Building a Legacy. Sports Mega-Events Should Last a Lifetime

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Building a Legacy

Sports Mega-Events Should Last a Lifetime

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When the International Olympic Committee began its search for a host city for the 2012 Olympic Games, the options were plentiful. In addition to the shortlist of candidates—London, Madrid, Moscow, New York and Paris—cities such as Rio de Janeiro, Istanbul, Havana and Leipzig were also in the running. The world watched as the candidates created glossy bid books, offered elaborate presentations and engaged in intense last-minute lobbying. Each city painted a positive cost-beneﬁt picture, demonstrating rigorous planning techniques and world-class implementation teams.

In the end, London won the privilege to host the games and is now planning to reap the rewards. Cities and nations that host such events, and manage them correctly, can expect to increase tourism, create jobs, improve their infrastructures, and boost demand for products and services. The prospective economic returns are unmistakable and capturing them is what every host should be able to do well, or well enough (see sidebar: Aim for the Quick Wins).

However, host nations are far less adroit at capturing the longer lasting, less tangible beneﬁts that can result from a mega-event. These

rewards reach into every part of an economy and culture by reinvigorating communities, improving health and educational systems, and cleaning up environments (see figure 1 on page 2). Hosts tend to treat mega-events as prestige projects that are justified (accurately or not) through a measure-ment of tangible benefits minus tangible costs. Countries tag on some social programs to help make their case and obtain local support, but both the benefits and the add-ons are rarely integrated into broader national or regional strategies.

A mega-event should be incorporated into a comprehensive national strategy that captures the tangibles while also advancing a nation’s social and economic development, inspiring passion and national pride, and building a global reputa-tion—all of which can last a lifetime.

Capturing the “Intangibles”

Host cities and nations that think beyond the requisite costs versus beneﬁts of a mega-event will be in a stronger position to achieve the longer-lasting, less tangible and more emotional aspects that such events should inspire. Barcelona did it. How else do you explain that 10 years after the 1992 Barcelona Olympic Games, 40,000 people

M

ega-sporting events can transform a city. Forgotten

neigh-borhoods get desperately needed makeovers. Massive

clean-up efforts curb smog and pollution. Transportation

upgrades enhance mobility. Yet for every story of a city cleaned up,

there is another of lingering debt and disrepair. Only a few large-scale

events live up to their full potential. Even fewer deliver the promised

long-term rewards. But for cities and nations that focus on both

the immediate and the longer term, they do more than simply host

an event, they build a legacy.

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gathered in Montjuic stadium to celebrate the anniversary? In our experience, any host can be a Barcelona if it believes the tangibles and intangibles are greater than the sum of their parts. The most successful hosts begin by build-ing a legacy in three areas: society, sports and the environment (see ﬁgure 2).

Building a social legacy

Large-scale sporting events can do a world of social good. The excitement of being chosen to host an event can be infused directly into

com-munities, schools and other areas, with powerful results. The beneﬁts continue to accrue well after the event is over and are self-sustaining, meaning they either require no more investment or they have local sponsors that are committed to con-tinuing the program.

Revitalize local communities. Hosting a mega-sporting event provides an opportunity to inﬂuence the pattern of urban development. For example, Athens used the 2004 Olympic Games to improve the city’s notoriously con- gested transportation system. Seoul used

facili-Figure 1

Mega-events can move nations to the next stages of development

Source: A.T. Kearney

Emerging Evolving Excellent

Illustrative Social, cultural and environmental Economics Growth and infrastructure

• Weak social fabric, ethnic divisions, and limited civil society or community participation • Poor quality of life, lack of public support for arts and weak environmental standards • Health-care and education are poorly funded

• Limited access to loans and housing

• Basic educational system with limited links to business or academic communities • Industry driven by a few vertically integrated sectors, poor supply chains, import-dependent and limited service sector • Central bank is not independent and subject to investor uncertainty • Poor fiscal management, inflation, high debt levels, volatile financial markets and weak growth

• Regulations are subject to change; narrow group of interests blocks competition

