SBJ/Feb. 24-March 2, 2014/Olympics

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  • Sochi Games leave a complex legacy

    A collective sense of dread gripped the Olympic industry ahead of the Sochi Games. Concerns mounted about security, protests and incomplete hotels.

    But after the Olympic flame was lit and the Games began, a gradual realization set in: Russia was delivering one of the most operationally sound and unique Olympics in recent years.

    Once the flame was lit, some of Sochi’s negatives melted away.
    Photo by: GETTY IMAGES
    The yin and yang of what was anticipated and what was reality reflects how these Games will be remembered for many.

    SBJ Podcast:
    From Sochi: Olympics writer Tripp Mickle assesses the Sochi Games with Terrence Burns, managing director of Teneo, who helped Sochi secure the 2014 Winter Olympics.

    Sochi 2014 was an Olympics of contrasts. The weather was spring-like, but the competition was for winter sports. The security was everywhere, but it was discreet. The first Olympic Park was massive, but it also was compact enough to see multiple events in one afternoon. The resorts in Krasnaya Polyana were still under construction, but the views of the surrounding mountains were stunning. Hotels remained a work in progress for some, but were well-run for others. President Vladimir Putin showed the world a new Russia, but many in the West only saw a repressive, totalitarian regime.

    “This is the most challenging Games we’ve ever had to plan and I can’t say it was easy, but it’s turned out remarkably well,” said Jan Katzoff of GMR Marketing, which worked with four global Olympic sponsors in Sochi.

    “It’s been one of the smoothest Games we’ve ever done.”

    Former International Olympic Committee marketing director Michael Payne said, “It will be a case study in expectation management. People came here with concerns and they didn’t materialize. From an operational perspective or the key things that matter, it’s as good as it gets.”

    The contrasts between expectation and reality underscore a larger challenge about issuing a verdict on the 2014 Olympics.

    With Sochi, the International Olympic Committee took the Games to a city that had to be built from scratch. The Russians spent $51 billion doing it. The result was an amazing 18 days, but what happens when everyone leaves? Will Russians and other tourists visit and prove the investment worthwhile? Or will Sochi fall off the international map, damaging the Olympic brand and leaving Russia saddled with debt it can’t repay?

    “Sochi proved you can build an Olympics from scratch,” USOC Chief Executive Officer Scott Blackmun said. “Whether or not it’s prudent to do, I’ll leave to the IOC. Is it the right financial model for the future? I don’t know.”

    No one does, and no one can, at least not yet. For now, they can only reflect on the 18 days of the Sochi Games.

    OPERATIONAL EXCELLENCE

    Sochi 2014 organizers earned high praise for the concept they conceived and designed of two competition clusters, one along the coast and one in the mountains. They developed the first Olympic Park for a Winter Games, and spectators appreciated being able to walk to multiple events in a single afternoon. The mountain venues were just an hour away by train, making it possible to see snow and arena events in the same day.

    Sponsors benefited from a design that put their showcase pavilions right at the spectator entrance to the park. Samsung one day had 20,000 visitors to its showcase, which emphasized its new Galaxy Note 3, while Coca-Cola averaged 2,000 visitors a day.

    Olympic Park, with its cluster of competition venues, was a boon for spectators, sponsors and athletes.
    Photo by: GETTY IMAGES
    Athletes, in particular, enjoyed the fact that their lodging was inside the security perimeter and less than a mile from the venues. The Finnish hockey team biked to a game last week, and NHL stars Sidney Crosby and Evgeni Malkin strolled across the Olympic Park.

    “This is the most competition-friendly Olympics we’ve been to,” NHL Deputy Commissioner Bill Daly said. “Players can be out and seen if they want, or tucked away if they don’t.”

    The concept also helped Russia’s transportation and security plans. There were only two competition zones, which simplified the bus, train and private cars ferrying media, fans and IOC members to and from events.

