NZEvents

“Mega Sports Events and Events”A Cruize in the Economic ImpactsApril 2007 Special for Auckland NZ : 

“Mega Sports Events and Events” A Cruize in the Economic Impacts April 2007 Special for Auckland NZ Troels Troelsen Associate Professor at CBS (Copenhagen Business School) SMAC

Why running for hosting MSE’s /Olympic Games?: 

Trustworthiness for a country and/or city. Experience for everybody ....body! Proving the ability for hosting an event – no matter size Contribution to stakeholders Timing Can you stand up against any head-wind.. Why running for hosting MSE’s /Olympic Games?

The sports and economic definition of a Mega Sports Event. (Do we need them all?): 

The sports and economic definition of a Mega Sports Event. (Do we need them all?) Must involve a considerable number of sports people = athletes, staff, services . And a number of different events or a larger series of qualifications. Attract a crowd of spectators over a period of time. Attract the media and in general to be broadcasted / reported to a larger part of World or a continent. Result in a considerable economic turnover, impact on the city / region / country. Result in a branding effect for the area which can be exchanged into further activities before and after the MSE and as a facilitator of possible change of perception of the city/region. Involve many stakeholders with different goals

An Event = an Action-Bomb: 

An Event = an Action-Bomb Planning of the “bomb” and “the target” The bomb = often different from planning The effects = 1st wave, primary effects and stakeholders Athletes, organizers, volunteers, financing and funding 2nd wave, secondary effects and stakeholders Accommodation industry, transport, per diem spending. Redistribution of money or “new” money. Multiplicators. Recipients different from funding. 3rd wave = Branding effects Tourism effects on the long run, industry and firms, self confidence for a region. Press coverage. 4th wave = Values: Social capital, democratization, health, criminality et al.

Event Economic Effects/ImpactsPre-event & Post-event phases: 

Event Economic Effects/Impacts Pre-event & Post-event phases Economic growth (GDP) and impact Targeted growth in economic relevant sectors Direct and indirect employment created Direct, indirect and induced impacts (“Multipliers Analysis”) Economic-social Net Present Value Touristy flows (“visitors economy”) Olympic legacy (“stadia & infra-structures”) Globalization (“Global branding & exposure”)

2. Somebody must want the MSE. : 

2. Somebody must want the MSE. And from the beginning it is NOT the politicians. (Barbara Casani, London 2012, CPH. Aug. 28, 2006) But who then?

The hosting region : 

The hosting region To improve the brand of the region To change the image of the region To speed up the local economy -

Slide11: 

Personal icons wanting to bring the MSE to the region for personal or branding reasons: CNN in relation to Atlanta 1996 Fiat / Agnelli Family for the Torino 2006 Primo Nebiolo for the Rome-bids. Los Angeles,

The sports and its organizations:: 

The sports and its organizations: For presidents to get seats in the ISGB/ IOC To upgrade sport facilities Increasing the status for the sport To attract additional international events . To achieve an international profile. To involve volunteers and to upgrade personal. To attack sponsors. To develop grass root sports and activities. To host competitions on home soil will benefit the athletes of the region – especially if they are of world class.

The business community: 

The business community Accommodation, travel, construction, consultancy = all benefiting from an MSE Business institutions wanting to show case cutting edge industries and competences. Exports wanting to position themselves by relating to the MSE-story. (research) To make money and a profit (a growing argument: Tour de France, Atlanta, Sailing, ..)

The political parties and politicians in a country / region: 

The political parties and politicians in a country / region International political relations / reputation / refocuse. Regional versus central government issues (Barcelona) Regional rivalry (Sydney versus Melbourne, East-West coast USA)

The public Opinion (who wants to stage at a venue where you are not wanted?) : 

The public Opinion (who wants to stage at a venue where you are not wanted?) Open for spin from pro´s et con´s Its difficult to move the public opinion First opinion extremely important

Slide16: 

Percentage of residents in favour of hosting the event by period

Slide17: 

Do you agree with the project of hosting the Games in Torino and the Alp valleys ?

Slide18: 

Are you proud that Torino won the bidding competition for the 2006 Winter Games ?

Slide19: 

Positive effects of the 2006 Games (surveys before)

% of interviewed people confident that the positive effects of the Games will be long lasting after the Winter OG  (results of the surveys 2002-2006): 

% of interviewed people confident that the positive effects of the Games will be long lasting after the Winter OG (results of the surveys 2002-2006)

Slide21: 

Are you confident that the 2006 Winter Games will be an opportunity for promoting Torino ?