• Poor physical infrastructure, unstable administration and legal system

• Stable and tolerant society with supportive institutions • Environmental degradation in urban centers; limited cultural and leisure lifestyle

• Health-care and education are government priorities, but management and bureaucracy hamper results

• Sanitation services in place, but access to clean air, water and health is limited • Science and technical tions support industry and are wired into overseas knowledge centers

• Moderate levels of productivity, yet weak in terms of innovation • Moderate to strong growth, though not sustainable; omy still vulnerable to swings • Sound economic policies help build investor confidence, but political transitions can upset markets

• Physical infrastructure strained by demographic and economic pressures

• Basic regulatory, administration and legal systems are in place

• Diverse, tolerant society with wide choice of lifestyles, leisure and cultural activities • Focus on urban and community design that fosters public health, well-being, business growth and efficient use of resources • High quality education and health-care available to all • Public sanitation is efficient and provided at low cost; leading environmental standards • Vibrant, connected economy that continuously innovates, renews and leads markets • Large share of profits are plowed back into R&D, corporate innovation and new business models

• Above average growth rates over long term and highly diversified economy • Effective coordination of monetary and fiscal policies that are able to adjust to external shocks

• Infrastructure continuously adapts to meet evolving economic needs

• Creative and flexible financial sector encourages new forms of financing and broader capital markets

• Government supports and facilitates business-driven competitiveness

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ties built by private contractors (before the 1988 Summer Olympics) to alleviate urban housing shortages. London plans to build its Olympic Park in the Lower Lea Valley, an area ripe for redevelopment. Barcelona used the Games to regenerate its run-down urban edges. And with our help, the organizers of Torino 2006 took an innovative approach toward revitalization, moving its headquarters from Lingotto to corso Novara, a depressed area of host city Turin, where they renovated two abandoned build- ings. The committee gets four times the ofﬁce space it had at Lingotto and corso Novara, and after the event, secures ofﬁce space for more than 1,000 employees.

Improve education and cultural values.With a little creativity, the public’s interest in a mega-event can be used to improve education. Again, Torino 2006 provides a good example as the orga-nizing committee works with Italy’s Ministry of Education to create an educational program for schools that promotes Olympic values and sports disciplines. One program, “One School One Country,” is designed to promote learning in science, technology and the cultures of other countries. London 2012 is following suit, pro-posing to launch an ocean clipper, the “Olympic Friendship,” at the Beijing Games in 2008.

Also, mega-sporting events can promote cul-tural values as behaviors valued in sports—hard work, discipline, teamwork, fairness and respect for others—are applied to all aspects of society.

Develop critical skills in the workforce. The local workforce is one of the major beneﬁciaries of a mega-event in both the short and long term. Skills development programs should reach beyond sports to also develop talent in areas that will be of lasting value to the host city or country, includ-ing program management, engineerinclud-ing, tourism, security, marketing, management and leadership. In Atlanta, college students were given broadcast internships and women were offered

apprentice-ships in the construction industry. The danger is importing too many skilled workers rather than teaching local residents new skills. To avoid this, organizers should ensure that a certain percentage of workers are local residents.

Inspire national pride and unity. The prestige and competitive spirit associated with hosting a mega-sporting event can leave a legacy of national pride and unity. If done right, host nations can begin to break down racial, ethnic, gender and other forms of discrimination. This was vividly illustrated during the 1995 Rugby World Cup, which took place after only one year of democracy in racially divided South Africa. President Nelson Mandela wore a Springbok team jersey adorned with Afrikaner captain Francois Pienaar’s number six, widely seen as a sign of reconciliation.

Media coverage can help bolster national pride. Sydney launched a visiting journalists’ pro-gram in which travel writers received fact sheets, photos and video clips that showcased the city’s attributes. The city also provided 100 work

Figure 2

The intangible benefits of a mega-event

Source: A.T. Kearney

Intangible benefits Social legacy • Community revitalization • Education and culture • Workforce skills • National pride and unity Sports legacy • Participation • Competitive skills • ization Environmental legacy • Beautification • Going for the green

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stations, a 500-seat news conference center, a brieﬁng and interview room, image resource library, travel help desk, bar and bistro. Sydney’s media efforts are said to have generated more than US$2 billion worth of publicity.

