This page contains a Flash digital edition of a book.
Spiraling costs of major sporting events Alan Shaw, managing director of EPIC


This year's Winter Games in Sochi were among the costliest in Olympic history


T


he cost of hosting major sporting events has increased rapidly in recent years and event


owners have become eager to control the cost of staging games. Olympic Games costs through the past 15 years have jumped from the US$2-6bn range (1996-2002) to $10- 18bn (2004-2012). The Beijing Games in 2008 (US$40+bn) and Sochi this year (US$50+bn) have been touted as the costliest in history. Other major sporting events,


such as the Pan American, Asian, Commonwealth and World University Games cost around $150-250m to organise just over a decade ago. It is estimated that organisers


are now looking at investing between four and 12 times that. ‘Games inflation’ is out


of control and one negative impact is that many potential Games hosts are dropping out of bid races. Stockholm, Munich, Toronto, St. Moritz, and more recently Krakow have all pulled out of bidding races citing high costs. Even cities awarded bids (Hanoi, Asian Games 2019) are reneging for similar reasons. So, what can event owners do to limit costs and help ensure their brand stays healthy? Push harder for temporary venues? Simplify the bidding process? This might help, but event


owners have little ability to control costs when their event


is used for political, economic, image or pride reasons. They do, however, have control over at least one way to significantly reduce costs: improve and quality-assure the data and information that gets passed between organizers to reduce the significant guesswork that future organisers typically face. Host cities face an


unfathomable amount of guesswork relating to the scope of services, facilities and other operations. As a result, resources are significantly and systematically over-scoped for both larger cost-drivers (such as space, equipment, vehicles and people) and smaller line items (F&B, training, signage and fuel). Organizers egregiously over- plan, commonly adding multiple contingencies and buffers to even worst-case scenario requirements. For example, a host city


There are now pressures on Olympic hosts to deliver a spectacle 12


might pass on to a future host the information that they provided a 145-space ‘permit parking lot’ for a sport federation or broadcaster. What might not get passed on is that no more than 20 vehicles used the parking lot at any given time.


Such examples are almost endless. To improve the situation, organisers must take responsibility for indicating realistic, essential requirements and identifying excesses that aren’t necessary, or perhaps even desirable. For each event, organisers


should target, capture, filter, contextualise and validate specific data and information – especially actual usage data for the largest cost-driving resources and for the key documents that will reduce guesswork and improve resource forecasting. Providing future organisers with a comprehensive, guided Games-time learning experience will also help, as will creating (or revising) minimal service level standards and resource levels (benchmarks) for future organizers based on usage from prior events. These ideas alone won’t


resolve all the cost-related issues, but they are a practical way to dramatically reduce guesswork, ensure future organisers are well- informed and enabled to make better decisions, to simplify operations and significantly reduce costs.


sportsmanagement.co.uk issue 3 2014 © Cybertrek 2014


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92