beijing olympics - more than medals

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Beijing Olympic -More than Medals


Big sporting events like Beijing Olympics are no longer just about winning medals, national pride and sportsmanship; it is increasingly about leveraging on the commercial aspects of the games that are fast catching up with corporates.

Beijing Olympics, the costliest in the game’s history, had seen China invest a staggering $43 bn in building infrastructure and other facilities for the mega show.

Though sportspersons battle for the glory of gold, silver and bronze, it is no longer just about sports; rather it is about the economics of sports.

Economics of Sports


Economics of Sports

Many look at it as China’s attempt to showcase to the world it’s remarkable ascendance and rise as the new global power.

As the financial Times commented, Olympics have traditionally kept a low-key political event; however, china pulled off diplomatic triumph as top leaders of the world like US president George Bush to the French president Nicolas Sarkozy as well as the Prime minister of Japan and Russia attended the opening ceremony.

Many of the experts believes that big bang sporting events like Olympics have now turned in to money-spinners for the host economy.


It’s all about money

As the needles of clock touched 8:08 p.m. on 080808, Beijing, and thus China, ushered in a new era.

A group of 15,000 performers and 16,000 athletes, representing 200 countries, participated in a glittering opening ceremony of Beijing Olympics.

For the opening ceremony alone, China spent a cool $300 mn. However, by the time when the curtains finally came down on 17 –day mega event, china had spent a hefty $43 bn, much higher than previous two Olympics put together.

Companies like NBC, McDonald’s, GE, Kodak and Coca-Cola have paid an estimated $2000 mn to International Olympic Committee (IOC) for sponsorship which is four times more than the earlier events


It’s all about money

Expert say that gaining market in China make sense, as two-thirds of the Chinese preferred Olympics-sponsored products to non-sponsor’s, a research indicated.

The Olympics budget has inflated the economic activity of China overnight, particularly in the infrastructure sector.

China has invested $35 bn for construction of new roads and subways.

Over $1.8bn worth of investment went in to construction and renovation of venues alone.

The Chinese government invests over $1.5 tn annually in the domestic economy, so the Olympic bill represents 4% of budget annually.


China constructed new terminals at Beijing airport and added 90 new stations to it’s subway with a twofold increase in it’s length.

In all, it’s construction absorbed 3 million tons of steel.

To keep it’s promise of having blue skies for Olympics, it has invested millions of dollar in improving it’s environment – which is surely a blessing in disguise, given the fact that Beijing is notorious for fog caused by pollutants.

China allotted $6.5 bn for Beijing security alone, which used biometric keys (iris scanning and fingerprinting) as security measures.

With 1 million video cameras and anti-terrorism squad of 100,000 members, Beijing was the most protected venue hosting Olympics.

More than Medals


Calling Corporates

Beijing Olympics Games attracted four billion audiences, which has made the Olympics venue favorite spot for corporates to advertise their products to mammoth audience.

NBC alone paid $894 mn for broadcasting rights of summer 2008 Olympics, it also made history in sports television broadcasting by bidding and winning the rights for televising summer and winter 2010 Olympic Games by paying a whopping $2.2 bn.

Dick Ebersol, president of NBC sports, said, “We have fixed out a love affair with the IOC. In August, we got engaged. Now it seemed reasonable to get married and open up a joint checking account”

Paul Golden, Vice-President, Strategic Marketing at Samsung’s American Operations, said, “One of the nice things about the Olympics is that it is one of the few things that the entire globe pays attention to at the same time.”


Calling Corporates

Major corporations like Panasonic and Samsung along with 10 other sponsors have paid IOC $100 mn each in advertisement, marketing.

Coke and GE are going to sponsor Olympic Games till 2020.

GE has already added $700 mn to it’s revenue through Olympic related projects and it is also partnering for 2012 Olympics in London.

Olympic sponsorship has made 35% of total Olympic marketing revenues.


Calling Corporates

To prevent ambush marketing and protect the rights of sponsors in Olyampic venues, non-sponsor’s advertisements had been restricted.

Beijing went ahead and banned outdoor advertisements by non sponsors on buses and city’s airport and also on the accessories of athletes of China by non-sponsors during the Olympic Games.

HDTV had produced and broadcasted the two week Olympic Games for four billion viewers, covering hundreds of thousands of hours.

In US alone, NBC relayed the game for almost 3,600 hours, thrice Athens 1,210 hours relay.


Economic benefit for the host

The game also had a significant boost-up effect on the host nation economy.

According to the Beijing Olympic Economic Research Association (BOERA), the Olympic Games have generated about $2 bn of direct revenue through sponsorship, licensing, advertisements, ticket sales and broadcasting rights for the city of Beijing.

As per the estimates by the by the Beijing Statistics Bureau (BSB), the city’s GDP grew 1.14 %more to 12.3 % to touch $132 bn

A recent study showed that 75% of Chinese felt proud about hosting Olympics , while 85 % perceive that it will increase the value of Chinese brands, such as China Mobile and Lenovo, in international market.


Questions to be answered?

The obvious impact, which is generally overlooked or under publicized is the impact on environment.

As large amounts of raw materials are used, with increasing consumption of water and energy and stress on transportation and sanitation and maintenance, will Olympics be good or bad to Beijing’s economy and it’s smoggy skies?

Will hosting Olympics bear the fruit which was expected while bidding for it?

All these questions can be answered based on how people will embrace it?


It’s Priceless

Being the biggest sporting event a nation can host, events and activities act like an accelerator for host nation redevelopment, which would take a decade or two in ordinary circumstances.

The direct effect will be inward investment and modernization of the host city and the nation in general.

Keeping aside the monetary impacts for a while, which anyway will take years to assess fully, for now, there are enough reasons to cheer for Beijingites as their city had the honor of hosting the biggest sporting event on the earth, which is priceless.


Thank You.

beijing olympics - more than medals

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