Atlanta didn’t fare as well. Although the 1996 Atlanta Olympics was successful in a number of areas, transportation issues, the Centennial Park bombing and severe heat and humidity drew a raft

of negative press coverage, with the press renam-ing the city “Hotlanta.”

Building a sports legacy

A sports legacy is the most obvious outcome of a mega-sporting event. Sports can contribute to the health, well-being and identity of individu-als, communities and an entire nation, not to mention inspire passion. Consider the pride

When discussing Montreal’s winning bid for the 1976 Summer Olympics, a confident Mayor Jean Drapeau assured taxpayers that, “The Olympics can no more have a deficit than a man can have a baby.” It was a state-ment he would never live down: The initial cost estimates of US$310 mil-lion soared to US$1.5 bilmil-lion. Nearly 30 years later the bill is still not paid off, earning the Olympic Stadium known as the Big “O” the dubious nickname of the Big “Owe.” More recently, many of the venues from the 2004 Summer Olympics games in Athens are already falling into disrepair, having yet to find permanent post-game use. Greece is also suffering from a 6 percent budget deficit, a number that breaches the Euro-pean Union’s stability pact and is largely attributed to the games. As these examples illustrate, host-ing a mega-event is a risky propo-sition. Financial benefits that once seemed solid can crumble if organizers don’t keep a constant eye on both near- and long-term plan-ning. But with the right strategies in place, the tangible benefits can

be both signiﬁcant and long-lasting. Infrastructure. Perhaps the most important and enduring rewards involve infrastructure improvements. Barcelona estimated it built 50 years’ worth of infrastructure in just eight years, including waterfront develop- ments, improved sewage systems, a new airport and telecommunications system. Even with Athens’ mixed Olympic record, infrastructure improvements, which included new roads, metro and suburban trains, launched the ancient city into a modern European city.

Jobs. A mega-event not only brings an inﬂux of jobs during the games, it can help boost employ-ment numbers in both the near and long term. When Manchester hosted the Commonwealth Games in 2002, it spent about US$850 mil-lion, which in turn helped gener-ate 16,000 jobs lasting from a few months to more than a decade. For Sydney, the games brought US$3 billion in business to the region.

Tourism. One of the major beneﬁts of hosting a mega event is the immediate boost to tourism. Tourism spending injects

immedi-ate cash ﬂow into the local econ-omy, stimulating the service sector long before and after the actual event. Indeed, anticipation in the months and years ahead of an event drives tourists to host cities. For second-tier cities, this boost is particularly pertinent. Tourism in the sleepy town of Lillehammer soared 43 percent in the four years preceding the 1994 Winter Olympics. Calgary saw a similar boost. Between 1972 and 1985, the annual growth rate of international visitors to Calgary held steady at about 0.25 percent. In the three years leading up to the 1988 Winter Olympics, tourism jumped to 8 percent, then soared to 12 percent during 1988. The city then held on to an increase of 3.25 percent annual growth for the next ﬁve years.

These are the quick wins that create the foundation for long-term successes—the ripple effects that touch all other aspects of the com-munity. Getting the strategies in place early will help ensure that the tangible beneﬁts remain solid and strong for years to come.

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Canadians have for their national hockey team, or the near religious following sports fans in India have for cricket. In building a legacy, host cities and nations must stoke the competitive juices of local residents, encourage their participa-tion, and use sports to improve brand image and commercial value.

Develop competitive skills. Because competitive performance of the national team is key to a successful mega-event, host countries are encouraged to develop their athletic prowess well before the event. Australia, for example, got a wake-up call during the 1976 Montreal Olympics when its athletes won just one silver and four bronze medals. The need for skills development became the catalyst to invest in the Australian Institute of Sport (AIS), which offers scholar- ships to some 700 athletes a year and nurtures their athletic careers. It must have worked, because at the 2000 Olympics, Aussie scholarship holders won 7 gold, 11 silver and 13 bronze medals.

