London's bout with 'Olympicitis'

The UK government claims the Olympics will be a boon for the economy - but the long-term benefits are iffy, says author.

    London's bout with 'Olympicitis'
    The initial price tag for the London Olympics was $3.8bn, but the Games' cost has overrun its budget [Reuters]

    London seems to be caught in the throes of a curious, marauding disease: 'Olympicitis'.

    On July 27, a lavish opening ceremony will herald the third occasion that London hosts the modern Olympiad - the only city in the world yet to have done so.

    The media coverage of London 2012 seems to be divided into two adversarial camps: You either love the London Games or hate them. Being circumspect appears to have gone out the window.

    I like sport, am a Londoner born and bred, love this city and am looking forward to the Games. Yet I am also a UK taxpayer and - like many people I have spoken to in the last few months - feel I should have been given the opportunity to decide whether some of my money should be used to pay for the Games. This is, after all, part of the democratic process and is exactly what the people of Los Angeles were asked before hosting the 1984 Games.

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    High costs

    In a country where unemployment is 8.1 per cent - that's 2.6 million out of work - and the central government has made massive spending cuts, including the closure of public libraries and swimming pools and cuts in services for the elderly and people with disabilities, it's worth asking whether the £9.3bn ($14.4bn) of our money used to host London 2012 could have been better spent elsewhere.

    Some argue that Britain wasn't in the dire economic straits it's in now when London was awarded the Games in 2005. True. But governments have contingency plans and corporations have fat pockets. Our politicians and businessmen must have identified alternative revenue funding streams. Could some of these have been used instead?

    It also begs the question to what degree the economic benefits of the Games will be isolated to the capital and south-east England. A recent poll carried out by the BBC in the UK revealed that 74 per cent of people surveyed said they felt the Games would only bring benefits to London.

    The Mayor of Newham Council, the local authority the Olympic Village is in, said the Games must produce long-term jobs in a time when the central government has forced through "savage" spending cuts in the borough. Newham, he says, has an unemployment rate of 15.2 per cent, compared with the London average of 9.2 per cent.

    Sir Robin Wales, mayor of Newham, said: "Cuts in grant aid from the coalition government have meant that we are having to make £116m ($182m) savings over a four-year period." He said he's making the savings by reducing red tape not cutting services to local communities - though he admitted some voluntary services could lose all their council funding as a result of the cuts.

    Support from business

    At the Confederation of British Industry, officials are more positive. Their research shows that 40 per cent of Olympic-related construction contracts were awarded to British companies outside London. After the Games, the Olympic Village also looks set to be transformed into new housing which is desperately needed in London, some of which officials say will be "affordable" new homes.

    Around 9,000 people were also employed to work on the Games site and most building contracts were given to British firms. London's service and tourism industries – hotels, restaurants, and cafes – are also set to benefit, according to assistant regional director for the CBI London Bryan Cress.

    VISA, also one of the Games' sponsors, predicts an extra £750m ($1.2bn) will be spent by visitors to the Olympics and Paralympics, and that the Games will create almost 18,000 new jobs each year until 2015.

    Yet studies can have a strange habit of supporting the stance that those commissioning the research favour. There is also plenty of data to support the stance that the economic and social legacy London 2012 leaves may not be so rosy. Academics in the US have conducted research showing that the economic benefits sports lovers bring to a host city through extra spending are often outweighed by the numbers of tourists who stay away from visiting to avoid the rush.

    Though Prime Minister David Cameron has pledged that London 2012 will turn "into gold for Britain", he may well be jumping the starter's gun.

    This brings us to who is paying for London 2012. The question of money is an important one for the UK, a country that could well be in its most dire economic straits since the Second World War. The initial cost of the Games for the UK government was £2.4bn ($3.8bn) before it shot up to more than three times that. But London is not alone in over-running its budgets. Beijing and Athens failed to keep within budget and the Spanish government ended up with a $4bn debt after Barcelona hosted the Olympics. Scholars from Oxford University point out that the average overrun for the Games is a staggering 179 per cent. The Government has also had to pay an extra £553m ($867bn) for security after the G4S shambles, in which the private firm meant to provide security for London 2012 failed to deliver on its contract. At this stage, UK government officials and LOCOG, the Olympic Games organisers, can't say exactly how much London 2012 will cost.

    "The costs are still being finalised. We will publish a financial update after the Games," said a government official.

    Branding opportunity

    Organisers also hope to raise another £2bn ($3.1bn) through selling sponsorship, tickets and merchandise. Yet what role can and should the private sector play in the Games? Few can argue against the notion that the Olympiad is an unparalleled worldwide stage for corporate sponsors to flex and strengthen their muscle and help to fund what has been billed as "The Greatest Show on Earth".

    Yet how much exactly are these multi-nationals paying the International Olympic Committee (IOC) for the privilege? Apparently the size of each individual contract is secret. Yet The Economist recently stated that all 11 global sponsors paid $957m between 2009 and 2012.

    And in order to protect their slice of the pie, we now have a new law that bans people from using phrases like "Olympic Games" for commercial purposes. The government changed the law with the introduction of the London Olympic Games and Paralympic Games Act 2006. This new piece of legislation, along with the existing Olympic Symbol (Protection) Act 1995, is meant to "protect" the Games and its sponsors. The IOC made it a pre-condition for London securing the contract for the 2012 Games, say ministers.

    The law bans any non-sponsors from using for commercial purposes photos, symbols or words that may hint at being connected to the London Games. Using words like "Olympic…Paralympic, their plurals, translations or anything similar to them" (I quote from LOCOG's guidelines) is a big no-no.

    This underlies a larger malaise - the increase in the commercialisation of sport and controlling who gets to make money by using the Olympic "brand". It's not rocket science to see that monopolising segments of the English language and threatening people with legal action for failing to toe the line is nonsensical.

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    The fact that politicians in this country, once they'd stopped enjoying the hospitality put on by corporation, agreed to this is disturbing. Some argue that since the private sector helped fund the Olympics and Paralympics, they deserve to have their investments protected. Richard Caborn, the former Minister of Sport who helped usher in the law, said in a recent radio interview that he was "proud" of the act. But even he admitted it was "barmy" to ban the use of certain words.

    Commenting on the increased commercial presence in sport, Nick King, director of independent group Sports Think Tank, says: "Sport is business now, it's unavoidable. With that comes positive and negative things. What is incumbent on sports administrators, including the IOC and the Football Association, is to get the balance right between using the money invested from the private sector in a positive and strategic way and not throwing the baby out with the bathwater and selling the soul of the sport….Broadly speaking, I think the IOC has been successful in that."

    Yet this logic neglects the fact that the larger the Games are and the "show" is, the more money needs to be pumped in and the more funds need to be raised. So we find ourselves sucked into this vortex yet again. But is this trajectory inevitable?

    As Anil Dawar, a Londoner and an avid sport fan, says: “The more money they put in to the "show", the more they are going to want back in return. [This means] ticket prices up, burger prices up, programme prices up and the more sponsorship they will have to get to stage it. It can never go back to what it was. Too many vested interests - big show equals big profit, equals big wages for stars. Are they going to give that up?”

    I'm all for sport and people enjoying themselves. People in the UK have had a lot to deal with over the last few years. Many no longer trust politicians, the media, high-flying corporates or bankers. So the next few weeks will be welcome respite. But before we all jump on to the Olympic bandwagon, it would be wise to ask what the long-term tangible benefits will really be from a sporting event that has long been hijacked by corporate and political showmanship.

    Rajeshree Sisodia is a journalist who focuses on human rights, development and conflict-related issues in Asia.

    SOURCE: Al Jazeera



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