User:Atama J/Business, Politics and the London 2012 Olympic Games

Business, Politics and the London 2012 Olympic Games Presentation - Here is a link to my presentation, an abstract can be found in the description of the video.

This essay will seek to explore the impact that business and politics have on the Olympic Games, focusing on the London Olympic Games to be held in 2012 as an example of the interaction of Business, Politics and Sport. The question that this essay will endeavour to answer is if National Governments believe that the Olympic Games are vehicles for economic benefit, as for example, the particular aims of the London Olympic is to regenerate East London, support local business and promote England as a whole. It will also look to state the Government's role within the production and running of the Olympics. Although this essay will be based on the 2012 London Olympics, it will also explore a previous Olympic Games, which is, the 2000 Sydney Olympic Games, as this will hope to demonstrate similarities and differences between London 2012 and the Sydney 2000 Olympics. Also, this essay will raise certain political impacts that are evident within the business and politics of the Olympics, for example, threats of protests and boycotts. Through elaborating on each point and producing evidence to support it, this paper will seek to answer the stated question whilst also demonstrating the extent of impact that business and politics have on the Olympic Games.

The Olympics
The Summer Olympic Games is one of the largest international sporting events. To achieve success, or even just to participate at the Olympics is seen as an accomplishment, as it is regarded as the world’s leading sports competition (Britannica Academic Edition, n.d). The Olympic Games is also seen as one of the few cultural forms that bring together the people of the world. It can be seen as a global phenomenon as athletes strive for excellence in their events (Bale, J, Mette, K C, 2004, P4). First and foremost, the Olympics are designed to shine glory upon the host nations; but, governments utilise their position within the Olympics to strive to achieve their national and international goals (Institute of Public Affairs, 2008). Throughout the existence of the Olympic Games business and politics have had an integral role in its processes.

The question this essay seeks to ask is, ‘do national governments use the Olympic Games as a vehicle to benefit and rejuvenate their economy?’ This will be shown in regards to the London 2012 Olympic Games. It will also show the role business and politics have within the London Olympics, in addition to endeavour to illustrate the effects they impose on the Games. Furthermore, it will talk about the commodification of the games and also relate the games on a local level in regards to the Sydney Olympics.

Business, Politics and The Olympics
Business is a massive factor in regards to the Olympics, as the games tend to cost a great deal, although provide little economic benefit. Corporate sponsorships, government grants and sales of television rights are generally the main income for Olympic Committees, although, they are assisted by many other stakeholders of the host nation, such as, the tourism industry (Institute of Public Affairs, 2008). Although the Olympics generally provide little economic benefit, they also create job opportunities for many businesses (London 2012, n.d). Moreover, as the Olympics are seen as an event of high magnitude in relation to sporting events, they can be subject to many commercial forces, this can be seen as part of the growing commercialisation of sport (Wiley Online Library, 2011). This shows how commercialism conflicts with the fundamental principles of Olympism, which moves towards a non-materialistic event (Wiley Online Library, 2011).

Politics have been used within the Olympics as a political tool for many years, largely as a tool for global publicity for its host nation (Political, social and economic aspects of the Olympic Games, n.d). There have been many instances where politics have stolen the show at the Olympic Games, examples of this is the 1956 Melbourne Olympics, as political circumstances of these games were controversial (Institute of Public Affairs, 2008). The Games were held in somewhat of a difficult international atmosphere as the Suez Crisis and Soviet invasion of Hungary took political centre stage (Institute of Public Affairs, 2008). These international dilemmas’ resulted in countries boycotting the games in protest. The president of the Netherlands Olympics committee was quoted as saying ‘How can sports prevail over what has happened in Hungary? How would we like it if our people had been atrociously murdered, and someone said that sports should prevail?’ (Institute of Public Affairs, 2008). This was in response to the IOC president arguing that ‘the Olympic Games are contests between individuals and not between nations’ (Institute of Public Affairs, 2008).