    As one hospitality organizer said, bus drivers only had to leave the park, turn right at Adler and drive 45 minutes to the mountains. Traffic was minimal. And spectator trains that said they would depart at 6:40 pulled into the station a few minutes beforehand and pulled out right on time.

    The security operation took what many Olympic experts considered a risk when it decided to require spectators to register their passport information and scan “spectator passes” each time they entered the park. In Beijing, a similar system had created hourlong lines at the security gate before the opening ceremony. But in Sochi, security managed to process each guest in 2 1/2 minutes the first day and 30 seconds later in the week.

    The checks were thorough. Each spectator was patted down. Hands ran beneath belt loops, and fingers poked inside the ankles of boots. It bordered on invasive at times, but everyone cooperated because they knew security was important after the nearby Volgograd bombings in the weeks leading up to the Games.

    WHAT PEOPLE ARE SAYING

    “The Russians did a fantastic job of taking an unbelievably ambitious plan and executing it almost to exactly how they described it when we first came here five years ago.”
    — Gary Zenkel, NBC Olympics president


    “The concerns [before Sochi 2014] had nothing do with the Games. It was geopolitical, without knowing this country, without knowing the future of this country, the desire of this country  [to] open up. It was a dated perspective. These Games were remarkable. They will remain a very warm Games.
    “What I will remember is the warmth of the people, the efficiency, and discovering a country I didn’t know. I will leave Monday with the fondest of memories.”
    — Jean-Claude Killy, IOC member and head of the coordination commission for Sochi 2014


    “The journey was epic, but it’s fantastic. It’s a beautiful Olympic experience.”
    — Emmanuel Seuge, Coca-Cola vice president of global alliances and ventures


    “For those of us that attended, they’re going to remember how incredible the infrastructure is. They’ve pulled something off here that frankly I’m not sure anyone expected.”
    — Chris Overholt,
    Canadian Olympic Committee CEO


    “Hats off to the Russian government and Sochi organizing committee for transforming the region around Sochi. A legacy well beyond sports venues has been built with the Olympic Games as the catalyst.
    “This was my 18th Olympic Games, which I have attended in a variety of roles. That has allowed me to witness and experience many Games operations and see the growth of the Games firsthand. The lead-up to the Games was similar to many in recent years. Many questions about infrastructure readiness, cost, security, societal issues and others. …
    “The organizing committee did a tremendous job implementing every aspect of the Games with few flaws. As it should, sport and athletic achievement became the focal point for a global audience who witnessed another historic Games.”
    — Mike Plant, U.S. Speedskating chairman and Atlanta Braves vice president


    “Hotels. That was the No. 1 challenge. It was 24 hours of effort to get them ready.”
    — Jan Katzoff, GMR Marketing head of global sports and entertainment


    “One of the story lines is that Russia overcame a lot of adversity and outperformed everybody’s expectations by a mile. The volunteers have been unbelievable. Happy, supportive, service-oriented, smiling and genuinely caring about our experience. That’s something special. That’s something I felt in Sydney [in 2000] and not something I felt everywhere.”
    — Scott Blackmun,
    U.S. Olympic Committee CEO


    “Dmitry [Chernyshenko, head of Sochi 2014] and the team have delivered an excellent Games. Getting here, the lead-up to it was difficult. But the venues are beautiful and the volunteers are great. Operationally, these have been a great Games. But the troubles getting to this, construction and everything else, were difficult.”
    — Scott McCune, Coca-Cola vice president, global partnerships and experiential marketing


    “How many times can you go to Whistler or Vail or Courchevel or Kitzbuhel? People travel a lot these days. I am sure [the hotel issues at the start of the Games] will have an impact on whether some people will come back here or not. It did cause a little damage. But they were focused on building the venues. Building the train.
    “The goal was to survive in this tough environment and deliver great service.”
    — Sead Dizdarevic, Jet Set Sports founder


    “Russia’s our fastest-growing market in the world. What happened during the Games is not as important as what happened the last two or three years. Because of the Olympics, we developed joint activities with Aeroflot, supermarket chains and Sberbank. The Games were a catalyst for us to bring all these things together.”
    — Ricardo Fort, Visa global head of marketing


