Photo: US Olympic Team supporting Boston’s bid for the 2024 Olympic Summer Games (source: US Olympic Team, official Twitter account).
In the past week, people with an interest for major sports events have discussed whether or not the US Olympic Committee (U.S.O.C.) should bid for the 2024 Olympic Summer Games. There is no doubt that a major sports event like the Olympic Games has an impact on a host nation or a host city but whether it is good business or not is another question. That’s why the U.S.O.C. may have found it to be a wide-ranging process to determine if it is Washington D.C., Boston, San Francisco or Los Angeles that has the highest chance of being selected by the I.O.C. However, the selection has been made and Boston came out as the winner.
Recent Olympic Games tell a story about major sports events and astronomic costs. Therefore, the time has come for thoughts of innovative development and attitudes of bring the Games ‘back to basics’. When major sports governing bodies like the I.O.C. prioritizes to talk about values like transparency and integrity, I believe it is time to ‘walk the talk’. New I.O.C. President Thomas Bach ought to see the upcoming Olympic Games as chance to stand out, to activate his Agenda 2020 (see here) and to employ reinvigorating re-branding for the Olympic Games and hence the I.O.C. In other words, sustainability, integrity and transparency matter. For sustainability purposes, the I.O.C. should show an interest in promoting an event that does not include a cost development, which is out of control with reality. The latter was seen in the Olympic Games in Beijing (2008) and Sochi (2014). Often, there is no economic sustainability concerning these major events if you hold the direct costs against the direct revenues. Massive investments in venues, accommodation and infrastructure are not covered by the direct revenues, which are derived from sources like media deals, corporate sponsorships and subsidies from the I.O.C. For that reason, the host nation and the host city must carefully consider the host role from a holistic perspective, i.e. including the projected after-use, tourism revenues, branding impact, planned investments in infrastructure that need to happen no matter what and so on.
A mega sports event like this is linked with a considerable tourism turnover and it may also add an enhanced boost to the host nation’s or city’s brand equity but there is no guarantees in terms of the scope of this impact. Therefore, it is advisable to come up with an equation that cautiously integrates and assesses the total costs related to hosting the Olympic Games and that compares this cost level with direct and indirect ROIs, ROOs and ROEs*. Additionally, this calculation should be approached from a time-perspective in the sense that it should carefully study the potential short-term and long-term development given the fact that there are various examples reflecting that hosting sporting mega events may be good or bad business. However, I am convinced that it would be good for the I.O.C to put the essence of sporting competitions in the limelight and to do so by acknowledging that it may be about time to move away from the economic over-spending shown in Russia or China. With that said, I believe that it would be a great benchmark for the US and the U.S. O.C to show the World how this can be done. The US has the sporting landscape, including the know-how and commercial mindset to make this work and to display to a global population that ‘sport should be about sport’ but allow for a sound and sustainable way to integrate commercialization.
Talking about a good experiential starting point, the US manifested its position in modern Olympic history when launching the Olympic Summer Games in Los Angeles (1984). That event formed an interesting benchmark for how to involve the corporate world in lifting a major sports event. I believe that the 2024 Olympic Summer Games may be a chance for the US to move the Olympic Games back to a sound balance between sporting focus and reasonable investments when staging the event. Of course, the city will have to take care of the infrastructure and that will suit the city well. Boston is one of the world’s intellectual capitals and I am sure that the city may have an answer for taking care of this problem area and many others. It would be great to see an event in which the requirements of the I.O.C. is interrelated with Boston’s capability to host the event and to emphasize a sound after-use given its role as an intellectual city with several university and professional sports teams and thus venues. I am aware that the city as of right now may have some missing links (including transportation, hotels etc.) but Boston has the competencies to do it in the RIGHT way and that’s what the I.O.C. needs right now. So my hope is that the city of Boston, the U.S.O.C. and the I.O.C. (if Boston is selected) will collaborate in intellectual ways to make the 2024 Games as sustainable as possible. This also includes a sustainable (main) stadium solution although that is a problem area that takes some consideration in terms of after-use – i.e. integration of events, professional sports teams and educational institutions.
Photo: US Olympic Team’s integration of Boston’s assets (source: US Olympic Team, official Twitter account).
Boston has the capability to drive the hosting role to something good as a center of transformation and innovation economy and with great identification levels for sports. This is also a chance for Boston as a city to prove and symbolize that it stands for something else than Beijing and Sochi and most other major cities in the world and in the US. Boston’s aspiring intellectual influence on many great global and corporate leaders has come to prove its point when measuring whether this competitive edge can be moved into the realms of international sport. It will indeed be interesting to see how Boston (if selected) will implement its idea of a downsized and sustainable sporting event that blends well with the city’s academic scene and in which every venue should be easy to access through means of sustainable transportation. For the city of Boston, this may result in projected improvements of the current infrastructure and that seems wise to mix these investments with the Olympics without having to invest in the Olympic show just for the sake of hosting a major sporting event. I believe that all this adds a good commercial spin for corporate sponsors that have been criticized for not taking a precarious stand on the over-spending and the lack of openness of the Games in Beijing and Sochi. This may help spark a positive re-branding of the Olympic Games – an event that will retain and build on its powerful role in the global media panorama while reviving the hunger of corporate sponsors to be associated with the Olympic Rings through an enhanced position of the Games among the post-modern society’s more political-conscious and enlightened sport consumers and citizens. That is an example for the I.O.C. of showing accountability given its enormous reach and power and implementing strategic CSR to a wider range of vital stakeholder groups.
Whether it will be a good business for Boston requires a multi-dimensional measurement but if the organizing committee can secure corporate support and a sound integrated approach to pre-, during- and post-event phases I think that it will be a relative good calculation. However, feasibility and impact studies show that positive economic impact is hard to obtain (look at the FIFA World Cup in South Africa in 2010 or the Olympic Games in Athens in 2004 as negative examples in this regard). Nevertheless, Boston has a positive DNA to be applied in creating a sustainable event with a great branding impact, a lot of global and community related festivities (including the sense of national and civic pride among Bostonians and Americans), strong tourism turnover and a chance to manifest the city’s position as the most intellectual city in the world. Germany is known for its efficiency and focus on quality and the FIFA World Cup in 2006 was an example of successful staging of a mega event and Boston has some of the same characteristics going for it. Now, it is up to Boston to create a positive legacy for itself if the city is selected as the host city by the I.O.C. At least, downsizing seems like an advisable solution in a time where some cities (e.g. Munich, Krakow and Oslo) have decided not to bid for the Olympic Games due to economic the fear of over-spending and I.O.C.’s appetite for profits and (yet) non-transparency.
* ROI = Return on Investment, ROO = Return on Objectives, ROE = Return on Engagement