and winter. The following update covers the full range of Olympic and related sport activity.
2012 Summer Olympic Games – London
Since these games were awarded to London by the IOC in 2005 in a surprise victory by London over Paris, the overall international attitude was one of concern about the ability of one of the world’s largest cities to conduct a superior games within a dramatically and constantly increasing expense budget and increasing security concerns. As time has passed, some of the anticipated increased expenses did materialize but the local organizing committee (LONDOC) has managed, despite unexpected larger than expected security costs, to both control key expenses and address the security issues. These increased expenses have been offset by better than expected sponsor revenue and a robust early and continuing strong ticket revenue market, despite some early ticket marketing concerns. As a result, the Games, scheduled for July 27-August 12, are expected to be successful with the real potential to be labeled a “great” games. London will be the first city to host three Olympics (previously 1908 and 1948) and the level of interest and support throughout the United Kingdom has exceeded expectations. While not likely to be obvious to Games attendees, there remain a limited number of post-Games facility usage issues but the public attention to these has diminished over time and workable solutions are anticipated. One continuing area of concern that would be visible to Games attendees is the ongoing contentious dialogue with the full range of transportation unions, several of which, with membership of more than 20,000, have promised to strike during the games if not given a 500 pound bonus prior to the games. As will other cities interested in hosting future Games, our region will have a controlled presence in London – both to be visible as well as to continue to observe broader Olympic Games issues.
2014 Winter Olympic Games – Sochi, Russia
Preparation continues for these games, scheduled for February 2014, with major international sports federations and national Olympic Committee needs continuing to be addressed but generally outside significant public scrutiny. In Sochi’s bid period, extensive governmental commitments were made and continue to be on the table despite major economic changes within Russia and Eastern Europe. These games are being treated as a major “coming out” party to showcase the “new” Russia and to reaffirm their past superpower status. These games, as are many games and despite an IOC expressed intention to avoid such public utterances, have been and are being used by Russian officials as a major infrastructure update opportunity for the region to the point of such upgrades being excessive when compared to realistic post-games needs. Preparation for these games, whose funding is being covered at a high level for infrastructure needs, is still an issue with long distances currently planned for access to mountain events. These games are unlikely to be remembered as positively as local officials would like.
2016 Summer Olympic Games – Rio de Janiero
With the challenge (and opportunity) of also hosting the 2014 Soccer World Cup with their associated infrastructure updates overlapping along wit, unfortunately, a delayed opportunity to promote the Olympic Games and their sponsors throughout Brazil and South America, Rio has moved forward with some delays related to local decision making and unknown post games usage issues. The dual event opportunity is of great timing and financial advantage to the 2016 Olympics as airport and region-wide infrastructure improvements will be accelerated to meet 2014 needs and deadlines and will be done using non-Olympic budgets. The 2014 World Cup will be an extraordinary opportunity to identify and resolve a broad range of possible logistics issues. The hosting of the 2014 Cup will however delay many revenue opportunities whose implementation must be delayed until early 2015. Several large international sponsors have expressed concern that they must delay their Brazil-based Olympic branding opportunities, diminishing their value. From a facility standpoint, despite Rio’s hosting of the 2007 Pan American Games, there are significant holes in the venue plan. In an area that will receive significant international media attention, The Rio organizing committee has selected a site and a design firm for the first world-class golf course in Brazil. 2016 will see the introduction of golf to the Olympic program for the first time in the modern games. Creating powerful media stories has been the primary strategy for Rio deflecting the more realistic and daunting issues actually facing the Games.
2018 Winter Olympic Games
With three games prior to this 2018 event, these Games have not penetrated the public or media consciousness to any extent and their leaders are generally not speaking publicly or being seen. With extensive government funding and realistic commitments for whatever might be needed, the challenges for these games differ widely from what other bid and host cities face. There are significant infrastructure improvements being made (high speed rail, airports, thousands of hotel rooms, etc.) without the long term challenge of projecting sufficient post-games business to justify the expense; although the Pyeongchang leaders are making such projections. Demonstrating the high level of national support, the Korean National Assembly has voted and continues to vote a range of Olympic laws protecting the organizing committee’s marketing and licensing rights. This action is unique to date and will likely set an example for future games and may, at some level, be included in IOC bid requests. Further, the organizing committee is assembling a world-wide team of experts to help plan and execute the games. This is a bit early and history has shown that starting too early may primarily result in more levels and iterations of planning than is needed but 2018 games leaders want to have multiple levels of assurance as they approach the world stage.
