thousands of athletes participate in a variety of competitions. The Olympic Games are considered to be the world’s foremost sports competition with more than 200 nations participating. The Games are currently held biennially, with summer and Winter Olympic Games alternating, meaning they each occur every four years. Their creation was inspired by the ancient Olympic Games, which were held in Olympia, Greece, from the 8th century BC to the 4th century AD. Baron Pierre de Coubertin founded the International Olympic Committee (IOC) in 1894. The IOC has since become the governing body of the Olympic Movement, with the Olympic Charter defining its structure and authority.
The evolution of the Olympic Movement during the 20th and 21st centuries has resulted in several changes to the Olympic Games. Some of these adjustments include the creation of the Winter Games for ice and winter sports, the Paralympic Games for athletes with a disability, and the Youth Olympic Games for teenage athletes. The IOC has had to adapt to the varying economic, political, and technological realities of the 20th century. As a result, the Olympics shifted away from pure amateurism, as envisioned by Coubertin, to allow participation of professional athletes. The growing importance of the mass media created the issue of corporate sponsorship and commercialization of the Games. World wars led to the cancellation of the 1916, 1940, and 1944 Games. Large boycotts during the Cold War limited participation in the 1980 and 1984 Games.
The Olympic Movement consists of international sports federations (IFs), National Olympic Committees (NOCs), and organizing committees for each specific Olympic Games. As the decision-making body, the IOC is responsible for choosing the host city for each Olympic Games. The host city is responsible for organizing and funding a celebration of the Games consistent with the Olympic Charter. The Olympic program, consisting of the sports to be contested at the Games, is also determined by the IOC. The celebration of the Games encompasses many rituals and symbols, such as the Olympic flag and torch, as well as the opening and closing ceremonies. Over 13,000 athletes compete at the Summer and Winter Olympics in 33 different sports and nearly 400 events. The first, second and third place finishers in each event receive Olympic medals: gold, silver, and bronze, respectively.
The Games have grown in scale to the point that nearly every nation is represented. Such growth has created numerous challenges, including boycotts, doping, bribery, and terrorism. Every two years, the Olympics and its media exposure provide unknown athletes with the chance to attain national and sometimes international fame. The Games also constitute a major opportunity for the host city and country to showcase themselves to the world.
The Olympic Games program consists of 35 sports, 30 disciplines and nearly 400 events. For example, wrestling is a Summer Olympic sport, comprising two disciplines: Greco-Roman and Freestyle. It is further broken down into fourteen events for men and four events for women, each representing a different weight class. The Summer Olympics program includes 26 sports, while the Winter Olympics program features 15 sports. Athletics, swimming, fencing, and artistic gymnastics are the only summer sports that have never been absent from the Olympic program. Cross-country skiing, figure skating, ice hockey, Nordic combined, ski jumping, and speed skating have been featured at every Winter Olympics program since its inception in 1924. Current Olympic sports, like badminton, basketball, and volleyball, first appeared on the program as demonstration sports, and were later promoted to full Olympic sports. Some sports that were featured in earlier Games were later dropped from the program.
Olympic sports are governed by international sports federations (IFs) recognized by the IOC as the global supervisors of those sports. There are 35 federations represented at the IOC. There are sports recognized by the IOC that are not included on the Olympic program. These sports are not considered Olympic sports, but they can be promoted to this status during a program revision that occurs in the first IOC session following a celebration of the Olympic Games. During such revisions, sports can be excluded or included in the program on the basis of a two-thirds majority vote of the members of the IOC. There are recognized sports that have never been on an Olympic program in any capacity, including chess and surfing.
In October and November 2004, the IOC established an Olympic Programme Commission, which was tasked with reviewing the sports on the Olympic program and all non-Olympic recognized sports. The goal was to apply a systematic approach to establishing the Olympic program for each celebration of the Games. The commission formulated seven criteria to judge whether a sport should be included on the Olympic program. These criteria are history and tradition of the sport, universality, popularity of the sport, image, athletes’ health, development of the International Federation that governs the sport, and costs of holding the sport. From this study five recognized sports emerged as candidates for inclusion at the 2012 Summer Olympics: golf, karate, rugby union, roller sports and squash. These sports were reviewed by the IOC Executive Board and then referred to the General Session in Singapore in July 2005. Of the five sports recommended for inclusion only two were selected as finalists: karate and squash. Neither sport neither attained the required two-thirds vote nor consequently was they not promoted to the Olympic program. In October 2009 the IOC voted to instate golf and rugby union as Olympic sports for the 2016 and 2020 Summer Olympic Games.