Slide22: 

According to some people, Torino should work to change its traditional image of industrial city into a tourist and cultural city image. Do you agree?

Are you confident that Torino should promote a new cultural and tourist image, changing and overpassing its traditional model (industrial city) ? : 

Are you confident that Torino should promote a new cultural and tourist image, changing and overpassing its traditional model (industrial city) ?

In your opinion, will the tourism arrivals increase in Torino also after the Games ended ? : 

In your opinion, will the tourism arrivals increase in Torino also after the Games ended ?  

Slide25: 

Do you think that Torino will overcome its difficulties (Fiat Company crises…) and develop new opportunities for its future ? (answer: yes)

Slide26: 

SWOT analyses on aspects of hosting a sports event.

The stakeholders wanting the MSE process are important for success: : 

The stakeholders wanting the MSE process are important for success: Montreal 1976 – ? Los Angeles 1984 – the business society Seoul 1988 – the Government Barcelona 1992 – Catalonia/Sararanch Atlanta 1996 - CNN Sydney 2000 – the city-rivalry Athens 2004 – the VIP’s /people Beijing 2008 – the party London 2012 – the LOC and City Counsil

3. The importance of formulating a vision and a mission for a MSE. : 

3. The importance of formulating a vision and a mission for a MSE. Political correct for the time of the decision. What is that?

Slide34: 

  General goals of (Sport) Mega Events (the Olympics show a wide differentiation of cases) Political legitimization and recognition: Seoul summer 1988 (western choice) Political Nationalism, and success in the world arena: Chamonix winter 1924 Catalyst of urban regeneration: Barcelona summer 1992 , Sydney 2000 (some failures: Atlanta summer 1996, Calgary winter 1988, Sapporo winter 1972) Promotion of a district through the increased tourism: Albertville winter 1992 besides Barcelona (summer) the Savoy ski district is a positive case of global-total tourism venue Economic promotion of an area (city marketing): Atlanta summer 1996 Atlanta is a case of success considering the economic balance (Los Angeles 1984 too), but Atlanta is also a failure in other fields (transportation system, recovery of Downtown): but Atlanta and Georgia improved their position in the USA ranking of attractive areas for companies from the other States and abroad, and used the Games in a successfull citymarketing strategy Promotion of a Nation through the fame of a small area: Lillehammer winter 1994 Norway, a nation visited by a small number of tourists, made itself well known through the fame of a small village: Lillehammer case is known as “intermezzo symdrome” because after the Games Lillehammer came back to the previous situation (no critical mass = no development!) Message of reconciliation between cultures: Sydney summer 2000, FIFA WC 2002 Modernization of infrastructures, and governance: Athens 2004 good surprise Modernization, political & symbolic success, legitimization: Bejing 2008

Often 15 years lead time: 

Often 15 years lead time New York appointed to host the S-OG in 2016 (tentative guess). Appointed in 2009 in their second run to host the S-OG Bidding in 2005 in their first run to host the S-OG Turning in their official request to be a bidding city to IOC in 2003 Producing a complete feasibility study and pre-bid from 2001-2003 Having the political discussion and funding of the bidding organization and the funding of the S-OG, if NY might be appointed 1999-2001 Started by a stakeholder sincerely wanting to bring the S-OG to NY in 1998.

Copenhagens vision? (by Troels Troelsen) : 

Copenhagens vision? (by Troels Troelsen) “The story of solidarity from the Nordic Countries”, The sports model, the management style, the stable democracy, the solidarity with the world shown demonstrated by the Nordic Countries. “Freedom is nothing left to do. Sport as a world cure for lifestyle deceases such as obesity, cardio deceases, stress. “Enough is too much”, Sport against poverty ala Bono from U2. Focus on sports as a universal activity, simple living and anti consumerism. The Danish model

5. Timing of applying for a MSE. : 

5. Timing of applying for a MSE. Some logics New and old players (Africa, South America,..) Some political wheeling and dealing (the logics of votes and voting) And ----------------- WDIK

6. Understanding the composition of the decision making ISGB.: 

6. Understanding the composition of the decision making ISGB. What is democracy. Ambassadors Lobbyism Agents

7. Different stages and management teams of organizing the MSE. : 

7. Different stages and management teams of organizing the MSE. First stage – spinning the public opinion and convincing the key players. Second stage – writing the application founded on detailed planning of the MSE. Third stage - the real job, to be ready at time. Forth Stage – the pre and post MSE activities and the supplementing aspects.