    “The people couldn’t have been more friendly. Everyone has a smile. Everyone is trying to be helpful. They take you to your seats.”
    — Ann Wool, Ketchum Sports & Entertainment partner and managing director


    “I’m a lot more bullish on the legacy potential than I was coming in. The ski resorts and quality is amazing. The facilities here for conventions and activities are excellent. Will it change Russians going to Courchevel? No. But there are middle-class Russians who want their own ski resort.”
    — Michael Payne,
    former director of IOC marketing


    — Compiled by Tripp Mickle
    Guns were few and far between on security officials, and while the Russian army had sniper nests on the mountains and army tents stationed along the train line, none of it was intrusive. Most people credited the venue plan with making that possible.

    “It’s truly working to the advantage of us and the athletes just how perfectly constructed this plan was to confine the venues to these two distinct locations connected by really efficient transportation,” NBC Olympics President Gary Zenkel said. “That’s made everyone’s life easy.”

    PROBLEMS PERSISTED

    Sochi was far from perfect. In Vancouver, spectators walked out of venues and walked through town back to their hotels, stopping in bars or mingling on the street with local residents and fans. But the decision to build the Olympic Park in an undeveloped area some 45 minutes away from the city of Sochi gave the 2014 Games an isolated and sterile feel at times.

    The effort to build 22,000 new hotel rooms also turned out to be an issue. Two sponsor hotels in the mountains were never finished, and a third required a week of effort by Jet Set Sports’ staff, which did everything from install phone lines to buy items for the mini-bars, to open on time.

    Some of the new hotels remained an issue throughout the Games. Residents at the Bridge, where Procter & Gamble, McDonald’s, the NHL Players’ Association and others stayed, didn’t have shower curtains for their rooms. Holes opened in some bathroom ceilings. As of last week, the hotel still hadn’t installed phones in the rooms.

    Others were fortunate. Omega, Visa and NBC stayed at the Radisson Blu, which was considered one of the nicest hotels built for the Olympics.

    “We knew it was going to be what it is,” said Ricardo Fort, Visa’s head of global partnership marketing. “For us the hotel was great. The operation is working well. All the things in the park, in the mountains, worked well. Clients are happy. But I understand other sponsors have had a different experience.”

    There also was plenty of quirkiness about the Sochi Games. Shops that were shuttered one day became a jeans store the next; a gondola was installed just to ferry spectators to events; an amusement park sat empty because it wasn’t completed in time to get permits for riders; and a mall in Krasnaya Polyana had a third floor filled with sand, palm trees and a beach volleyball court. But there was something charming and impressive about all of it.

    “They did it their way, as any country does,” said Terrence Burns, a managing partner with Teneo Holdings and a consultant on Sochi’s bid to host the Games. “Think about building a city in seven years. There are only two countries that can do that — Russia and China. They said we want the Games, we’ll deliver it, and they did it.”

    WEIGHING THE COST

    The overall legacy of these Games won’t be known for years for either Russia or the International Olympic Committee. So many things were built so fast for so much money — $51 billion in all — that it’s impossible to judge after a mere 18 days if it was worth it. Answering that question will take five, 10, maybe even 15 or more years.

    Will people fill the 22,000 hotel rooms built after the Olympics end? Will domestic and international tourists visit the three new ski resorts? Will anyone ride the $8 billion train or drive the $9 billion highway between Adler on the coast and Krasnaya Polyana in the mountains?

    There’s some optimism that Russian officials have taken the necessary measures to keep Sochi on the map globally. It’s secured a seven-year contract for Formula One races in the Olympic Park. Fisht Stadium, which hosted the opening ceremony, will be the site of World Cup games in 2018.

    Domestically, interest in visiting the area is mixed. Alexander Popich, a St. Petersburg resident working in the private airline industry, said he would prefer skiing in Europe. Sergey Godov, a 21-year-old resident of Yekaterinburg, said he and friends usually snowboard in Italy but would probably work Sochi into their rotation.

