In the 1942 film Casablanca, cynical Rick Blaine, played by Humphrey Bogart, quipped “Here’s looking at you, kid.” Well, London here’s lookin’ at you – and congratulations!
Just prior to the Games, the Olympics brand was assessed as the second most valuable brand in the world at $US45 billion, according to a study by consultants Brand Finance. The Olympics brand has increased in value by 87 per cent since the Beijing games, largely off the back of a rise in broadcast rights deals. Apple is the only brand ahead of it, worth $US70 billion. Both maintain this value by going after anyone they perceive to be using their trademarks.
Michael Wesley former executive director of the Lowy Institute for International Policy noted recently that “From their modern inception in 1896, the Games have stood as a symbol of an idealised world, of human fraternity, of competition without bloodshed, of excellence without subjugation. The International Olympic Committee regularly calls for ceasefires for the duration of the Games. It is a place where ”nationalism lite” can flourish without the dangerous downsides.” More than that, somehow the Olympics take on an inspirational role, one that pride and maybe an element of nationalism build on and arguably invigorate a city and a nation.
This has been the case with London in 2012. London’s theme this year is ”Inspire a Generation”. It’s hard not to read into this theme a defiant tone – Britain may be down, but we’ll come back. Others considered it a great Games – “but we’re still broke”.
It went so well…
For all the media castigations preceding the event – was it ever different? – the London Olympics went pretty much like a dream. The years of detailed planning, in excess some may have suggested, all paid off. No foul-ups, no scandals. The security personnel shortages were well-covered by military and others; traffic didn’t snarl; and the photographed empty seats transformed into full houses for every event. London is now bathed in the warmth of affection and great memories. The atmosphere became incredibly affable. The 70,000 or so volunteers, the ‘Games Makers’, led in the identity and hospitality stakes and were the lubricant that made unforgettable the experiences of so many. Britain’s approach to civil liberties was on the line and prevailed. Can you imagine a situation there akin to the Russian court sentencing members of Pussy Riot, a punk band, to two years in jail for an act of protest?
Sure, the budget roughly trebled to £9.3 billion, including security which cost more than £1 billion ($1.56 billion), but from the moment the new stadium came alive, all that was forgotten. Well, for the time being, until the matter of who will take the stadium as ‘home’ and thus the final post-games configurations are determined. Sure, some of the bid-time propositions about participation in sport, education and others….were they promises?…have not been achieved and will come back yet in debate and head-scratching but the visual reality of Olympic Park, now Queen Elizabeth Olympic Park, and a new East London is dramatic, bold and in part an exciting social experiment. A determined focus on sustainability permeated every facet of the Games. The celebration of the ceremonies lifted the audience and seemingly the whole UK, otherwise mired in its economic malaise. The Games have injected a new spirit into London, the UK and indeed the Olympic movement.
There are some who have noted in some aspects of the London Games a resemblance to those of Sydney. Probably no accident. There were a number of facets of the London event that during planning adopted or reverted to the excellent experience of Sydney. Sure, 12 years later much has changed, new technologies introduced and there has been a wealth of new experience during that time, but some core knowledge has endured and still forms the platform for subsequent Games organisers to build on.
The knowhow of Games planning of reliable costs estimating and management and of early commitments to an achievable set of relevant legacies is at a premium – and Australians are more steeped in this knowledge than most. The lessons and ‘template’ of London has much value in strategy and business propositions for forthcoming events globally.
Did all of London embrace the Games?
Not fully. The reports of West End and much of London’s retail business feeling cold and left out suggests that parts of London really did not engage or benefit. Yet that is to be expected in such a large city. By comparison Sydney was able to engage more fully. Early figures from LOCOG suggested that nearly one in five motorists had abandoned the roads.
Culture Secretary, Jeremy Hunt, countered serious criticisms that tourism-related business in London was down substantially, with “It was quieter in the first week of the Olympics, but picked up a lot in the second week. West End businesses did well – theatre bookings up 25 per cent on a year ago according to Andrew Lloyd Webber, restaurant bookings up 20 per cent according to Visa.” – and that travel on the Tube was at a record. Bath Tourism Plus described the Olympics period as “quite difficult” for the city, with a drop of up to one-fifth in visitors. Subsequently, Mr Hunt unveiled a £10 million plan to increase inbound tourism by one-third to 40 million by 2020, including a tripling of tourism from China.
