Olympic Games – ‘No grazie’!- Paul Freudensprung

February 15, 2012

Today’s decision by the Italian government to decline its support to the Italian NOC in its bid for the 2020 Olympic Games could well mark a turning point for major sports event hosting. The rise of Emerging Economies as major event hosts has been evident over the past years. Those countries have the financial resources and the political will to stage World Cups or Olympic Games at any cost. A major driving factor is the gain in international prestige.
The reasoning for the Italian government’s decision was reported as the following in the Corriere della Sera newspaper: The government did not want to write a blank cheque for financing the Games with public money in terms of a guarantee required by the IOC. The exploding costs of the London 2012 from the initial cost estimate played a role here in the context of Italy’s current public debt reduction efforts. The Italian government did also believe that the benefits from
hosting the Olympic Games in 2020 does not outweigh its cost, citing the 2004 Athens Games. An important point that implies the Italian government will invest its money in alternative projects with higher return to spur economic growth in the coming decades.
This decision also underlines how important government funding has become to hosting major events. As Holger Preuss has stated already in 2004, only the Olympic Games in the US had a lower than 25% share in public investment.  For most other Games it ranged from 50 to over 75 percent.
But Italy is not alone in its decision. For instance, in 2006 a working paper prepared by the Copenhagen Business School concluded that it would be of high risk for the country to bid for a mega sports event. The Mayor of Copenhagen, Ritt Bjerregaard, confirmed that the Olympic Games were too big an event for a country with five million inhabitants, as reported after her visit to the Beijing Olympic Games in 2008.
In the near future it will be interesting to observe the Olympic bids of Madrid  (2020) and Barcelona (2022), as the Spanish economy is also subject to severe cuts in public expenditures due to its public debt on national and local level. In this context, the LaVanguardia newspaper reported at the beginning of February that the brand-new €294 million stellar indoor arena ‘Caja Magica’ was empty without any scheduled activity for 2012.
In the long-term the impact on major events bidding and hosting remains to be seen. But it seems, event property owners may need to reflect on what is happening.
La Stampa newspaper from Turin showed a 95% approval rate for the Italian governments decision not to bid for the Games in a public online opinion poll among its readers.

Today’s decision by the Italian government to decline its support to the Italian NOC in its bid for the 2020 Olympic Games could well mark a turning point for major sports event hosting. The rise of Emerging Economies as major event hosts has been evident over the past years. Those countries have the financial resources and the political will to stage World Cups or Olympic Games at any cost. A major driving factor is the gain in international prestige.
The reasoning for the Italian government’s decision was reported as the following in the Corriere della Sera newspaper: The government did not want to write a blank cheque for financing the Games with public money in terms of a guarantee required by the IOC. The exploding costs of the London 2012 from the initial cost estimate played a role here in the context of Italy’s current public debt reduction efforts. The Italian government did also believe that the benefits fromhosting the Olympic Games in 2020 does not outweigh its cost, citing the 2004 Athens Games. An important point that implies the Italian government will invest its money in alternative projects with higher return to spur economic growth in the coming decades.
This decision also underlines how important government funding has become to hosting major events. As Holger Preuss has stated already in 2004, only the Olympic Games in the US had a lower than 25% share in public investment.  For most other Games it ranged from 50 to over 75 percent.
But Italy is not alone in its decision. For instance, in 2006 a working paper prepared by the Copenhagen Business School concluded that it would be of high risk for the country to bid for a mega sports event. The Mayor of Copenhagen, Ritt Bjerregaard, confirmed that the Olympic Games were too big an event for a country with five million inhabitants, as reported after her visit to the Beijing Olympic Games in 2008.
In the near future it will be interesting to observe the Olympic bids of Madrid  (2020) and Barcelona (2022), as the Spanish economy is also subject to severe cuts in public expenditures due to its public debt on national and local level. In this context, the LaVanguardia newspaper reported at the beginning of February that the brand-new €294 million stellar indoor arena ‘Caja Magica’ was empty without any scheduled activity for 2012.
In the long-term the impact on major events bidding and hosting remains to be seen. But it seems, event property owners may need to reflect on what is happening.
La Stampa newspaper from Turin showed a 95% approval rate for the Italian governments decision not to bid for the Games in a public online opinion poll among its readers.
About Paul Freudensprung:
He has over 15 years of experience in the sport industry and specialises in directing and advising multi-stakeholder working groups at major events where different objectives and interests need to be aligned in order to develop effective event operations and functional venue infrastructure.

Paul has been involved in operations of 4 Olympic Games, 2 FIFA World Cups, and was the Games Plan Director of the 2014 Salzburg Olympic Winter Games Bid. In 2006 Paul set up his own consultancy company offering strategic solutions related to the development of integrated event operations programs, appraising contractual issues around venue agreements and supplier contracts and defining infrastructure development concepts and operational venue designs. He also teaches courses on event management for the MBA program at the European University in Barcelona.

Before joining the event management industry Paul spent 3 years conducting environmental and economic impact assessment of European transport infrastructure projects. Paul holds a Masters degree from the Faculty of Economics of the University of Sydney and a Masters degree from the Institute of Geography of the University of Vienna.

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