The 114th IOC Session, in 2002, limited the Summer Games program to a maximum of 28 sports, 301 events, and 10,500 athletes. Three years later, at the 117th IOC Session, the first major program revision was performed, which resulted in the exclusion of baseball and softball from the official program of the 2012 London Games. Since there was no agreement in the promotion of two other sports, the 2012 program featured just 26 sports. The 2016 and 2020 Games will return to the maximum of 28 sports given the addition of rugby and golf.
The host city for an Olympic Games is usually chosen seven to eight years ahead of their celebration. The process of selection is carried out in two phases that span a two-year period. The prospective host city applies to its country’s National Olympic Committee; if more than one city from the same country submits a proposal to its NOC, the national committee typically holds an internal selection, since only one city per NOC can be presented to the International Olympic Committee for consideration. Once the deadline for submission of proposals by the NOCs is reached, the first phase (Application) begins with the applicant cities asked to complete a questionnaire regarding several key criteria related to the organization of the Olympic Games. In this form, the applicants must give assurances that they will comply with the Olympic Charter and with any other regulations established by the IOC Executive Committee. The evaluation of the filled questionnaires by a specialized group provides the IOC with an overview of each applicant’s project and their potential to host the Games. On the basis of this technical evaluation, the IOC Executive Board selects the applicants that will proceed to the candidature stage.
Once the candidate cities are selected, they must submit to the IOC a bigger and more detailed presentation of their project as part of a candidature file. Each city is thoroughly analysed by an evaluation commission. This commission will also visit the candidate cities, interviewing local officials and inspecting prospective venue sites, and submit a report on its findings one month prior to the IOC’s final decision. During the interview process the candidate city must also guarantee that it will be able to fund the Games. After the work of the evaluation commission, a list of candidates is presented to the General Session of the IOC, which must assemble in a country that does not have a candidate city in the running. The IOC members gathered in the Session have the final vote on the host city. Once elected, the host city bid committee (together with the NOC of the respective country) signs a Host City Contract with the IOC, officially becoming an Olympic host nation and host city.
By 2016, the Olympic Games will have been hosted by 44 cities in 23 countries, but by cities outside Europe and North America on only eight occasions. Since the 1988 Summer Olympics in Seoul, South Korea, the Olympics have been held in Asia or Oceania four times, a sharp increase compared to the previous 92 years of modern Olympic history. The 2016 Games in Rio de Janeiro will be the first Olympics for a South American country. No bids from countries in Africa have succeeded.
The United States has hosted eight Olympic Games, four Summer and four Winter, more than any other nation. The British capital London holds the distinction of hosting three Olympic Games, all Summer, more than any other city.
The other nations hosting the Summer Games twice are Germany, Australia, France and Greece. The other cities hosting the Summer Games twice are Los Angeles, Paris and Athens.
In addition to the United States, nations hosting multiple Winter Games are France with three, while Switzerland, Austria, Norway, Japan, Canada and Italy have hosted twice. Among host cities, Lake Placid, Innsbruck and St. Moritz have played host to the Winter Olympic Games more than once, each holding that honour twice. The most recent Winter Games were held in Vancouver, Canada’s third Olympics overall. The next Winter Games will be in Sochi in 2014, Russia’s first Winter Olympics and second Olympics overall.
(http://en.wikipedia.org/wiki/Olympic_Games, 24 Nov, 2012)
By 15 July 2003, the deadline for interested cities to submit bids to the International Olympic Committee (IOC), nine cities had submitted bids to host the 2012 Summer Olympics: Havana, Istanbul, Leipzig, London, Madrid, Moscow, New York City, Paris and Rio de Janeiro. On 18 May 2004, as a result of a scored technical evaluation, the IOC reduced the number of cities to five: London, Madrid, Moscow, New York and Paris. All five submitted their candidate files by 19 November 2004 and were visited by the IOC inspection team during February and March 2005. The Paris bid suffered two setbacks during the IOC inspection visit: a number of strikes and demonstrations coinciding with the visits, and a report that a key member of the bid team, Guy Drut, would face charges over alleged corrupt party political finances.
