Economics of London Olympics

2. Case Study Presentation By
Ramkiran Nanduri

3.  Introduction
 Olympic Organizing Committee
 Economics of the games
 Past Olympic Games
 2012 Games Plan
 Ticketing
 Conclusion

4.  What does Olympic mean and how it born?
.It comes from the city-state Olympia that was in
ancient Rome. The Olympics were a celebration of
stopping wars to come together for the Olympics and
celebration of the god Zeus.
.When and where Olympic started and Played First?
The Modern Olympic Games first held in 1896 in
Athens, Greece. Total Participants were:241,Total
sports were 9 and games held between (6 - 15 April
1896) 10days.

5.  Can any one tell how many times Olympic
organised till date:
 26th time except 1916,1940 and 1944 because of world
War.

6.  Country Gold Silver Bronze
 USA 11 7 2
 Greece 10 17 19 (Highest medal
winner)
 Germany 6 5 2
 France 5 4 2
 Great Britain 2 3 2
 Hungary 2 1 3
 Austria 2 1 2
 Australia 2 0 0
 Denmark 1 2 3
 Switzerland 1 2 0
 Mixed Team 1 1 1

7. 1)Four rounds of voting done by the Members
of IOC held in Singapore ,117 IOC Session on
6july 2005.
2)Total 9 cities finally submitted Application.
3)Cities were
Paris(France)Leipzig(Germany),New
York(USA),Istanbul(Turkey),Havana(Cuba),Mos
cow(Russian Federation),London (Great
Britain),Spain and last Brazil.

8. Rounds 1 2 3 4
London 22 27 39 54
Paris 21 25 33 50
Madrid 20 32 31 -
New York 19 16 - -
Moscow 15
Result: London won by 4 votes.

9.  It will cover:
 The 80000-seat Olympic stadium for opening
and closing ceremonies and athletics.
 The 17500-seat Aquatics center –for
diving,swimming,and water polo.
 The 12000-seat London Velopark –for indoor
track cycling and outdoor BMX Cycling.
 12000- Seat basket ball arena.
 The 17000-bed Olympic Village.

10.  IOC (International Olympic Committee) is a non-profit
organization based in Lausanne , Switzerland
 Governed by 115 voting members And staffed by 150 full
time employees
 Provided contractual guidelines, managed copyrights,
trademarks and other assets
 IOC is Also responsible for negotiating and managing
broadcasting rights and international sponsorships while
OCOG(Organizing Committee For The Olympic Games) is
responsible for ticketing, domestic sponsorships and
domestic licensing

11. Source Organization Amount(in millions)
Responsible
Broadcast Rights IOC $1332
International IOC $405
Sponsorships Of
Games
Sydney OCOG $551
Ticketing To Games
Sydney OCOG $492
Domestic
Sponsorships Of
Games Sydney OCOG $52
Licensing Rights
Total $2832

12.  50% to 65% of the broadcasting rights and international
sponsorships went to OCOG
 OCOG is also associated with expenses of planning the games,
housing the athletes and running the events.
 OCOG employed several hundred individuals over the four to seven
years leading up and including the games

13. Source Approx. Amount(In Millions)
($)
Sydney Organizing Committee Of 2137
The Olympic Games
National Olympic Committee 321
International Federations 200
International Olympic Committee 173
Total $2832

14.  Revenues Generated for Broadcast Rights
2000 Sydney Games. $ $1,400
2,832 Millions $1,200 International
Sponsorship of
$1,000 Games
$800
Ticketing to
$600 Games
$400
$200 Domestic
Sponsorship of
$0 Games
Amount ( in
Millions)
Licensing Rights

15.  Allocation of Revenues Sydney
Organizing
from the Games. $ $2,500 Committee
2,832 Millions $2,000
National Olympic
Committees
$1,500
$1,000
International
$500 Federation
$0
Amount ( in
Millions) International
Olympic
Committee

16.  Using its allocations of the olympic revenues, the host
city OCOG had to plan for, organize & manage the 17
days of the game, all with in the contractual obligations
set forth by IOC.

17.  Staging the opening ceremony, closing ceremony &
sporting events.
 Arranging for required stadia, arenas, training
facilities & equipment.
 Housing & feeding the athletes & officials.
 Anticipating & solving potential transportation
problems
 Meeting the needs of the media.
 Providing security to ensure a safe & peaceful
olympics.

