14. Hamburger Symposium Sport, Ökonomie und Medien: Sport und Stadtmarketing

Schulke

LONDON 2012 MARKETING UND PUBLIC RELATIONS FROM A UK TAXPAYER PERSPECTIVE

VON DR. JOHN BEECH

The public perception of the desirability of hosting a sports mega-event has changed over a long period of time. A turning point was reached with the 1976 Summer Olympics held in Montreal, which Montreal inhabitants will remember in particular for the fact that the city did not pay off the debts incurred until 2005 (Anon. 2006). While this problem of leaving a host city in debt after a mega-event was addressed by the International Olympic Committee by the time of the 1984 Summer Olympics, the assumption that hosting a mega-event would have a big economic benefit for the host city has continued to be questioned. This paper takes the hosting of the 2012 Summer Olympics by London as a case study in how the UK government and the various agencies associated with the hosting of the Games addressed the issue of public relations in terms of getting and maintaining public support. It then contextualises the Games with respect to the position of the UK government compared with other countries in its ease of obtaining public support. Three measures for this are proposed and discussed. The role of public relations throughout the timeline is then discussed in some detail, and the paper concludes with a summary of the general conclusions that can be drawn.

THE VARYING NEED FOR AN ACTIVE PR APPROACH

The pre-event timeline for a major event such as the Summer Olympics is surprisingly long. As Table 1 shows, the start of the timeline for the 2012 Olympics began as far back as 1997 when the British Olympic Association first considered bidding for 2012.

1997: BOC decide to try and bid (again)

May 2002: Ove Arup submit a feasibility study commissioned by stakeholders

May 2003: UK government decides to back a London bid

Jul 2003: London bid notified to International Olympic Committee (IOC)

Jan 2004: London plans made public

May 2004: London makes shortlist with Paris, Moscow, Madrid and New York

Feb 2005: IOC inspects London

Jul 2005: London wins in Singapore

2008 BeijingOlympics: Cultural Olympiad begins across the UK

May 2011: First test event (Marathon)

August 2011: First test event at Olympic Park (basketball)

May 2012: First test event in main Olympic stadium; First round of ticket sales

July 2012: Opening ceremony

Table 1: Timeline for London 2012 Summer Olympics

Reviewing the timeline makes clear that the level of public gaze and engagement varies considerably over the fifteen-year period. Periods when there is a high level of public interest will automatically generate publicity, although this still needs to be managed. Three such periods could have been identified on an a priori basis:

2003 to 2005: From decision to bid, and up to winning the bid

2008 to 2012: Cultural Olympiad

2011 to 2012: Test events

Before the decision to bid there is by definition only a very low need for a public relations involvement. Once the decision to bid has been made, there will be some level of public interest at any subsequent phase, but essentially there is a gap between 2005 and 2011 in which any news stories would tend to be media-driven. It became clear that, in the best traditions of the UK media, such stories would tend to be written with a negative accent, and in fact were focused on government estimates of costs and on questioning preparedness.

Empirical evidence for fluctuating levels of public interest in major sporting events is provided by research conducted into the variation in Google search activity for five megaevents, and is shown in Figure 1.

Figure 1: Variation in internet search activity for sports mega-events (Rost, Johnsmeyer et al. 2014)

This makes clear that, while there is a continuous low-level public interest preceding each of the sports mega-events, it is only around the actual event that the interest peaks sharply. This poses a small problem for Olympic host cities as there is a requirement imposed by the IOC that a bidding city can demonstrate that its bid has significant public support. The procedure document issued by the IOC with respect to the 2012 Summer Games includes the following passage:

PUBLIC OPINION

A. What is the general public opinion in your City/Region and country towards your project of hosting the Olympic Games?

If you carry out opinion polls, please specify the following:

Questions asked

Area Covered

Dates of poll

Sample size

B. What opposition is there to your project? Please detail.

(International Olympic Committee 2003)

The UK government’s Department for Culture, Media & Support conducted the necessary polls, but avoided asking the direct question of whether the respondent actively supported the bid, instead focusing on establishing level of interest and on assessing belief in positive outcomes, in particular in creating jobs, in boosting tourism, in boosting business and in increasing sports participation. This obliqueness may well account for the claimed levels of support exceeding the IOC’s own measurement. The IOC, commenting on the London Bid Document, noted Public polling shows 82% support in London and 81% national support. The IOC poll, however, is lower with 67% support and 13% opposition. Main reasons for support are given as promotion of the city and country, the economy and jobs and support for the Olympic Games and sport in general. Main reasons for opposition are concerns about the cost and traffic. (International Olympic Committee 2004)

THE LIKELIHOOD OF PUBLIC SUPPORT

Empirical evidence for a lack of public support for a sports mega-event exists, or has existed, in the form of websites created to promote the ‘No Voice’. They are by their nature transient – once the decision to bid or not has been taken, there is little point in those backing the ‘No Voice’ to continue paying for a web domain. Table 2 shows a list of Olympic Games for which a ‘No Voice’ website was established up to 2012 and the hosting of the London Games. The existence of a website in 2012 opposing Madrid’s bidding to host the 2020 Summer Olympics is a reflection of the very long timeline noted above.