Problem Definition: 

Problem Definition The Olympic Games as the World´s most important mega sports event Closely followed by FIFA´s WC. As an economic and social project Make its adequate economic analysis Measure their economic effects/impacts on the hosting regions, states or countries

Long Maturation Process: 

Long Maturation Process Pre-Games phase From the inicial idea to bid until the launching of the Games a period of 10 or more years of preparation and multiple investments occur Post-Games phase From the end of the Games another period of more 5 to 10 years of economic impacts have to be considered

Main Methods of Economic Analysis of the Games: 

Main Methods of Economic Analysis of the Games (1)- Macroeconomic Impacts Studies Input-Output Matrixes & Multipliers Econometric/Computable General Equilibrium (“CGE Framework”) (2)- Cost-Benefit Analysis “Net Present Values & Discounted Cash Flows”

Main Postures of Economic Analysis of the Games: 

Main Postures of Economic Analysis of the Games Ex-ante Studies Based on forecasts and/or scenarios Ex-post Studies Based on real and validated data

Analysis Methods (examples): 

Analysis Methods (examples) Macroeconomic Impacts Studies - Salt Lake City (USA), Lillehammer (Norway), Vancouver (Canada 2010) - Atlanta (USA), Barcelona (Spain), Sydney (Australia) Cost-Benefit Studies - Vancouver (Canada 2010) - London (UK 2012)

What we get from?: 

What we get from?

Main advantages of Cost-Benefit Analysis: 

Main advantages of Cost-Benefit Analysis Gives the socio-economic rentability of the “Games Project” The calculus of its “net present value” Makes possible to compare results obtained with other society´s alternative projects Has real advantages over traditional macroeconomic impacts methodology Has more accounting accuracy Its findings can serve as a comparator for the scrutiny of the host country public policies efficiencies

Costs of Hosting the Games(Source : “A London Olympic Bid for 2012”, House of Commons, 3rd Report 2002/2003) : 

Costs of Hosting the Games (Source : “A London Olympic Bid for 2012”, House of Commons, 3rd Report 2002/2003) N.B. : Aproximate comparisons. Some of the cities include infrastrutures others not. Beijing and Barcelona include urbanization development costs.

Key Economic Benefits and Costs of the Games: 

Key Economic Benefits and Costs of the Games (Source : PricewaterhouseCoopers European Economic Outlook June 2004)

Economic Impact Studies of Past Games: 

Economic Impact Studies of Past Games (Source: PricewaterhouseCoopers European Economic Outlook June 2004)

Impact analysis vs. CBA : 

Impact analysis vs. CBA Appetizers – Olympic Games figures Sydney 2000: Foreign tourism turnover during the OG estimated 430m US DOLLARS (130,000 foreign OG-tourists) - Between 1997-2004 an extra 1.6 mio. foreign visitors spending 3.5bn US DOLLARS in Australia Sydneys Convention/Visitor Bureau hosted 210 events between 1993 (the year they were appointed OG2000 hosts) and 2000. Between 1993-96 = +78% !

Impact analysis vs. CBA : 

Impact analysis vs. CBA Appetizers – Olympic Games figures Sydney 2000: Brand Australia promoted heavily (~reduced brand knowledge process by estimated 10 year) Media coverage of Australia 11 times higher than normally (media value 2bn US DOLLARS) 6,7 mio. tickets sold, 30bn TV-viewers 6 months after OG2000 the Australian Government announced that the Games had cost 4.2bn USDOLL

“The Life Cycle of Impacts” : 

“The Life Cycle of Impacts” -11 -9 -7 -3 0 +5 +10 Economic Impacts Time Horizon of the Games Project

A case story: A new aim for Sport In England: 

A case story: A new aim for Sport In England To change the culture of sport and physical activity in England in order to increase participation across all social groups leading to improvements in health and other social and economic benefits and providing the basis for progression into higher levels of performance

Slide55: 

Liam Donaldson - Chief Medical Officer At least five a week DH 2004 Active and Successful Sporting Nation Active – for health, economic, social benefits “The evidence is compelling…. Cost of physical inactivity in England estimated at £8.2 billion per year Obesity costs an additional £2.5 billion per year”

Slide56: 

A Market Segmentation Approach