Consider how you might capture some of that business growth – in the UK or China or in Australia.
The five boroughs…
And what of the five boroughs around the Olympics area? They are now on the map and included in London in ways they never imagined, with some quibbles that fewer of their residents secured work in the lead-up to the Games, wondering about the facilities they thought may be delivered and querying whether the focus will now dissipate. But in reality, these previously troublesome parts of London are part of a massive transformation that will yield results over the next 20 years. The government saw the stalled development at Canary Wharf created by slow delivery of public transport and was well-ahead with new infrastructure into and through east London. Already parts of east London are experiencing property price increases towards levels equal to more salubrious parts of the city. A new tech city, ‘Silicon Roundabout’ as it has been dubbed, is providing jobs and contributing to a new identity for the area. Tech City is now attracting strong UK government support. Millennium Dome is now said to be the busiest music venue in the world. The further expansion of the athletes’ village development, to be called East Village so capably delivered by Lend Lease along with the adjacent Westfield Stratford City and Newham city will bring totally new populations.
Watch out for further design, urban infrastructure and place development opportunities.
Temporary venues do work…
London has taken a step further the ‘science’ of temporary venues and facilities. Sydney set a professional template for this design transformation. The Paris bid for the 2012 Olympics proposed many temporary venues across that city. The philosophy was well-adopted in London.
The basketball venue, a skinned structure was designed to be relocated after the Games – and there is a suggestion it could be sold to Rio for the 2016 Games. The Zaha Hadid designed aquatic (please do that very British pronunciation with a definitive ‘quack’) centre will be fully revealed in about 12 months after the temporary seating is and external structure is removed. The Olympic Stadium, designed to take 80,000 for the Games was to be rescaled to a permanent sports venue of 25,000 seats, however, these plans are on hold pending a conclusive use for the venue – and it may be that a good proportion of the ‘removable’ seats are retained in a new configuration. The ‘plastic wrap’ provided by Dow will be recycled into shelter products for children’s and community charities in Uganda and Brazil. Venues such as the equestrian at Greenwich and the beach volleyball at Horseguards Parade presented extremely well with specially designed overlay. The sand at Horseguards Parade, from Surrey, will be transported locally to six sports venues in the London region, to be used to create new volleyball courts. The hockey venue was built as temporary. It will be scaled down to a 3,000 seat arena and relocated north of the Olympic Park to Eton Manor where it will become part of a base for international events.
Overall, 257,000 of the total 745,000 seats will be removed.
The 7,000 seat Copper Box stadium, home to handball and pentathlon events, and goalball in the Paralympics, which cost £43m, will be the only indoor arena to be retained after the Games.
In the meantime, we will see the transformation of select venues from Olympics to Paralympics mode, itself a big task.
Overlay concept, design and management embracing temporary facilities will increase in importance and direct value to event organisers. Build your knowledge around this and / or link your primary services to this wagon to deliver wider, more integrated solutions that make life easier for the organisers.
The Village and catering…
Village accommodation was, it seems, well received. The Games-time apartments do not have kitchens. Meals were served in the 24-hour, 5,000-seat food court, serving 50,000 meals per day. The area is colour-coded into different zones so that athletes can find their teammates during busy mealtimes. Food hygiene and surveillance had high priority. The village also has a cinema, games room, gym, music recording studio and high street with post office, bank and general store. Most athletes share twin rooms – it is up to the delegations to decide how athletes are paired.UPS transported 750,000 pieces of furniture for Melbourne’s Ramler Group which was contracted to design and supply.
The athletes’ accommodation in Stratford, Weymouth and Royal Holloway College was catered by Aramark . The food contract for the northern area of the park was let to Amadeus, a division of the NEC group, which runs the National Exhibition Centre in Birmingham. Olympic Park South was catered by Sodhexo.
Business opportunities will grow in this area of Games delivery. Innovation and clever appreciation of preferences and priorities as consumers of the athletes, their sports federations and the IOC is part of ensuring success of the Games via a more than happy group of athletes.
The security operation, led by the police but supported by the military and emergency services, combined everything from surface-to-air missiles to airport-style scanners and naval patrols. The vast majority of police were unarmed. After G4S, security provider, dropped the ball, troops were brought in and their presence was, if anything a boon to London. There is value in a well-trained cadre with authority that brings with it an air of confidence and control. Outside the park, policing was more apparent, with uniformed, armed officers, private security officials and teams of plain-clothes armed police monitoring the ebb and flow of tourists and spectators.