1998 Nagano, Japan

2000 Sydney, Australia

2006 Helsinki, Finland

2006 Torino, Italy

2008 Toronto, Canada

2008 Osaka, Japan

2008 Beijing (pro-boycott websites)

2010 Vancouver, Canada

2012 London, UK

2014 Sochi, Russia

2016 Chicago, USA

2018 München, Germany

2018 Annecy, France

2020 Madrid, Spain

Table 2: Bid-specific anti-Olympics websites identified

The significance of such websites is hard to evaluate. The list includes both cities that were ultimately successful and those which were ultimately unsuccessful, but whether there was a causal connection cannot be established.

More recent bidding campaigns have tended to include a full-blown state-run referendum, with a view to providing categorical evidence of popular support to the IOC.

As Table 3 shows, these referenda have tended to produce a negative result.

Table 3: Results of recent Olympic bid referenda

Three factors seem likely to be relevant in the strength of public support. These are identified below, and an indicative measure suggested for each of them.

1. Ability of government to pay costs

Even if it is argued by a government that a net economic benefit is envisaged, a sports mega-event is likely to require significant capital investment in new infrastructure, both in terms of sporting venues and in terms of non-sporting infrastructure such as roads, railways, services and hospitality facilities. There is a broad requirement from the franchise owners of the mega-events (the IOC or FIFA) that facilities must be provided to a high, world-class standard, pushing their costs up. The public in a particular country is likely to consider whether they feel they, as a country, can afford the expense of investing in hosting a sports mega-event. It is suggested that a simple but effective measure of a government’s ability to pay the up-front costs of providing the infrastructure, and in the longer term to bear the risk of a lack of net benefit, is the country’s Gross Domestic Profit (GDP). Four widely recognised international bodies regularly publish data on GDP (Various 2013) – the International Monetary Fund, the United Nations, the World Bank, and the CIA through its World Factbook – and the first of these has been chosen albeit arbitrarily (an overview of the four sources does reveal minor differences in stated values, but these are indeed only minor).

2. The issue of opportunity costs

While it may be that a large country with a large GDP may be able to bear the costs, the country may be considered to better spend its money on infrastructure of more obvious public benefit, on, for example, schools, hospitals, housing etc. As an indicative measure of whether a country needs to seriously consider the issue of opportunity costs, GDP per capita is suggested, and again the International Monetary Fund data has been selected arbitrarily.

3. Ability of government to engineer public support

If a government is to use public relations tools to encourage the public to rally round and support a bid, the ease with which it can do so will depend on the extent to which free debate can take place and the extent to which transparency allows relevant data to be in the public domain. These factors reflect the level of democracy practised in the individual country, and the indicative measure proposed is the Economist Intelligence Unit Democracy Index (The Economist Intelligence Unit 2012). The length of the timeline involved makes a choice of year for these datasets arbitrary, but so long as it is recognised that these are only indicative measures for the three variables under consideration, they are good for comparisons. For the Summer Olympic Games from 1992 onwards, the mean of the bidding cities has been calculated and plotted against the value of the winning city for each of the three measures. This is shown in Figures 2, 4 and 5 below.

Figure 2: Ability to pay – GDP ($bn)

London fell well below the mean of the bidders for 2012, but did not appear to be an unusually extreme case. Sydney (2000) and Rio (2016) followed much the same pattern; on the other hand, Atlanta (1996) and Beijing (2008) are cities from countries which can afford to stage the Games much more easily than their rivals.

It is worth noting that the allocation of sports mega-events does in general reflect the pattern of prosperity across the nations. As Figure 3 shows, there has been a distinct tendency to allocate such events to countries in Europe and North America, plus Russia, Japan, China and Australia (Bang 2014).

Figure 3: Geographical distribution of sports mega-events since 1990

Figure 4: Opportunity costs – GDP per capita ($)

London (2012) falls almost coincident with the mean, and thus poses no particular problems with opportunity costs, at least, in comparison with its rivals. Beijing (2008) and Rio (2016) might well have much greater issues with opportunity costs, and in the case of Rio at least there is evidence of social unrest and protest, although it is difficult to separate this effect with respect to the 2014 FIFA World Cup and the 2016 Rio Olympics.

