Suddenly, are major sporting events ‘on the nose’?

Well, in fact hasn’t this been the case for some years?  as the costs associated with hosting Olympic Games, World Cups and similar events have escalated to higher and higher levels.

And in fact, is it just about the costs and the related screwed priorities in national spending – what about the health, education, housing, transport and wider public services? – or is it indeed as much to do with perceptions among populations that there is another dimension of politics and governance at work, one that they play no part in and in which they have no influence.

There is no doubt that the spending on major events brings with it major improvements and renewal of cities and public services and spaces. These projects are not universally welcomed and certainly often do not deliver what was promised. But they provide lift, spirit, pride and global prominence on a level that few other opportunities can do.  Legacy is another question. There are still too many who see legacy as ‘what is left over’ rather than ‘what is planned as legacy’…a bit like ‘if it wears pants it walks’.

Beijing spent more than $40 billion dollars on and around the Olympic Games – and substantially renewed a chunk of the city, installed new potable water systems, environmental, food safety and emergency medical systems management. Transport management and security was rebuilt. Some venues are being used more than others and the Watercube, for example, has been converted to an aquatic theme park.  That money spent, significant as a figure, was a drop in the China bucket, over several years.

And so goes the argument for London, Rio, and Sochi – where a budget of some $50 billion is current, for Winter Olympics!  Prudency and tighter reins are more evident around Asian, Pan American Games (although the 2007 Games in Rio went well over budget) and Commonwealth Games. Correspondingly, these events don’t generate the global attention, including major television coverage, that we see with summer Olympic Games, nor the same commercial interest.

Football World Cups also bring promises and costs. Just as with the recent Euro Cup competition, the host countries take the opportunity to build new stadiums and renew transport infrastructure.  In countries where football is core to culture, there are many benefits, including political, but when those new stadiums result in ticket pricing way above the local means, operational costs that can’t be met, facilities that can’t be maintained, the outcomes quickly blurr into mediocrity and popular irrelevance.

Brazil has built several new football stadiums and renewed others, much done ‘to the tune’ of FIFA. The country’s budget is $9 billion with more on infrastructure. By the way, it is FIFA who makes the motza from the World Cup competitions.

Russia has similar plans for 2018 with a $20 billion (recently raised) budget. Qatar has very ambitious plans for 2022. In each case, the overall costs are small in national income terms, especially when taken over some years. But the new installations are highly visible while many attached promises plus perceived promises of local benefits ranging across jobs, housing and improved socio-economic conditions, often prove elusive.

It is generally the poorer and less advantaged that stand to gain, and ultimately perceive little progress – rather than dislocation and change. It seems the newly emerged middle classes (can we use that terminology?) have the numbers and voice to air grievances. The governing groups wring their hands, respond with new policies as an attempt to forestall further public anger but really don’t seem to stop and listen and address the angst of those many disenfranchised people. Governments make their commitments to the IOC, FIFA et al in what seem to be contractual undertakings rather than partnerships. In truth, each side has quite different motivations and ultimate objectives but that is not a reason for a greater partnership approach, one that values and delivers according to the circumstances. And shares some of the risks. The duration of the bidding-through-to-closing ceremony time frame itself sees many changes of fortune and direction in politics and economics. The legacy period is longer – the British government has clearly stated that the full legacy of London 2012 will not be determined for as much as 20 years.

What now in Brazil with much dissent? Russia? Qatar? Will Istanbul’s 2020 Olympics bid lose its appeal following the recent disturbances there? The ability to fund mega events has been in part a driver for selecting host cities and countries. The IOC and FIFA look to measure who can deliver, for them. Some of those nations are autocratic and decisions are made irrespective of public sentiment. In the context of wider political and social unrest around the world, sporting events host governments will need to become much more cognisant, sensitive to and responsive to the concerns of their people. Even if this means turning tables on the IOC, FIFA and others; and at times being seen to do so.

Eric Winton

Director, New Millennium Business

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