The UK’s sporting success…
Britain committed to achieve competitive success in the sports of the Games and several years ago initiated sports development and training programs for elite athletes. Public money under the banner of the National Lottery was driven into sports. Major sports received substantial funding: Rowing – £27,287,600; Cycling – £26,032,000; Athletics -£25,148,000; Swimming – £25,144,600; Sailing – £22,942,700. The UK athletes performed tremendously and in the process their own sports heroes have become enthroned…and rightly too. Incidentally, with an eye (or ear) to AOC’s John Coates’ recent comments, the UK government announced on the final weekend of the Games that UK Sport, who distribute funding to Olympic and Paralympic sports, will receive £125m per year up until the Rio Games of 2016. Previously that cash had been guaranteed only until 2014.
Not only but also…Brits on the march
The UK government is now intent on taking British games and events expertise to Brazil, in particular for the next Olympics in Rio in 2016. To take another line from Rick Blaine, “Where I’m going, you can’t follow.” They have learned from the Australia’s success in the international sporting events marketplace and the post-Sydney Olympics and Melbourne Commonwealth Games experience. With really clever and innovative specialists and moderate government support, Australians have established a formidable international reputation. The British recognise that such enterprise needs concerted and top level support to succeed and are committing substantial resources to get there.
They are actively promoting to Brazil their planning, design and engineering capabilities across a variety of infrastructure projects and plan to strongly high-light their creative industry. Watch also for the Brits’ promotion of their proven security surveillance and electronic technologies after discrete, well-executed operations ahead of and during the Games. With a number of major sporting events cued for the UK in coming years, there will be much opportunity to further raise quality and standards of event planning and delivery.
Take the lead in Games business!
So the games and events planning challenge is changing, becoming more demanding and competitive. The substantial business input by Aussies in London is well-recognised in the global events industry and this provides a solid base for accessing the string of UK and international events on the calendar over coming years. Australians need to become even more smart, tougher and develop more clout. That may mean integrating or collaborating to widen your scope of business, to increase the depth and/or to gain a local beach-head for market access. These are strategic issues that need serious attention.
Two more Casablanca lines…
A good amount of core intellectual property has travelled from Sydney via Athens and Beijing to London, with a good number of outstanding Australian games planning specialists involved, for some years in many instances. Several hundred Australians in event, media, creative, and production management have been working on the games. There really is a true Aussie embrace and connection in the success of these London Olympic Games. This is a big story – more on another occasion.
Aussies have a terrific reputation for top class delivery in all facets of Games / events business. Take time to review how you will move forward over the coming phase of international events, bolster your strategy and look at gaining more business clout.
Ceremonies to write home about…
The opening and closing ceremonies were from two worlds. Simon Schama wrote in the Financial Times, “It felt as if the Games had suddenly been programmed by England’s version of the Chamber of Commerce, which decided to take advantage of this final moment in the international spotlight to produce one long and kinetic ad for the country’s pop culture.” Both productions were geared to television. It seems the full story within the spectacular opening ceremony was meaningful mainly to the Brits, with commentators needed to explain its vignettes. It generated all sorts of analyses and reviews of the British psyche, its past glories and fading currency. The closing ceremony was a musical and tech celebration probably as good as we’ll ever see. Truly memorable.
Sponsor protection, marketing controls – imagine if this wasn’t a free market!
Much has been said about sponsors and the policing undertaken by LOCOG and the IOC. Probably overkilled it. Rule 40 was quoted so often but it didn’t stop some interesting instances of grey-ambush. For example, did you see all those gold-trimmed shoes, product of Nike rather than sponsor Adidas? Was there too much sponsorship and marketing of calorie-clad products? Rule 40 was the subject of an orchestrated campaign by dozens of US athletes during the Olympics, their identical, timed tweet reading: “I am honoured to be an Olympian, but #WeDemandChange2012.”
So whatever the logo and rules, we find that brand is indeed as much or more to do with perceptions. Whatever, Coke and McDonalds did well. Visa was the only form of payment accepted (just as well toilets were free) and ended the Games as only form of payment for the Olympics memorabilia auction that has already been held. Procter and Gamble were happy enough to adopt an extra positioning for the Paralympics. Much was made of Twitter and Facebook, new ideas and new apps with some excellent outcomes for some sponsors.