Improve brand image and commercial value.

A mega-event should be a boon to commercial-ization. Governments use such events to increase their commercial value, while sponsors use them to improve their brand image. For example, in our work with the South African Football Association (SAFA), we identiﬁed ways to increase existing

revenues and define new revenue streams— resulting in a significant increase in sponsorship and broadcasting rights. In France, football clubs are still enjoying the commercial benefits earned at the 1998 FIFA World Cup, with the clubs increasing their gate take by 65 percent between 1997 and 2001.

Building an environmental legacy

Environmental considerations are becoming a major issue in the selection of Olympic host cities. In fact, the IOC added “environment” as the third principle of the Olympic movement— right behind sport and culture. With this in mind, the Chinese government is striving to make Beijing 2008 the “Green Olympics.” Beijing city ofﬁcials have promised that the city’s air will be as clean as Paris’ by 2008, and are already taking steps necessary to enhance its environmental infrastructure, improve its ecological surround-ings, and organize environmental communication and education activities.

Legacy as Priority: Where to Begin

Mega-events are an opportunity to connect emo-tionally with a worldwide audience and advance the nation’s social and economic development. In our experience, the strongest legacies result

“The managerial objective should no longer be to stage

bigger Games, because ‘gigantism’ is an ever-present threat,

but to stage Games that are more unique and special, that

leave a lasting mark in the collective history of the nation

and the human race.”

— J

EAN

-L

OUP

C

HAPPELLET

,

“Management of the Olympic Games: The Lessons of Sydney,”

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when nations use a comprehensive program comprising the five components shown in figure 3. When initiated at the bidding stage and refined throughout the mega-event life cycle, the program ensures that the goal of capturing a legacy is integrated into the overall vision. Manage stakeholders

A legacy program begins with getting buy-in from all interested parties including political and community leaders—ranging from high-ranking government ofﬁcials and small-town legislators to corporate CEOs and grassroots community organizers. These leaders must be convinced of the importance of building a legacy, as opposed to simply capturing the economic rewards. For example, in our work with Trinidad and Tobago’s bid to host the Cricket World Cup 2007, mem-bers of both political parties held discussions to

ensure everyone was satisfied with the longer-term benefits government spending would spur. Obtaining buy-in from local government officials is usually a prerequisite for obtaining resources and new legislation. For example, in preparing for Beijing 2008, lawmakers had to write new legisla-tion to deal with environmental and conservalegisla-tion issues. Getting private-sector leaders aboard early also lends credibility to the goal.

The legacy program should have a separate governance structure. Appointing a senior-level director of legacy planning conveys the importance of long-term goals and drives planning. Senior leaders of the program should be held account-able for meeting legacy objectives. Similarly, the legacy program should be monitored and man-aged with the same rigor as the event program. By creating detailed measurement systems, host cities and nations can determine whether or not

Figure 3

The five components of a legacy program

Source: A.T. Kearney Key stakeholder support for building

a lasting legacy is crucial to planning and recruiting resources

Social and economic development

Stakeholder management

Leveraging event resources The legacy program must fit into

a wider national agenda for social and economic development

The legacy program is accomplished through knowledge transfer and funded using mega-event resources

Community mobilization Branding and sponsorship

Securing funding and support Pursuing the right initiatives

The legacy program can kick-start the process, but community leaders and citizens will drive lasting social change

With the right branding, the legacy program should be independently funded

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they are realizing the desired beneﬁts (see ﬁgure 4).

Consider the larger social and economic picture Every legacy program should be built around a nation’s larger social and economic framework. In other words, mega-events must ﬁt into a wider national agenda, and reﬂect the country’s longer-term development goals. For example, in South Africa, a public railway system between Johannesburg and Pretoria has been on the agenda for years; hosting the 2010 FIFA World Cup forced a clear deadline for completion.

