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The Olympic Movement and Economics

Positive vs Negative
by

Linzi Woodhouse

on 12 January 2014

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Transcript of The Olympic Movement and Economics

What is The Olympic Movement?
The Critical Evaluation of the Changing Historical Roles in the Olympic Games Movement from an Economical Point of View
A Lasting Legacy
Continued Development
In Conclusion..
Impacts of the Games
Welcome to the Olympics!
Economical Development of the Games
Building a Financially Reliable Future
[1] During the time period of 1981-1996 the development of the Games began to focus more on increasing audience sizes. If more people starting getting involved and watching the Games it would help to bring in more money resulting in higher profits based on increasing sales in broadcasting globally (Borley, 2013)
A legacy is something which has long term effects on a host city after the games are over.
Hello and welcome to our presentation by Linzi Woodhouse and Nicola Stanley
The purpose of this short presentation is to critically evaluate the historical development of the Olympic Games movement.
We intend to focus on the economic side of the Games, in relation to the role it has played in aiding development and whether it has helped create any lasting impacts or legacies.
In order to see how the Olympic Movement has developed, we must first start at the beginning...
[2] The first mention of leaving a legacy was during the Melbourne games 1956 bidding document.


From an economical standpoint, leaving a legacy after the games is crucial in order to generate a continuing return on investments (Borley, 2013).


[1] The Montreal games held in 1976, left a lasting legacy which was the revision of funding for games in the future, focusing more on the private sector to generate income

[4] The games left Montreal with a debt of over £600million (Gratton and Taylor, 2000)

In 2002 the IOC formally introduced the notion of a lasting legacy.

Leaving a positive legacy behind grew as a necessity after poor financial planning left cities with huge amounts of deficit which affected the whole country.


Challenges
[2] Although the IOC enforce leaving a legacy behind, they do not help cities once the games are over.

It is important to plan ahead into what kind of legacy you want to leave, before the games have even started (Borley, 2013).

The Games also creates short term impacts on host cities.
These can be in the form of:
Developments
Profits
Housing
Local Reaction
Improper planning before the Games can lead to negative economical impacts on cities post Games.
Olympism was first coined by Pierre de Coubertin 1894
[1] The Olympic Games Movement is governed by the IOC and is made up of individuals and organizations inspired by the values of Olympism.
Anyone belonging to the Olympic Movement requires recognition by the IOC and must contribute to the goal of creating a better and more peaceful world through education and sport in accordance with the values of Olympism (The Olympic Museum, 2007).
The IOC are responsible for the development of future Games and chose which cities will become hosts.

The IOC receive no public funding


[2]Increased media involvement has meant that the IOC has been able to develop itself as an organization (Olympic.org, 2013).
[1] The Olympic Museum, (2007). The Olympic Movement. 2nd Ed. [online] Available from: www.olympic.org/Documents/Reports/EN/en_report_670.pdf
[2] Olumpic.org, (2013). The Olympic Movement. [online] Available from: http://www.olympic.org/content/the-ioc/governance/introductionold/
• Values of Olympism – Education, Equal Opportunities, Culture, Development
• How the Games are organized, developed, marketed, advertised and recruit over the 4 years from the closing ceremony to the next opening ceremony
What is Olympism?
Games in ancient Greece where funded by wealthy families/individuals usually all from one source

Funds were hard to come by in the ancient and Athens Games was funded by wealthy Greeks again in 1896 due to state bankruptcy
[4] Early Games were not financially stable and many did not leave a lasting economic legacy on the host city (Borley, 2013)

Not much change occurred in financing the Games until after the 1976 Montreal Games where public funds were relied upon entirely for producing the Games [1], However these Games where known for being the worst example of the Olympic budgetary excess.
LA Olympics are known for their financial success and the role in 'restoring the summer olympics as the acme of desire for place promoters and urban regenerates. [2]
The 1984 LA Games was one of the most financially successful, almost entirely funded by private sector money as citizens voted against using public sector money. [1]
LA managed to produce an immediate profit of US$ 223million after the completion of the Games. [3]
The Games did not however manage to leave a substantial economic benefit for the city of LA because of their lack of development throughout the city.
[3] The 1992 Barcelona Games showed that a city could successfully transform itself through a positive Olympic legacy plan and continue to benefit after the Games were over.
They focused on development by:
Improving transport systems
Upgrading telecommunication facilities
Constructing new urban living centers and housing
Integrating everything into their existing metropolitan areas

With the right financial planning and execution it can be possible to produce a total overhaul of a city and create a lasting legacy for generations all from the benefits of the Games (Borley, 2013).
Barcelona encouraged more cities to bid for the rights to host the Olympics, basing their financial plans on the success of Barcelona's.
[2] London managed to create a socio economical legacy by generating a whole new living district.

London benefits from this massively through the introduction of new infrastructure including a school, local businesses and surrounding real and artificial greenery (Borley, 2013).
London
[1] PricewaterhouseCoopers European Economic Outlook, (2004) The Economic Impact of the Olympic Games. [online] Available from: http://www.pages.drexel.edu/~rosenl/sports%20Folder/Economic%20Impact%20of%20Olympics%20PWC.pdf
[2] Gold, J & Gold, M (2007) Olympic Cities: City Agendas, Planning, and the World's Games, 1896 - 2016 (Planning, History and Environment Series). Routledge, Oxon.
[2] The London Games 2012 had over 3.6 billion viewers, in the stadiums and watching at home (Olympic.org, 2013).
[1] Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
[2] Olympic.org, (2013). International Olympic Committee Marketing Report London 2012. [online]. Available from:http://www.olympic.org/Documents/IOC_Marketing/London_2012/LR_IOC_MarketingReport_medium_res1.pdf
[1] The Athens 2004 Games were filled with problems before it had even begun and costs began to cripple the entire project.