Business, Economics and London 2012
The potential business and economic impact that the Olympics have on a country is very important, as it is can and will affect the entirety of a country. With London 2012 in mind, there is a greater focus on this subject, due to the economic downturn, with pressure being placed on government spending and employment (Sport and Society, n.d). Firstly when London was awarded the London Olympics it was estimated that the games would cost in excess of £4.0bn, which £3.4bn was funded by the public sector and a further £738 million from the private sector (House of Commons Committee of Public Accounts, 2008). Since then the budget has now been increased to upwards of £9.0bn; this includes a £2.7bn contingency fund, also £6.0bn of these monetary funds came directly from the English Government (House of Commons Committee of Public Accounts, 2008).

Although London 2012 is being held during an economic downturn and the budget is considerably high the English Government is being positive about their conduction of the Olympics, their vision in a business and politics sense is, to transform the heart of East London, to make Olympic Park capable of sustainable living and to showcase UK as a creative, inclusive, and welcoming destination to live in, visit and conduct business. Furthermore the Olympics committee have branded these games, The Legacy Games and The Economic Games (Department for culture, media and sport, 2009).

The Legacy Games
The Olympic Committee and government hope to deliver a lasting legacy from the Games; extensive plans have been developed to ensure that each legacy created becomes realised (Department for culture, media and sport, 2009). A legacy that has been created to assist with the revitalization of UK is the transformation of East London. Here they plan on building more than 30,000 new homes, some of which will be used during the Olympics, which a good percentage of these homes will being considered for affordable living (Department for culture, media and sport, 2009). Also, Olympic sporting facilities after the games will be available for use by the community and elite athletes, in addition over 100 hectares of land will be available for parkland, children’s play areas and park facilities. Furthermore, upgrades to the transportation system will be done, this includes the upgrade of many railway station; this will assist London’s transportation system for the long-term (Department for culture, media and sport, 2009).

The Economic Games


As previously stated, London 2012 is in the midst of an economic downturn, this has changed the ways in which the Government and the London Olympic Committee will focus on certain aspects of the games. They believe it is integral to achieve their legacy goals, which includes the rejuvenation of East London. Before the commencement of the Games, London 2012 has been giving numerous opportunities for individuals to be involved, through direct employment, training and apprenticeships (Department for culture, media and sport, 2009).

Due to England seeing the Games as The Economic Games, many economic benefits are already seen as being evident and the Games will also continue to play a vital role in improving the English economy. Examples of current benefits consist of; the creation of 75,000 supply chain opportunities, the creation of employment with up to 11,000 people working on-site and up to 100,000 contract jobs to assist at the games and the introduction of 350 construction apprenticeships at Olympic park (Department for culture, media and sport, 2009).

The economic plans also state long-term objectives, one of which is similar to the legacy of creating affordable homes, others consist of; creating opportunities for tourism, media, sport and numerous other government sectors within England; the estimated value of the games to tourism is £2.1bn. Furthermore, a long-term plan to increase the potential for investment and export will be established (Department for culture, media and sport, 2009).

An additional program that has been introduced to assist with businesses getting involved is the London 2012 Business Network (London 2012, n.d). The Business Network is assisted by CompeteFor; here businesses are assisted in gaining job opportunities. CompeteFor ensures transparency and availability of London 2012 business opportunities whilst increasing business numbers and diversity for involvement in the Games (CompeteFor, n.d).

Commodification of London 2012
Commodification or the commercialization of London 2012 is evident through the sponsorship of the Games. Although, as stated previously, one of the Games main principles is keeping it non-materialistic (Wiley Online Library, 2011). Monetary funds from sponsorship deals help greatly in raising revenue to fund London 2012, as approximately a third of the International Olympics Committee revenue is gained from sponsorship programmes (Kenyon, J, Palmer, C, 2008). Sponsorships are of great assistance also to the companies sponsoring, as many companies can use their brand awareness from the games commercially to their advantage (Ourcommunity.com.au, n.d).

With the exception of the International Olympic Committee, the running of the games is down to the responsibility of two organisations, The Olympic Delivery Authority (ODA), which is funded directly by the government and the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) (Kenyon, J, Palmer, C, 2008). LOCOG is a private organisation whose main revenue stream is from private sponsorships and the IOC (Kenyon, J, Palmer, C, 2008).