More importantly for Australian companies working on the Games, is the 12 year limitation on publicising for marketing purposes including marketing their contracted delivery performances. Very odious restrictive practices at work, methinks. Should the UK government’s negotiations, for the benefit of their own companies, not reach a satisfactory conclusion, who will have the balls and deep pockets to take legal action? The precedent this condition would establish has far reaching effects. I expect that a soft accommodation will be reached but that may not go to the point of a retrospective adjustment to contract conditions.
And talking about rules, what about the beach volleyball ‘cover up’, wear more than a bikini, protest?
Broadcast gold for some…
Television viewers records were set. NBC reckoned they had some 220 million US viewers. NBCUniversal presented 5,535 hours of coverage across its TV and online channels. NBC paid $1.2 million for the broadcast rights and with ratings above forecast expects to breakeven after anticipating a $200 million loss. During the early days of the Games, Twitter carried many complaints about NBC’s live streaming and about advert breaks. In the UK, almost 52 million people – 90% of the UK population – watched the Olympics for at least 15 minutes, according to the BBC. 27 million and 26 million watched the opening and closing ceremonies, respectively. The BBC ran 22 live channels of Games coverage. Canada’s broadcast consortium, Bell Media and Rogers Communications, announced they had lost money on the Games broadcasts after paying $63 million for the 2012 rights (and $90 million for the 2010 rights). In Australia, Foxtel reckoned they had some 600,000 per night across their 8 channels. Channel 9 seemed to simply deliver banal commentary and much of the sport that would push viewers to Foxtel. Channel 9’s live coverage of the closing ceremony drew about 1 million viewers.
For the IOC, Vancouver 2010 and London 2012 generated global broadcast revenue of $3.9 billion, up from $2.6 billion for the previous round of Winter and Summer Games.
The Olympic Games provides a platform for new technology infrastructure that is highly scalable and with the array of new delivery demands, can enable rapidly produced and customised content.
Social media had a field day in new environment. Companies such as GE, Citi(corp) and Procter and Gamble generated impressive (their estimates) results from new Facebook campaigns. Twitter also flourished. In the weeks leading up to the London games, there were more Olympics-themed tweets posted in a single day than during the entire duration of the Beijing games. Users posted 9.66 million tweets about the Olympics during this year’s opening ceremony, compared to just 500,000 during the opening ceremony for the 2010 Olympics in Vancouver. Usain Bolt’s 100m win generated 80,000 tweets per minute (ah! for how many minutes?). And roughly 150 million tweets related to the games were published during the 16 days of the Games.
At the beginning of the Olympics, the top followed athletes were Lebron James (17.4 million fans) and Kobe Bryant (13.6 million fans), both U.S. Olympic basketball players.
YouTube streamed the IOC’s feed of London 2012 in 65 nations and provided streaming services for NBC in the United States. YouTube registered more than 231 million streams in total.
As noted elsewhere and in earlier editions of ‘Back on the Block’, this is an evolving area into which even the IOC has taken a position – probably to forestall commercial intervention – and one that will become a battleground of sorts between commercial interests, sponsors and the IOC/organising committees as the technology options and the drive for real monetisation grow.
A lot of space to seize with new ideas, targeting sponsors and organisers in ways that provide measures of control, expansion of brand and loyalty and new revenue streams.
And the photo media?
Imagine for a moment the enormous changes brought about by new technology since Sydney 2000, the first games at which digital technology was used. The types of sports photos being taken are radically different, the quantum of photos of any one performance is immense. For photographer, the need is for location, location and the speediest tech platform to deliver. Remote, robotic cameras in the roofs of major Olympic venues at London increased the number of photos and angles of events with, for example, Sports Illustrating ‘processing’ through about 10,000 cycling images to choose two photos for publication.
Who paid what for tickets?
SeatGeek’s Will Flaherty noted that face value tickets to the Opening Ceremony ranged between $31.57 at the low end and $3,157 for top tier, “Category AA” tickets. The average resale price for an Opening Ceremony ticket was $2,550. The tickets tracked by SeatGeek sold for a 73 percent over face value.
