‘Human skills ... of the highest order’ Probst to be chair IOC press commission NGBs create ‘Trio to Rio’ package Sponsors focusing ads on Paralympians Surprises realign endorsement market USOC to pick 2024 bid city by year end Three more deals lined up for Rio Sochi Games leave a complex legacy Bach energizes IOC membership IOC reprices TOP deals at $200M
Upcoming Conferences and Events
SBJ/Feb. 24-March 2, 2014/Olympics
Sochi Games leave a complex legacy
Published February 24, 2014, Page 1
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.
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.
“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.
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.
“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.
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.”
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.
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?
“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.”