There have been many commercial sponsorship deals which London 2012 have gained throughout organising the games, an example of these is; Adidas, the German sportswear manufacturer whom paid an estimated £100m over 5 years to be associated with the Games (The Telegraph, 2008). Moreover, companies can also sponsor the Games in terms of providing goods for the running of the event, for example, BMW will be donating up to 4,000 Mini and BMW bicycles and motorbikes to be used by numerous stakeholders during the Games (BBC News, 2009).

Furthermore, domestic sponsorship of the Games can bring in considerable revenue, here; three tiers of sponsorship have been established. As an example, tier one sponsors must pay at least £50m for a six year association with the Games (Kenyon, J, Palmer, C, 2008).

Political Impacts and London 2012
As stated previously, the English government is participating largely in the conduction of the Games in regards to business and economics. They have also taken it into their responsibility to assist with other facets of London 2012. An example of this is the Olympic Delivery Authority (BBC Sport, 2005). The Olympic Delivery Authority, which was created by the English Government, is the public body whom are responsible for the development and building of infrastructure for the Games; they are also responsible for developing the infrastructure so that it can also be utilised by the community after the Games (London 2012, n.d). The ODA is responsible for building the main Olympic Park, numerous sporting facilities and transportation infrastructure, just to name a few (London 2012, n.d). An additional program that the English Government has implemented for the Games is a Cabinet-level Olympic Security Committee (BBC Sport, 2005). The security body is chaired by the Home Secretary, Charles Clarke; it will be responsible for all security issues surrounding the Games (The Telegraph, 2005).

There have been political issues that have risen surrounding the London Games; one of these issues involves the London 2012 Olympic Games logo (The Guardian, 2011). The Iranian Government has threatened to boycott the London Olympics as they believe the Olympic logo represents a pro-Israeli conspiracy (The Guardian, 2011). Although these claims have been made, IOC officials have said that it means nothing of the kind and are surprised the complaint has been made now, although the logo was unveiled in 2007 (The Guardian, 2011). An additional political issue that has derived from the Games is the collapse of the deal to sell Olympic Stadium after the Games (The Independent, 2011). Previously, the stadium was in the process of being sold to English Premier League side West Ham United, but now, the English Government has stopped negotiations (The Independent, 2011). The stadium will be kept under public ownership, which may result in an extra £60m of taxpayer’s money to be contributed to the construction (The Independent, 2011).

Australia and the Games


There are many aspects of London 2012 that can be related to Sydney 2000 in Australia. For instance, an aspect that is similar is the construction of Olympic venues to be used in the future by the community; as stated previously London 2012 was hoping to revitilise and transform East London and have the developments for future use (Department for culture, media and sport, 2009), Sydney used the same concept. For Sydney 2000, Sydney Olympic Park was constructed on what was a withered wasteland of Homebush, following the Olympics the site was transformed into the City’s main events centre (The Australian, 2011).

A differentiating factor amongst these two games is the set budgets. As stated previously the London 2012 Olympics budget is in excess of £9.0bn (House of Commons Committee of Public Accounts, 2008). This is in stark contrast to the Sydney 2000 Olympics as the budget for these games was approximately $6.0bn or £2.1bn (Liebreich.com, 2003).

Conclusion
Politics and business are highly relevant within the Olympic Games atmosphere. After winning the 2012 Olympic bid the English Government has made it apparent that there are numerous business and employment opportunities for local businesses and individuals to become involved in London 2012 (Department for culture, media and sport, 2009). As mentioned previously, the Games have assisted with employing tens of thousands of people, whilst helping numerous apprenticeships; these individuals are assisting in constructing sustainable housing, parklands and Olympic Park for London 2012 (Department for culture, media and sport, 2009). Also, the Government has assisted in others ways by implementing schemes to help the games run smoothly, such as, the ODA and Cabinet-level Olympic Security Committee as stated beforehand. Also, although it is not following the true meaning of the Olympics, without commercialisation through sponsorship, there would more than likely not be sufficient monetary funds for the games, and the Government may not have enough revenue to stage London 2012. Furthermore, as shown throughout this essay, Governments and in particular the English Government do use the Olympic Games as a vehicle to improve their economies and rejuvenate their nation as a whole.