Athens hoped to use the Olympics as a means to fulfil some of the cities goals, including the development of public transport and a cleanup operation of pollution (LondonAssembly, 2007).
(Girginov and Parry, 2005)
[2]It is unknown exactly how much money was spent in total to produce the Athens Olympics in 2004

Many of the buildings used throughout the competition still remain unused and uncared for in the present day (Smith, 2012).
[1] LondonAssembly, (2007). A Lasting Legacy for London? Assessing the Legacy of the Olympic Games and Paralympic Games. [online] Available from: http://www.uel.ac.uk/londoneast/research/documents/lasting-legacy.pdf
[2] Smith, H, (2012). Athens 2004 Olympics: What Happened After the Athletes Went Home? The Guardian. [online] Available from: http://www.theguardian.com/sport/2012/may/09/athens-2004-olympics-athletes-home
London 2012 created its own Cultural Olympiad
[1] The budget for the both the Olympics and Paralympics was estimated at £9.29billion but was later revised to £8.77billion (BBC.co.uk, 2013)
An entirely new Olympic Park was created in Stratford, utilizing the abandoned and unused space.
The goal for the Games was to inspire a generation through sport
[3] Beijing's 'Water Cube' area, used during the swimming and diving events in 2008 has undergone a $51 million makeover into a water park located next door to the 'Birds Nest' Olympic stadium (Farrar, 2010).

[1] PricewaterhouseCoopers European Economic Outlook, (2004) The Economic Impact of the Olympic Games. [online] Available from: http://www.pages.drexel.edu/~rosenl/sports%20Folder/Economic%20Impact%20of%20Olympics%20PWC.pdf
The financial and economic considerations are close to the heart of the Olympic phenomenon.

Do host cities only want to host the games because of the possible economic and financial benefits?

The funding behind the broadcasting rights and sponsorships has transformed the Games over the last century from a mainly publicly funded event to the more commercially orientated phenomenon of today.

There are 4 steps which need to
be assessed when evaluating the
impacts of the Olympics. These are:
Identifying expenditure items
Measuring expenditure
Multiplier effect
Estimation of jobs
Financing the Olympic Movement
As the games where beginning to enter
the 21st century, the financial state began
to change to mixed financial streams however there are but a few Olympics that have managed to balance this.
During the ancient Games, the Olympics only commenced amongst the upper class. Due to no official funding, it was cut off from the poor. This meant only Greece's elite few could participate. They battled for bragging rights and supremacy over their peers and rivals.



The relationship between the Olympic movement and the commercial forces extends back to the first staging of the modern Olympics back in 1896 [1], However it has not always been like this.

[1] Gold, J & Gold, M (2007). Olympic Cities: City Agendas, Planning, and the World's Games, 1896 - 2016 (Planning, History and Environment Series). Routledge, Oxon.
Economic Sustainability of the Olympic Movement
The IOC adapted the Agenda 21 into a version that could work in terms of planning sustainability throughout the Olympic Games. This provides a theoretical and practical guide for members of the committee to implement sustainable practices [1].

Being socially-economically sustainable can bring benefits to the host cities both locally and nationally.
[1] Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
If there were no framework to follow, the host cities of the Olympics may decide to not implement any sustainable guidelines into the Games as it may be cheaper.
Positive impacts of social-economic sustainability through the Olympic Games can be seen through the regeneration of areas in social-economic decline, such as the Barcelona Games in 1992 as well as London 2012.


The IOC where the main source of funding for the Games, however this changed with the growth of the Games and the opportunity to broadcast them over the media, as well as sponsorship of the Olympics.
Girginov, V and Parry, J. (2005)
The Olympic Games Explained: A Student Guide to the Evolution of the Modern Olympic Games.
Oxon: Routledge.
[3] Olympic.org, (2013) Los Angeles 1984. [online] Available from: http://www.olympic.org/los-angeles-1984-summer-olympics
[4] Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
[3] Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
London Olympic Games 2012
[1] BBC.co.uk, (2013) London 2012: Olympics and Paralympics £528million Under Budget. [online] Available from: http://www.bbc.co.uk/sport/0/olympics/20041426
Beijing 2008
[2] Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
[3] Farrar, L. (2010) Beijing's Water Cube now has Slides, Rides, a Wave Pool and Spa.
CNN Travel.
[online] Available from: http://travel.cnn.com/explorations/play/beijings-watercube-water-park-now-open-040746
[4] Gratton, C and Taylor, P. (2000) The Economics of Sport and Recreation. London: Spon.
Borley, A. (2013) Economic Development of the Games. The Cultural Olympiad. LEI3007. University of Northampton. 28th. October.
While plans can be created before the Olympics no one will be able to predict exactly what will happen to host cities once the Games are over

It is difficult to predict whether a host city will favor well economically from hosting the Games
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