Throughout the process, Paris was widely seen as the favourite, particularly as this was its third bid in recent years. London was seen at first as lagging Paris by a considerable margin. Its position began to improve after the appointment of Lord Coe as the new head of London 2012 on 19 May 2004. In late August 2004, reports predicted a tie between London and Paris.
On 6 June 2005 the IOC released its evaluation reports for the five candidate cities. They did not contain any scores or rankings, but the report for Paris was considered the most positive. London was close behind, having closed most of the gap observed by the initial evaluation in 2004. New York and Madrid also received very positive evaluations. On 1 July 2005, when asked who would win, Jacques Rogge said, “I cannot predict it since I don’t know how the IOC members will vote. But my gut feeling tells me that it will be very close. Perhaps it will come down to a difference of say ten votes, or maybe less.”
On 6 July 2005, the final selection was announced at the 117th IOC Session in Singapore. Moscow was the first city to be eliminated, followed by New York and Madrid. The final two contenders were London and Paris. At the end of the fourth round of voting, London won the right to host the 2012 Games with 54 votes to Paris’s 50. The celebrations in London were short-lived, being overshadowed by bombings on London’s transport system less than 24 hours after the announcement.
(http://en.wikipedia.org/wiki/2012_Summer_Olympics, 24 Nov, 2012)
Why was London chosen?
A lot of available land to regenerate
Government was in favor
Many hotels and restaurants
Has the right facilities
A good transport system
In Europe, close to many spectators and potential athletes
A good climate during July and August
Preparations for the Games
Economics of the Games
By almost any measure, staging the Olympic Games was big business. Revenue is generated from five principal sources:
â€¢ Broadcast rights-the rights to broadcast the Games in countries around the world. In recent times, the rights for the United States accounted for about 50% and the rights for Europe accounted for 25% of the total broadcast revenue.
â€¢ International sponsorship-the rights for a company to proclaim itself an “Official Sponsor of the Olympic Games” on a worldwide basis in the four years leading up to the Games.
â€¢ Ticketing-the tickets to the individual Olympic events.
â€¢ Domestic sponsorship-the rights for a company to proclaim itself an official sponsor of the Olympics within the country hosting the Games.
â€¢ Licensing rights-the rights to use the Olympic logos and trademarks on items ranging from stamps and coins to t-shirts and stuffed animals.
Preparing For and Managing the Games
Using its allocation of the Olympic revenues, the host city London Organising Committee of the Olympic and Paralympic Games had to plan for, organize, and manage the 17 days of the Games, all within the contractual obligations set forth by the IOC. The major tasks included:
â€¢ Staging the Opening Ceremony, Closing Ceremony, and sporting events
â€¢ Arranging for the required stadia, arenas, training facilities, and equipment
â€¢ Housing and feeding the athletes and officials
â€¢ Anticipating and solving potential transportation problems
â€¢ Meeting the needs of the media
â€¢ Providing security to ensure a safe and peaceful Olympics
Importantly, while the London Organising Committee of the Olympic and Paralympic Games was responsible for “arranging” for the Games’ infrastructure, responsibility for actually providing that infrastructure rested with the host city and country. This included the stadia and arenas to stage the events, the Olympic Village to house the athletes, the national and international transportation systems to efficiently get people to and from the host city, and the local transportation systems to shuttle people to and from the events. If funds were needed to build this infrastructure, they typically were raised through taxation, lotteries, and private investment. Chris Townsend explained:
The costs of any Olympics can be broken down into “software” or people costs and “hardware” or infrastructure costs. Software costs are the responsibility of the London Organising Committee of the Olympic and Paralympic Games, and include the expenses associated with planning the Games, housing the athletes, and running the events. In contrast, hardware costs are the responsibility of the host city and depend greatly on the existing infrastructure.
The 2012 Games
Great Britain was no stranger to the Olympic Games. It was one of only four nations to compete in all 26 Olympic Games, holding third place in total number of medals won. It had successfully hosted the 1908 and 1948 London Games. And it had bid on the 1992, 1996, and 2000 Games.