    “I will tell my friends it’s pretty OK here and advise them to come,” Godov said.

    Putin was more involved in the Sochi Games than any head of state had ever been involved in an Olympic operation. He wanted to not just show the world a different Russia (“Great, New, Open!”) but also restore confidence to the Russian people, who are still struggling with their identity in a post-Soviet world, that they can host a world-class event and win at sports.

    Putin failed for now on showing the West a different Russia. The anti-gay propaganda legislation passed by Russia’s parliament a year before the Games and the detention of protesters such as punk rock group Pussy Riot only underscored the differences between his authoritarian regime and Western democracies. But he seemed to succeed in bolstering the confidence of Russians.

    “We have not too many big national ideas like the Games,” said Vlas Larkin, managing partner at RSCM Sport, a Russian sports marketing agency. “It’s very good because it gives everyone some target. People coming here see it all, and see it’s a real good thing and it can influence for ages. There was just a field here [before]. Now, it’s so many things.”

    Vladimir Lednev, a professor at Russia’s Olympic University in Moscow, agreed, adding, “We showed the world we can organize this major event. Only a great country can host a great Games.”

    When asked about whether the $51 billion spent was worth it, Russian after Russian pointed at the venues and the train and the highway and noted how much infrastructure existed now in a place where there was nothing. They were aware of allegations of graft but treated that as the cost of doing business in Russia.

    “It’s much better to build it with high prices and huge expenses than it go somewhere else and not build anything,” Godov said.

    LOOKING AHEAD

    The use of the venues, the hotels, the railways and the highways will go a long way to determining the legacy of Sochi for the IOC, as well.

    The $51 billion price tag associated with Sochi has created a perception worldwide that the Olympics are too costly to be worth hosting. Munich residents rejected a referendum to bid for the 2022 Games, and Oslo residents narrowly voted in favor of bidding.

    One question to be answered: Will ski resorts built for the Games draw tourists?
    Photo by: GETTY IMAGES
    If Sochi becomes a tourist destination and justifies the expense, it could mitigate some of the negativity surrounding the cost. That could encourage cities to bid on the Games in the future, which is integral.

    “Bid cities are like seedlings,” Burns said. “You have to keep focused on that or else you don’t have a forest.”

    Olympic industry vets say one thing appears certain: The IOC will not take the Games to another city that needs to be built from scratch again the way that Sochi was.

    The Sochi Games went great, but building interest in the Olympics in a relatively unknown city is challenging, and undertaking so much construction creates too many opportunities for something to go wrong.

    “This was an Olympic Games built from nothing,” said Scott McCune, Coca-Cola’s vice president, global partnerships and experiential marketing. “I don’t think we’ll ever see that again, and I don’t think this is necessarily the blueprint for the future. This was what Russia needed and they did it.”

    Payne agreed, adding, “The IOC took one helluva risk. It would be hard to dispute that. But it paid off.”

    Print | Tags: Olympics
  • Bach energizes IOC membership

    International Olympic Committee member Jean-Claude Killy stood in the lobby of the Radisson Blu last week and talked enthusiastically about his time in Sochi.

    “We have a new energy,” Killy said.

    The new energy Killy spoke of can be traced to the Feb. 4-7 IOC Session in the days preceding the official opening of the Sochi Games. It was President Thomas Bach’s first as head of the IOC, and it gave members their first exposure to his leadership style.

    New IOC President Thomas Bach
    Photo by: GETTY IMAGES
    Bach encouraged all members, including new ones, to offer their opinions, and he devoted an entire day to discussing “Olympic Agenda 2020,” an effort to make a number of changes to the IOC’s approach to bidding and organizing the Olympics.

    “It’s a different type of person with a different type of leadership,” said Rene Fasel, an IOC member and the head of the International Ice Hockey Federation. “I like it. I was very happy with [former President] Jacques [Rogge’s] approach. I appreciate that Thomas is looking for dialogue and trying

    SBJ Podcast:
    From Sochi: Olympics writer Tripp Mickle has a fun, irreverent and insightful conversation about the Sochi Games with Greg Wyshynski of Yahoo's Puck Daddy blog

    to change things.”