Figure 5: Ability to engineer support – Democracy Index

Although the UK is slightly more democratic than the mean of the bidders, there is no reason to believe that this in itself would present particular challenges to the UK government in managing its public relations with respect to London 2012. With respect to other Summer Olympics, China in 2008 clearly has the easiest job in manipulating public opinion. Overall, London should have been in a good position convincing its public that the Games are affordable and that opportunity costs are not an issue. However, as with any country that has a high democracy index, it could expect to contend with a ‘no voice’, whether organised as a lobby group or in the shape of a sceptical set of newspapers and other media outlets.

MANAGEMENT OF PUBLIC RELATIONS BY UK STAKEHOLDERS

As the title of this section of the paper might be seen to imply, management of public relations, whether reactively or proactively, was complicated by a multiplicity of stakeholders with complex inter-relationships. The stakeholders can be grouped thus:

Franchiser-related

International Olympic Committee itself

London Local Organising Committee of the Olympic and Paralympic Games

British Olympic Association

State-related

National government – Prime Minister(s); Government Olympic Executive

Local government - Mayor(s) of London

Event-related

Olympic Delivery Authority

London Development Agency (land owners) Olympic Park Legacy Company

London Legacy Development Corporation

To this list of direct stakeholders can be added a number of indirect stakeholders such as sponsors (both the ten IOC TOP sponsors and the locally-generated sponsors, suppliers, the written media, and broadcasters). Within the UK full coverage of the Games on television was provided by the BBC (the state broadcaster) and Channel 4 (an independent private broadcaster), both broadcasting with a free-to-view service. The immediate consequence of this complex set of stakeholders was the problem of a variety of interests with respect to public relations. While the UK government might have wanted to be ‘first among equals’, its lack of power in performing the role of most significant stakeholder meant that for much of the time it was left to manage public relations reactively rather than proactively. Four phases can be identified with respect to the management of public relations:

1. Backing the Bid

In this phase, the focus was on London itself. The highest profile activity was backed by central government and consisted of a campaign using London Underground trains as advertising vehicles (both metaphorically and literally), as Figures 6 and 7 show.

Figure 6: London Underground ‘Back the Bid’ campaign (external); (Route 79 2005)

Figure 7: London Underground ‘Back the Bid’ campaign (internal); (hithro undated)

The green livery illustrated and a blue variant were of course in stark contrast the normal, familiar red. The number of trains re-liveried was very low, thus the direct impact was similarly low, but there was significant indirect impact through coverage of the story by the media.

2. The long build-up

From early in the timeline there was already a focus on the estimated costs, both in Parliament and in the media, with the media encouraging debate on the issue (BBC 2003). As is so often the case, the estimated costs had a nasty habit of growing over time, although it is not clear whether this was a simple case of ‘cost creep’ or a calculated attempt only to reveal the full costs incrementally. Table 4 shows a selection of revelations of the rising costs from various BBC News webpages.

Table 4: Escalation of estimated costs during the long ‘build-up’ phase

Response to the rising costs was at least in part dependent on the extent to which UK individuals would have to meet the costs. From public funding there were three unequal tranches for the costs of both hosting and staging the Games:

London residents:

The equivalent of £20 onto every Council tax bill every year for up to 12 years, a total of £240 = £625m in total

UK government:

Roughly equivalent to, on average, £310 from every UK taxpayer (including London residents) = £9.3bn (up from original estimate of £3.3bn)

Lottery Fund:

Monies raised specifically for the Games, but including £112m switched from arts funding The largest part of the costs were thus borne by taxpayers across the whole of the UK. The Games themselves were staged entirely within London, with two exceptions:

The sailing events were held in Weymouth, a resort on the South coast some 220 kilometres West South West of London

The stages of the football competition were spread between London, Coventry, Manchester and Newcastle in England, Cardiff in Wales, and Glasgow in Scotland. There were no Olympic events held in Northern Ireland.

In spite of this small-scale attempt to spread events throughout the country, it was inevitable that they were seen as London-centric, and interest was proportionately lower in, for example, Scotland. The two opening ties were played at Hampden Park in Glasgow (capacity 52,000), where it was felt necessary to give away 34,000 tickets in view of the low level of interest from the public (BBC 2012b).

Given that the events of the Games themselves were going to be so London-centric, the Cultural Olympiad provided a possibility to increase awareness of and interest in the Games themselves. In addition to a London Festival for a three month period around the Games, the major component of the Olympiad was a series of activities, lasting up to four years (2008 to 2012) which were very locally focused throughout the United Kingdom, with a cultural content decided locally, and aimed at engaging young people in the Games, albeit obliquely. As with all the Summer Games since 1992, the IOC had no controlling interest in the content of the programme, and the UK government was content to sit back and delegate the choice of content to local organisers. As a result, content was varied and quirky, and often had little clear connection with the Games. The contribution of Coventry, as an example, was the design and construction of a 6-metre statue of local folk hero Lady Godiva, wearing a costume designed by leading UK fashion designer Zandra Rhodes. Once completed, the statue was towed to London (approximately 160 kilometres) by teams of cyclists (BBC 2011). As with many of the projects, it can be assumed that it engaged those participating in it, but probably had little impact on the general public.