Mega-events often become catalysts to spur large-scale development projects, which are espe-cially important for developing nations. Equally important are the social development projects. If devised in isolation and not as part of the national social agenda, they will often fail in the long term. For example, plans to use Olympic Villages as future public housing facilities have met with mixed results depending on how well organizers

coordinated with municipal planners who know where the facilities would have the biggest impact. Mobilize communities

Building a successful legacy depends on how well a nation or city mobilizes its citizens. Communities respond well to publicity, media efforts and cor-porate investments. Indeed, even the best pro-grams will fail without well-known, effervescent and energetic local people leading the way. South Africa has enjoyed a good deal of success with its event ambassadors program, in which prominent city ofﬁcials and high-proﬁle business leaders spearhead various committees and initiatives.

Yet the most effective mobilization efforts go beyond publicity to actively engage communities in identifying the social and economic programs that will have the biggest impact at a local level. While the mega-event serves as a cata-lyst to inject funds, attention and activity around various programs, local communities will take

Figure 4

Key metrics should be established for each stakeholder group

Sports organization Objectives Metrics

• Increase sport ture and participation • Raise profile of sports organization

• 15% increase in local sports clubs • Five substantial media articles addressing social responsibility

Objectives Metrics

• Spur economic growth • Increase employment • Attract tourists • Limit cost to taxpayers

• US$3.3 billion boost to economy

• 160,000 new jobs • 400,000 visitors • Fully funded by event revenues

• Obtain return on investment

• Build shareholder value • Raise corporate profile and brand image

• Double investment • 10% increase in holder value

• 40% increase in positive media mentions in event years

• Reduce poverty

• Increase employment • 10% decrease in poverty• 20% increase in ment in pre-event period, with no more than a 5% decline within five years after the event

Government

Private-sector sponsor Host city

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these programs forward to create the lasting legacy. Vancouver, for example, is working with commu-nity groups to build legacies in sports, arts, liter-acy and volunteerism in preparation for the 2010 Winter Olympics. Its “Playground to Podium” program is designed to introduce local communi-ties to the beneﬁts of lifelong physical activity. Leverage event resources

Who should pay for the legacy program? To a large extent, hosts can use existing event resources to support both event planning and legacy initia-tives. For example, corporate networks that begin with event sponsorships can be transformed into longer-term sponsorships that demonstrate a commitment to the region. The event infrastruc-ture can serve dual roles during and after the event while marketing for the mega-event can incorpo-rate messages that ﬁt the national branding strat-egy. And, as noted earlier, the inﬂux of skills and talented people required to stage a mega-event can be transferred into the local workforce. Build the national brand and increase sponsorships

A major element of a legacy program, particularly for emerging economies, is the global exposure that a mega-event offers. Making sure the message that the world receives is the right one requires a strong sense of brand—not just for the mega-event, but for the entire nation. Increasingly, the brand message must convey a social agenda in addition to the traditional commercial or

tour-ism elements. South Africa, for example, seeks to change how the world views not only South Africa but the African continent as a whole. Beijing is eager to appear on the world stage with positive associations. Actively managing the media and marketing activity before, during and after the event is necessary not only to prevent negative branding (remember “Hotlanta”) but to ensure that the national messages are broadcast properly.

With this in mind, rather than following the traditional method of funding a legacy program through a sponsorship budget, businesses can fund them via budgets for corporate social respon-sibility or social investment. “Social responsibil-ity” has long been considered a corporate duty, so smart hosts will encourage their business partners to capitalize on it to take advantage of the legacy investment opportunity.

Lasting Legacies

Hosts of mega-sporting events should no longer be satisﬁed with simply securing the tangible economic beneﬁts that such events provide. They can have so much more, from commu-nity enhancements to innovative additions to the educational system. The mega-event should not be viewed as a strategy on its own. Rather, it must be built into a nation’s social and economic devel-opment plan as a whole. By devoting the time and dedicating resources needed for planning and implementation, hosts can secure a positive future long after the event concludes. It is possi-ble, indeed vital, to leave behind a lasting legacy.

In the competition for scarce resources… sport must face up

to the challenge of justifying, in more tangible ways,

why

public money should be invested in it.

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A.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a unique combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO’s agenda. Today, we serve the largest global clients in all major industries. A.T. Kearney’s offices are located in major business centers in 35 countries.

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