    Change is not a word heard often at the IOC Session. The organization generally embraces the status quo and hasn’t made many major changes over the last decade. But Bach is pushing for it, and he’s encouraging all the members to contribute.

    The changes being considered include allowing two cities or even two countries to jointly host a Summer or Winter Games, creating a more flexible system to add new sports to the Olympics, and launching an Olympic network.

    A series of commissions have been created to evaluate potential changes. The commissions are expected to put forward proposals later this year that will be voted on at an IOC Session in Monte Carlo, Monaco, in early December.

    Members have embraced Bach’s effort to make changes as well as his leadership style. Killy said that Rogge in 2001 was able to come in after the Salt Lake City scandal and create new safeguards to restore credibility and stability to the IOC, which was what the organization needed at the time. Bach is “young, smart, energetic and he knows the business inside out,” which is what the organization needs now, Killy said.

    “We change habits, techniques,” he said. “It’s a leap forward.”

    The differences between Bach and his predecessor extend beyond his leadership style. At an event where IOC sponsor McDonald’s dedicated a playground, Bach spent nearly 20 minutes afterward helping children down the slide and riding a carousel with them. It was the type of thing his more reserved and sometimes shy predecessor never would have done.

    The combination of his new approach, which encourages member contributions, and the success of the Sochi Games, which concerned many before it began, had most IOC members optimistic about the future of the Olympics.

    “The beginning of December will be extraordinary,” said Sergey Bubka, an IOC member from Ukraine. “We will build a road map for the future. You need to listen to people. You need to build steps ahead. We are doing that.”

    Print | Tags: Olympics
  • Three more deals lined up for Rio

    Rio 2016 is on the cusp of announcing three tier-two sponsorships that will boost total sponsorship revenue to two-thirds of its goal of raising $1.3 billion.

    “We should be close to London [which raised $1 billion] two years before the Games,” said Renato Ciuchini, Rio 2016’s chief commercial officer.

    Since joining the staff in 2012, Rio 2016 has added deals with InBev, Cisco, Correos, Sadia (packaged foods) and Batavo (dairy). The organizing committee already had deals with Nissan, Bradesco, Embratel, Nike and others.

    Ciuchini and his team are working on deals with a language services provider, a data storage company and a market research company. He hopes to add an airline sponsor, software company and two apparel companies — one for volunteer outfits and another for opening ceremony attire for the Brazilian national team.

    “We have split tech and divided it because not any one company can do all these products,” Ciuchini said.

    SBJ Podcast:
    From Sochi: Olympics writer Tripp Mickle discusses the atmosphere in Sochi and which sponsors did well on the ground with Ann Wool of Ketchum Sports & Entertainment and Jan Katzoff of GMR Marketing


    Ciuchini also is looking for one more tier-one sponsor. He believes it could be an industrial company, and he’s eyeing the steel and gas industries.

    Though the Brazilian economy has cooled considerably since Rio was awarded the Games in 2009, Ciuchini said that hasn’t dampened sponsorship interest “because the decision is at the board level and it’s a long-term decision.”

    “Emerging market economies are going through a critical moment,” he said, “but my perception is executives believe in emerging economies.”

    Rio 2016 is preparing for potential protests during the 2016 Games, but Ciuchini said he plans to work with sponsors to mitigate the risk that could mean for sponsors. He hopes everyone will work together to highlight how many people the Rio Games will employ and what social responsibility efforts sponsors are undertaking.

    Despite the protests during last year’s FIFA Confederations Cup in Brazil, sponsors are expressing major interest in doing hospitality programs in Rio. That doesn’t surprise Ciuchini.

    “Rio has this combination of being a cool place with cool people and beautiful beaches,” he said. “It’s set in an emerging economy. People want to be there.”