Winning the rights to the 2012 Games was far from certain, however, with Paris, New York, Moscow, and Madrid also in the final running. The process to select the host city consisted of a series of secret ballots, with each IOC member voting for the city of his or her choice. After each round of voting, if no city obtained a majority of the votes cast, the city with the lowest number of votes was eliminated, and the remaining cities advanced to a new round of voting.
By most accounts, Paris was the favourite to win the rights to the 2012 Games. However, many believed the London bid was aided by the addition of Sebastian Coe to the London Bid Committee in
2004. Coe was the 1980 and 1984 gold medallist in the 1,500-meter run, was widely considered one of the greatest middle-distance runners of all time, had served as a member of the British Parliament, and was widely respected both within and outside the Olympic community.
In the end, the IOC apparently was impressed by the proposal that the London Bid Committee submitted. As announced on July 6, 2005, to the joy of its many supporters, London had won the rights to host the 2012 Games in a final, head-to-head ballot in which London received 54 votes to Paris’s 50.
The Plans for the 2012 Games
The 2012 Games were scheduled to run from July 27 to August 12, with over 12,000 athletes from
205 countries expected to compete across 26 sports and 300 events.
In a perfect world, the organizing committee knew, their decisions would satisfy many criteria.
â€¢ First, given the importance of ticketing to the Games’ bottom line, they had a strong incentive to maximize revenues.
â€¢ Second, given that the entire world would be watching, they wanted to maximize attendance-not just at the Opening Ceremony and swimming finals, which traditionally were easy sells, but also at events like handball and table tennis, which were not.
â€¢ Thirdly, the wanted to fill the seats with right people- knowledgeable fans who added to the energy and atmosphere of the event.
â€¢ Finally, tickets had to be accessible not only to the world’s elite but also to average Londoners, many of whom lived around the corner from the Olympic park.
With 7.9 million tickets up for sale, the LONDON ORGANISING COMMITTEE OF THE OLYMPIC AND PARALYMPIC GAMES anticipated an average of 500,000 spectators per day to attend the Games, with up to 800,000 on the busiest days. It estimated that roughly 30% of all tickets would be purchased by Londoners, 25% by United Kingdom residents who lived outside of London, 20% by people from the rest of Europe, and 25% by people from the rest of the world.
In addition, it expected 10,000 Olympic and political dignitaries to watch some or all of the Games, 20,000 journalists and media personnel to cover the Games, 60,000 security personnel to ensure safety, and 100,000 paid and volunteer workers to help run the Games.
Location and Venues A key selling point in the London bid was the plan to build the centrepiece of the Games-the Olympic Park-in East London. As stated in London’s bid document:
Great Games leave welcome legacies. Consistent with London’s long-term plan, the Games will stimulate vital economic and social regeneration in what is now a disadvantaged area. Creation of the Olympic Park will involve restoring large tracts of land in East London, with new green spaces and revived wetlands. The Olympic Village will become a desirable and socially diverse new residential area, providing 3,600 new homes in a community transformed by the Games.
The intent was to develop 500 acres of existing industrial and waste land in East London into the
Olympic Park. By 2012, this would include:
â€¢ The 80,000-seat Olympic Stadium-for Opening and Closing Ceremonies and athletics
â€¢ The 17,500-seat Aquatics Centre-for diving, swimming, and water polo
â€¢ The 12,000-seat London Velopark-for indoor track cycling and outdoor BMX cycling
â€¢ The 12,000-seat Basketball Arena
â€¢ The 15,000-seat Olympic Field Hockey Centre
â€¢ The 17,000-bed Olympic Village
After the Games, the plan was to reduce the size of several of the larger venues to fit with the surrounding community, to relocate several of the smaller venues to other parts of the country where they could be better utilized, and to convert the Olympic Village into 3,600 units of affordable housing, with an additional 5,400 new homes to be built later.
The remaining sports would use existing venues located throughout London and the UK, including Earl’s Court (volleyball), Excel London (judo, weightlifting, wrestling), Hyde Park (triathlon), the Millennium Dome (gymnastics), Wimbledon (tennis), and Wembley (football).
