The question of how the World Cup and Olympics can become profitable for everyone involved was at the center of a panel on assessing the value of large global sporting events yesterday at the '14 CSE Sports Marketing Symposium. Both panelists -- Holy Cross economics professor Victor Matheson and Teneo Sport Managing Dir Terrence Burns -- agreed that changes must come to the current model, which heaps massive expenditures on host cities. Oslo’s decision to drop its bid for the '22 Olympics, leaving only Beijing and Almaty, Kazakhstan, as potential hosts, is seen as a key indicator of the failures of the current system.
**On the current system:
Matheson: “Think of the great deal that FIFA and the IOC have here. They put on an event that someone else does all the planning, pays for putting on the events. Someone else builds all of the facilities so the event can be hosted and all of the athletes come in and participate for free. Yet the IOC then gets to sell Olympic rights for $7 billion to NBC. FIFA over the last four years prior to this World Cup sold their TV rights for $4 billion worldwide. What a great business this is that they’re in.”
**Burns: “Pick cities now. Get them prepared ten years from now, so it’s not an embarrassment, it’s not a joke, it’s not an insane cost. That’s called brand management, and they have to look at bid city selection as the first step in Olympic brand management. You’re seeing what’s happened when you ignore it.
**On the '22 bid:
Matheson: “The biggest cost associated with this is not necessarily the running of Games, the operating costs. It’s not necessarily what you need to build. Remember, the biggest cost is, in order to host the Games, you have to win the bid.”
Burns: “This is a wakeup call for the movement. It has to be. It’s really unsustainable. More rationality [is needed] in the process. There should be built-in functionality long term in the bid process. Tell cities you can’t bid on the Olympic Games unless you’ve held ten world championships over the last ten years. You can’t bid on the Games unless you have 60 percent of your infrastructure built and in use already.”
**On proposals to rotate the Olympics between a small group of cities or keep them in Athens:
Burns: “It would kill the Olympic brand… The Olympics aren’t about sport. Sport is the path that takes you to these values. We talked to people all over the world who aren’t interested in sport, who never watch sport, except for the 17 days of the Olympics on television. Why is that? It’s because it’s about pageantry. It’s about us at the very basic level. ... (bid cities) get to reinterpret, they get to resurrect the Olympic brand with their own cultural pixie dust.”
**On the ideal host city:
Matheson: “The most successful Games was the Los Angeles Games. Almost no new infrastructure was used… If you don’t spend billions of dollars building new facilities and, of course, Los Angeles has great airports, a lot of roads and hotels and all this. When you don’t spend that kind of money, you can have a highly successful games, and this is an Olympics that made a huge profit for the organizers, cost almost no investment on the part of the city and, of course, was widely watched.”