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  • USOC wants to pick 2024 bid city by end of year

    With the Sochi Games behind it, the U.S. Olympic Committee plans to turn its attention to a potential bid for the 2024 Summer Games.

    International Olympic Committee members have encouraged the U.S. to bid, and the USOC is intent on selecting a potential bid city by the end of the year. Candidates include San Francisco, Boston, Los Angeles, New York City, Dallas, Philadelphia and Washington, D.C. IOC members are said to favor a bid from San Francisco, but the USOC hasn’t identified a favorite.

    USOC CEO Scott Blackmun will be meeting mayors.
    Photo by: GETTY IMAGES
    USOC Chief Executive Officer Scott Blackmun said the organization will spend the rest of the year meeting with mayors and city leaders to evaluate the viability of a bid from each city. It hopes to select a city by the third quarter of this year and have its board vote by March 2015 on whether the U.S. will put forward a bid.

    “There’s no matrix for how we’ll choose a city,” Blackmun said. “There’s no scoring system. It’s going to be which city has the most voter appeal, which city can provide the best

    SBJ Podcast:
    From Sochi: Olympics writer Tripp Mickle assesses the Sochi Games with Terrence Burns, managing director of Teneo, who helped Sochi secure the 2014 Winter Olympics.

    experience to athletes, which city can provide the best experience for spectators and which city has the best economic situation to host a Games. We don’t want to take substantial financial risks.”

    The U.S. hasn’t hosted a Summer Olympics since the 1996 Atlanta Games. It last hosted a Winter Olympics in 2002 in Salt Lake City. Bids by New York for the 2012 Games and Chicago for the 2016 Games were rejected by the IOC.

    A bid for the 2024 Summer Games would face stiff competition. Rome and Paris, which would be celebrating the centennial of its second Olympics that year, both plan to bid. Doha, Qatar, and South Africa also have expressed interest.

    Blackmun said that the competition a U.S. bid city faces wouldn’t weigh heavily on the USOC’s decision to put forward a bid.

    “We need to determine whether we can put forth a quality bid that can win,” he said. “If we think we will do that, we will bid irrespective of what other cities are in the process.”

    When it selected Chicago as a bid city for the 2016 Games, the USOC held a domestic bid process and picked the Illinois city over Los Angeles. It plans to forgo that process this time because the cost for bid cities can be more than $10 million.

    “The more formal you make the process, the more difficult you make it for the cities that don’t win,” Blackmun said. “We want to build the Olympic movement in the U.S. We want to designate a partner but not alienate cities as we have in the past.”

    The less formal approach also gives the USOC the flexibility to not put forward a bid if it doesn’t find a city it believes can win. The organization has said that if it doesn’t bid for 2024, it will look at bidding for the 2026 Winter Games. Cities such as Salt Lake, Reno-Tahoe and Denver have expressed interest in those Games. But for now, the focus is on the 2024 Summer Games.

    The USOC has spent the last four years restoring its standing in the international Olympic movement. It reworked its revenue-sharing agreement with the IOC, and Blackmun and USOC Chairman Larry Probst have worked hard to build relationships with IOC members and sports federations.

    The result of their efforts was evident last year when Probst was made an IOC member.

    “The U.S. Olympic Committee under its leadership [has] moved mountains of perception of the USOC in the IOC, and they’ve done that not to bid but to benefit the Olympic movement, and people respect that,” said Terrence Burns, an Olympic bid consultant and marketer who works for Teneo Holdings.

    Some of those efforts were undermined by the Obama administration’s decision not to send a senior member of its leadership to the opening ceremony of the Sochi Games. Instead, it sent a group of openly gay athletes in a political statement, which IOC President Thomas Bach criticized prior to the Sochi Games, saying the Olympics weren’t a place for politics.

    “I don’t think the U.S. political performance the last month will be helping [a bid],” said Michael Payne, the IOC’s former director of marketing. “There’s the potential it might become quite a competitive race.”

    Print | Tags: Olympics
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