Transportation A second critical element of the London bid was a plan to make the 2012
Games the first “public transport” Olympics, with close to 100% of ticketed spectators traveling to the Olympic events by such means. To make this happen, existing transportation links to and from the East London area were to be expanded and upgraded, turning it into one of the best-connected Communities in the city. The most talked-about of these efforts was a 12-car subway shuttle called the “Olympic Javelin,” which would ferry passengers from King’s Cross Station, in the heart of London, to the Olympic Park in just 7 minutes.
These efforts were expected to support the transport of up to 240,000 passengers per hour into and out of the Olympic Park area. In turn, to encourage spectators to use public transportation, the London Organising Committee of the Olympic and Paralympic Games had announced that the price of every ticket to an Olympic event would include the use of London’s public transportation network on the day of that event.
Atmosphere finally, the London Organising Committee of the Olympic and Paralympic Games hoped to engage and excite the British public. While Sydney came to be called the “Laid-Back Games,” and Beijing had been unofficially dubbed the “No Fun Games,” the London Organising Committee of the Olympic and Paralympic Games wanted the legacy of the 2012 Games to be one of inclusiveness. Toward this end, Sebastian Coe noted:
Whilst London will be the principal venue, it is the entire United Kingdom which will be the host. The London 2012 Games will be Everybody’s Games. London 2012 will be the most accessible and participative Games ever. Putting on Everybody’s Games, we are clear that our stakeholders are the 60 million people living in Britain.
Delivering the 2012 games
The two groups responsible for delivering the 2012 games were the London Organising Committee of the Olympic and Paralympic Games, which staged the Games, and a quasi-governmental organization called the Olympic Delivery Authority, which built the infrastructure.
The London Organising Committee of the Olympic and Paralympic Games’ forecasting budget was $3 billion. Roughly $1.2 billion of this came from its share of the broadcast revenues and international sponsorships. London Organising Committee of the Olympic and Paralympic Games was responsible for the rest, with a planned $1 billion coming from about 60 domestic sponsors, $650 million from ticket sales, and $150 million from licensing fees.
The Olympic Delivering Authority’s total expenses were projected to run about $12 billion: $6 billion for the building of the Olympic park, $4 billion for the transportation upgrades, and the rest for smaller projects, contingencies and taxes. Roughly 60% of these funds came from national taxes, 15% came from London city taxes, and 20% came from the National Lottery.
Selling tickets to the games
Hired as head of ticketing in September 2007, Paul Williamson was no stranger to large sporting event. Previously, he had helped set ticketing guidelines for several FIFA World Cup Finals, the Cricket World Cup etc. He was well aware of the challenges that London Organising Committee of the Olympic and Paralympic Games faced:
Ticketing for the FIFA World Cup was a great experience, but it pales in comparison to the Olympic Games. For a World Cup Final, you sell three million tickets to 64 matches played over 30 days in 10 or 12 major cities. The teams were all of very high calibre, the stadia were all well established, and football was the most popular sport in the world. With the Olympic Games, they were trying to sell almost eight million tickets to 26 different sports played over 17 days, with some sports wildly popular and others a complete mystery to the average person. In reality, they were running 26 world championships in a fortnight.
While many ticketing issues were still up in the air, some had already been decided. In particular, it was known that:
â€¢ A total of 7.9 million tickets would be available for sale across all events.
â€¢ In late 2010, international and domestic sponsors, the 205 National Olympic Committees, the International Federations, and other IOC affiliates could place requests for tickets- specifying how many tickets at each price point they desired for each event. All would pay full price for any tickets ultimately received and, collectively, these groups would receive no more than 25% of available tickets.
â€¢ In the spring of 2011, the general public could similarly place requests for tickets, via an online ballot, specifying the event, number of tickets, and price point they desired.
â€¢ In the summer of 2011, ticket requests from both the IOC affiliates and the public would be processed and individuals would be informed as to whether they had obtained tickets.
â€¢ Later in 2011 and into 2012, any remaining tickets would be offered for direct sale.
â€¢ During the Games, tickets still not sold would be available for purchase at box offices throughout London.
Williamson noted that those applying for tickets were requesting entry to a particular event within a certain price tier. Not until tickets were matched to requests, in the summer of 2011, would customers find out where they actually sat in the stadium or arena.