The average ticket prices for the most popular Olympic sports were:
- Swimming - the most expensive of all athletic events, going on the secondary market for an average of $713.80, a 242 percent premium over their average face value of $208.64
- Track and Field - aside from the Opening Ceremonies, track and field tickets generally had the highest face values to begin with (with average cost at $344.88). Track and Field tickets fetched $569 on average, with prime Gold Medal sessions going for closer to $1,000.
- Men’s Basketball - the average premium over face value for a basketball ticket on the secondary market is 148 percent, the third highest of any Olympic event. Tickets originally sold for an average of $167.92. There were high premiums to watch USA Basketball in action, even during preliminary rounds.
- Tennis - of all the Olympic events SeatGeek tracked, Tennis had the highest average premium over face value at an average of 260 percent. Tickets for matches at Wimbledon’s All England Lawn Tennis and Croquet Club sold for an average of $379.12 on secondary markets, up $273.76 from their average face value of $105.
With thanks to John Clark at Forbes.
Will there be a major international sporting event where ticketing is not drawn into a political bunfight? Maybe ultimately we will see an integration of ticketing, accreditation and other facets of operations management.
So now let’s turn to Rio…
A short comment on Rio is appropriate. That spectacular city has a lot to do in 4 years, in an economic environment that has benefitted via China’s demand for commodities but is now facing difficulties. Programs to develop the Olympic Park, venues, public transport, hotels and a number of schemes that involve moving established, albeit favela-living, communities are much behind schedule. Brazil has a lot of catching up to do as it strives to present a first world visage and operating system, for the FIFA Football World Cup in 2014 as well as for the Rio 2016 Olympics. Their earlier toe in the water will be World Youth Day in 2013 – perhaps most will be achieved and forgiven in the name of the Church. For the Olympics, Brazil’s tourism ministry expects almost 400,000 foreign tourists, in addition to hundreds of thousands of Brazilians who themselves will add to the crush on airports, hotels, roads and other infrastructure.
Meanwhile, costs for Olympic projects are soaring, as the investment boom and Brazil’s high taxes and labour costs, known locally as the “Brazil Cost”, inflate the price of everything from construction cranes to beachside coconuts. There are worries that the cost of the games could exceed initial estimates of about $14 billion (29 billion reais), an amount not dissimilar to the final London budget. Of course, beach volleyball on a Rio beach will trump Horseguards Parade! The Brazil government is directing more funds towards sport, in preparation for a far better medal count in 2016 than they achieved in London.
This will be a great ride and one you need to saddle up for now. The Rio organisers will expand their activities, be under pressure to show they are delivering and unlikely to find easy or proficient solutions locally, so creating the opportunity for Australians to team up with relevant and appropriate Brazilian companies and target selected Rio 2016 needs.
The Games brought outstanding performances and for those as well as the sheer enjoyment, London will be associated with Phelps, Bolt, Farah. The Games were a good example of fair sport, notwithstanding a number of doping cases that were discovered. Indeed, anti-doping technologies and systems have again been much improved yet there is always an attempt to better those. The media has given us plenty to remember and chew on. Here as in the UK, the US and most other countries, the media had its local bias.
44% of athletes were women, a new peak. London celebrated all its “kick-ass” women – I’m sure many would have also found their way to Selfridges for a terrific spending spree. The very first modern Olympic Games organised in 1896 at Athens prohibited women from competing. That restriction was lifted in the Paris 1900 Olympic Games.
Loved it all…even had a ‘maccas’, in Sydney!
LOCOG, London, to Boris J for his panache (will he become PM? and lead a new London bid for the Olympics?) and to the Brits.
Simon Barnes at The Times, acknowledging Britain’s early jingo-ism at the results of their athletes wrote that Bolt showed “It’s not just about us. It’s about everybody else as well.”
Paul Hayward, Chief Sports Writer at The Telegraph (UK) wrote, “If there is a single word to describe the quality at the heart of London 2012 it may be “soul.” The Games had soul.”
Thanks guys! Now for the Paralympics…yay!
Eric can help you move your business focus and activities into Brazil and indeed into other major events markets where important large-scale events are planned. New Millennium Business packages a strategic and practical approach for events-connected companies to grow and widen their scope, in Australia and globally.
Contact Eric at firstname.lastname@example.org
Earlier versions of this article appeared in SportBizInsider’s newsletter on 17 August 2012 – see www.sportbizinsider.com.au – and the New Millennium Business newsletter “Back on the Block” on 18 August 2012. Subscribe by email request to email@example.com