3. The Event Phase

During this phase publicity was essentially self-sustaining. With the exception of low regional attendances at football matches mentioned above, there was nothing which required a public relations input. Immediately prior to the Games and during the Games, a campaign was conducted using regular advertising boards on London Underground trains and stations to encourage Londoners to either work at home or cycle to work during the Games to reduce the risk of serious congestion for visitors travelling on the Underground. In the event there were no reports of serious congestion problems, but where this campaign lay on a scale from total success to blatant scare-mongering is entirely a matter for speculation.

4. The Post-Event Phase

Towards the end of October 2012, reports began to circulate that the government was claiming the Games had come in under budget, which came as a surprise to those who were aware of the ever increasing costs listed in Table 4. A Press Association report carried by The Guardian on 23rd October said The London 2012 Olympic and Paralympic Games have come in £377m under budget, according to the latest government figures. The overall cost of the Games is forecast to be £8.921bn from a budget of £9.298bn. With some contracts still to be wound up after the end of the Games, ministers are describing the underspend as a „prudent estimate. The sports minister, Hugh Robertson, described the feat of managing the complex programme within budget as „a tremendous success" (Press Association 2012).

The PR spin that the Games had come in under a budget of £9.3 hinged on an estimate made in February 2012 (BBC 2012c), and was clearly disingenuous and distinctly misleading. The myth of ‘coming in under budget’ was maintained by the UK government in spite of its lack of substance. Just over a year after the conclusion of the Games the BBC reported The cost of the London Olympics and Paralympics was £528m less than expected, according to the government. The combined budget for the two events was £9.29bn, but the cost has been revised to £8.77bn. (BBC 2013) The UK government was determined to persist with its longer-term amnesia, and it appeared that the British public were also forgetting what the original estimates were, as there was little public outcry. To add to the blatant attempts to mislead the public about costs, in the post-Games phase the government conveniently forgot to include new costs (for legacy projects) that it had announced in September 2012. These included:

£125m per year funding for elite sport over the next four years - up until Rio 2016.

£300m investment to turn the Olympic site into the Queen Elizabeth Olympic Park, open to the community.

Bringing 20 major sporting events to UK by 2019, with more bids in progress.

Sport England›s £135m Places People Play legacy programme to fund new facilities, volunteering and participation programmes.

£1bn investment over the next five years in the Youth Sport Strategy, linking schools with sports clubs and encouraging sporting habits for life.

Government support for the Join In programme to build on the spirit of volunteering seen at the Games by getting people to volunteer at their local sports club.

Introduction of the School Games programme sponsored by Sainsburys to boost schools sport and county sport festivals.

More done to ensure PE in schools is available to all.

£1.5m funding to the English Federation of Disability Sport to increase participation in sports by disabled people.

Continue funding for International Inspiration, the UK›s international sports development programme, to 2014.

(BBC 2012a)

Although not all items were costed publicly, it seems likely that these item will add at least a further £3bn to the final bill, an increase of over 30% on the budget which the government was claiming to have come in ‘under’.

While these transparently false, or at the very least misleading, claims by the UK government must be considered to be an inept own-goal, one other issue required PR management, that of the legacy use of the main Olympic stadium. Here the handling of PR can be seen as incompetent, although the degeneration of the situation into a lengthy and expensive legal battle was not due to the government’s actions.

Three football clubs – Tottenham Hotspur and West Ham United, both in the English Premier League, and Leyton Orient from League 1 (the third tier in the English football pyramid) – had shown an interest in moving into the Olympic stadium after the Games. The interest of Leyton Orient, for whom the main stadium would have been unrealistically large – there was in fact some discussion about the hockey stadium being a more appropriate venue - was essentially strategic; their existing ground at Brisbane Road is less than two kilometres from the Olympic stadium, and distinctly closer that Tottenham’s White Hart Lane or West Ham’s Upton Park. Both Premier League rules and Football League rules did not allow a club to a new ground in the vicinity of another club’s ground; however, the leagues eventually decided that just under two kilometres apart did not constitute ‘in the vicinity of’. After a protracted legal battle, Tottenham withdrew their bid to move into the Olympic stadium, as did Leyton, leaving West Ham as the only bidder. What has surprised and angered many taxpayers is the level of subsidy being offered to West Ham to help with the conversion of the stadium to make it more suitable for use by a