2020 Summer Olympic Games Bids
These are the next unallocated games and interest is growing as the 2012 Summer Games approach. Over the past decade a dozen or more cities and countries floated possible bids but only six cities submitted formal bids by the 2011 deadline. Of these six cities, Rome dropped out of the competition early this year, commenting that their national economy would be too much of a challenge for their games preparation. There was speculation that other contending cities would follow although the only visible result was the public announcement by two of the remaining cities (Madrid and Tokyo) that they were going to dramatically reduce their bidding budgets. On May 23, 2012, the IOC met in Quebec City and voted to reduce the field of candidates to three finalists including: Istanbul, Madrid and Tokyo. The cities eliminated (Doha, Qatar and Baku, Azerbijan) were viewed as not ready for hosting the games and, despite their plans to spend many millions of dollars on their bids and even more on the Games. Historically, the IOC has wanted to reduce the field to no more than three finalists, even taking two separate votes to do so on occasion. The final decision for 2020 will be made in the fall of 2013 in Buenos Aires and the interim campaign is expected to be very competitive, particularly with the economic challenges facing Madrid, Spain and to some extent, Tokyo.
Future 2022 Bid Effort
On May 24, 2012, the IOC and the USOC announced publicly the conclusion of their long term negotiations on sponsorship and television revenue distribution. Prior to this agreement, the USOC received 12.75% of worldwide TV rights (as the NBC payments are a major percentage of the total) and 20% of worldwide sponsor payments. The IOC has claimed that the USOC was keeping an excessive percentage and claimed that this was a topic of great interest around the world and was problematic for future USA Olympic bids. With this agreement, the USOC will still receive the 12.75% and 20% shares up to current levels but will only receive 7% of increased television revenue above the current base and 10% of increased sponsorship above current levels. It is accepted that now that this possible games-hosting blockage is eliminated, US bids can go forward, whether for a 2022 Winter Games bid (favored by many) or potentially, a 2024 Summer Games bid. A decision on short term direction is expected shortly. With respect to possible US candidate cities for the first possible games (a 2022 Winter Games), in addition to our local efforts, bids are being considered for Denver and nearby Colorado ski resorts, a potential new bid from Salt Lake City (whose local and regional support outside of the University Of Utah is lukewarm, at best) and, on many lists but extremely unlikely, Bozeman, Montana. The Bozeman mention demonstrates why many cities float a potential bid; it’s a way to get media attention with minimum effort. Within the US, there are a number of cities that have either expressed their interest or who have have been mentioned by others for 2024 without any sense of their level of interest. Summer games candidates have been selected in the past following a long and revenue-consuming process and the USOC has indicated they want to avoid this extended process however it may decide.
2012 International Sport Accord
Held in Quebec City May 21-25, this 1900 attendee meeting has become the most significant international sport meeting held annually, attracting federations, Olympic committees, event owners, sponsors and the full range of interested parties. Its significance is demonstrated by the decision of major sports organizations to not only attend in multiple numbers but to also schedule major meetings and announcements at Sport Accord to attract the broadest and highest level of attendees.
RTWGC Chief Executive Officer Jon Killoran, Vice Chairman Hawley MacLean and advisor Jack Kelly all attended Sport Accord on behalf of the Coalition. Also in attendance was Anne Warner Cribbs, CEO of the Bay Area Sports Organizing Committee. This was the case in 2012 as the 2020 Olympic Games finalists and the IOC/USOC accord were announced in media and public briefings held at Sport Accord allowing for significant on-site debate and consideration following the announcements. Our future bid effort was well represented with past and emerging relationships confirmed and enhanced. The 2013 Sport Accord meeting is scheduled for St. Petersburg, Russia.