Managing Ticket Revenues
When it came to managing ticket revenues, Williamson and his team looked to the 2000 Sydney
Games for inspiration:
While the 2004 Athens Games and the 2008 Beijing Games were wonderful events, they do not provide a great ticketing benchmark for the London Games. Athens was hampered by the small size of the city and the limited capacity of the venues. And Beijing tried hard to make tickets affordable for its domestic population, resulting in ticket prices that were artificially low. But the Sydney Games were staged in large venues in the largest city of a wealthy, sports- loving country. People were willing to pay to attend events and the results reflected this fact.
The London Organising Committee of the Olympic and Paralympic Games also viewed sufficient ticket revenues as vital to the legacy of the 2012 Games. As Chris Townsend noted:
With so much money involved in the Games, it is easy to view ticket sales as a drop in the bucket. What is $650 million when the Olympic Delivery Authority is spending $12 billion to build the Olympic Park and the Olympic Javelin? But putting things in perspective. Last year, Manchester United generated about $150 million in ticket revenues over a nine-month season, while the New York Yankees sold $120 million in tickets over a six-month season. They were looking to bring in four to five times those amounts, which will have a major impact on the financial legacy of these Games.
But Williamson knew that maximizing ticket revenue meant more than just charging high prices Peoples’ willingness-to-pay for a given event will depend on many factors. There’s an expectation about what a ticket should cost based on other sporting events in and around London. There’s the global appeal of a sport, with swimming and gymnastics being very popular around the world. There’s the local appeal of the sport, often driven by the host countries past success in that sport. There’s the event stage, with most people wanting to see those stages where the gold medals are awarded. And then there’s a particular team or athlete that makes the difference.
Williamson also reasoned that the pricing of tickets at past Games provided only limited guidance for the pricing of the London Games:
First, every host city possesses unique tastes, culture, and atmosphere. While beach volleyball may be big in Australia, table tennis is king in China. Second, the reach of the Games varies by location. Given the difficulties in getting into China, tickets to the Beijing Games were largely limited to the Chinese. Given the proximity of London to the rest of Europe, they anticipate a much more international crowd. Third, this will be the first Games where ticketing will be done via the Internet, which may alter demand for some events. Finally, with the current global financial crisis, London 2012 is entering uncharted territories.
The London Organising Committee of the Olympic and Paralympic Games also wanted to fill the many venues during the games. As stated in the London bid document, “Great Games generate genuine enthusiasm. This will be demonstrated by full stadia across a wide range of events.” Given that organizers expected close to five billion television viewers to watch some part of the 2012 Games, the last image the London Organising Committee of the Olympic and Paralympic Games wanted broadcast to the world was that of half-empty arenas.
Everyone at the London Organising Committee of the Olympic and Paralympic Games understood the potential fallout from attendance shortfalls. Pinned to a nearby bulletin board were several articles from recent games. In reference to the 2004 Athens Games, one New York Times headline read, “Summer 2004 Games: Seats May Be Empty, But Not the Beaches.” And in regard to the 2008 Beijing Games, the Los Angeles Times proclaimed, “Empty Seats Are a Mystery at Beijing Olympics.”
Williamson broke down the challenge of maximizing attendance into two parts. “First, you have to get people to buy the tickets. Second, you have to get those who purchased tickets to actually use them. Neither of these was a trivial task.”
When it came to getting people “to buy the tickets,” Williamson had no illusions:
You just can’t sell every ticket to every event. The Opening Ceremony? Sure. The final day of track and field? Sure. Michael Phelps in any of the swimming events? Sure. But what about a preliminary round of handball, table tennis, or archery? The demand is just lower for certain sports.
The reality is, there were three classes of events they managed. First, there was big four-swimming, artistic gymnastics, athletics, and the ceremonies-where demand historically far exceeds supply and which likely sold out at almost any prices. They expected about 40% of ticket revenues to come from these four sports. Second, there was football, with almost two million tickets across 58 men’s and women’s matches. If there was any single sport with which they obsess, it was football. On the one hand, football is the most popular sport in Europe, which worked in their favour. On the other hand, unlike the FIFA World Cup, the Olympic teams were largely limited to players under 23 years of age, eliminating some of the biggest names in the sport. They hope to generate another 10% of ticket revenue from football. Third, there were all the other sports, where supply historically exceeds demand and where they had to work hard to maximize sales.
But the challenge did not end with merely selling the tickets. As the Beijing organizers discovered, ge