18. Infrastructure costs $ 2 billion for Sydney.
ranged for SYDNEY, $ 15 billion for Athens
ATHENS & BEIJING $ 40 billion For Beijing.

19. LONDON
OLYMPICS
2012 GAME PLAN

20.  London Olympics is an “Everybody Game”
 Stakeholders are 60 million British.
 Free Open Air Festivals before games.
 Large Screen TVs around UK.
 Preliminary Football Rounds at Glasgow,
Cardiff, Manchester, Brimingham and
Newcastle.
 Availability of tickets to all at a accessible
price.

21.  Initial Budget in 2004 : £2 billion
 Revised Budget in 2007 : £3 billion
◦ £560 m two new venues (including £250 m for the
Olympic Stadium).
◦ £650 million for the Olympic village.
◦ £1.5 billion to run the Games.
◦ £200 million on security.
Current Estimates in 2011 : £9 billion

22. Projected revenue : £ 3.75 billion
 £1.5 billion from a special Olympic National Lottery.
 £625 million from a council tax surcharge of £20
per year for London households.
 £560 million from IOC television and marketing
deals.
 £450 million from sponsorship and official
suppliers.
 £300 million from ticket sales.
 £250 million from the London Development Agency.
 £60 million from licensing.

23. Expenditure in $ Mil
2000
Olympic Park
6000 Transportation
Misc
4000

24. Funding %
5
20
National taxes
London Taxes
National Lottery
Misc
60
15

25. Revenue million
Olympic National
Lottery
£250 £60
£300 Council tax
£1,500.00 IOC Broadcasting
£450
£560 Sponsorship
£625
Ticket sales
London Development
Agency

26. Total Expenditure (Billion USD)
35
30
25
20
15
10 Total
Expenditure
5 (Billion USD)
0
Athens Beijing (Estimated) London (Projected)
2004 2008 2012

27. 350
300 302 301
300
250
204
205 201
200
2012 london
150 125 112
106 2008 Beijing
100
2004 Athens
50 26 28 28
0
Nations Sport Events Athelets
(X 100)

28. BROADCAST REVENUE (MILLION USD)
2000
1800
1600
1400
1200
1000
800
600
400
Broadcast
200
0
Revenue…
Sydney
Seoul
Atlanta
Beijing
Athens
Barcelona
Los Angeles
1984 1988 1992 1996 2000 2004 2008

29. INTERNATIONAL SPONSORS
700 REVENUES
606
600
500 464
405
400
300
200
195 No of Sponsers
120
100 67
9 12 10 11 11 12
0
Seoul
Athens
Sydney
Barcelona
Atlanta
Beijing
1988 1992 1996 2000 2004 2008

30. 12
10
8
6
4 Tickets availabe for sale
(in millions)
2
Tickets sold (in millions)
0
Sydney
Barcelona
Seoul
Atlanta
Athens
Beijing
Los angeles
Ticket Revenue (in
100 millions)
1984 1988 1992 1996 2000 2004 2008

31.  Total 33 Venues
 New Olympic Park – East London
 By Developing 500 acre existing industrial
and waste land to include:-
◦ 80,000 Seat Olympic Stadium
◦ 17,500 Seat Aquatic Center
◦ 12,000 Seat London Velopark
◦ 12,000 Seat Basketball Arena
◦ 15,000 Seat Olympic Field Hockey Center
◦ 17,000 Bed Olympic Village

32. Sport: Athletics & Paralympic
Athletics
Location: In the south of the
Olympic Park
Permanent or temporary: Permanent
Number of events: 208
Status : Construction completed
& Turf laid in Nov 11.
Cost : £760m
Utility After Ganes : Venue for
sports, athletics, as well
as cultural & community
events.

33. Cost : £268m
Sport: Diving, Swimming & Modern Pentathlon
Location: South-east corner of the Olympic Park
Permanent or temporary: Permanent
Number of events: 192
Status : Construction completed in July 2011.
Utility After Ganes : Venue for sports, athletics, as well
as cultural & community events.

34. Sport: Basketball ,Wheelchair Rugby
& Handball (Finals).
Location: In the north of the Olympic
Park
Permanent or temporary: Temporary (re-
useable)
Number of events: 7
Cost :£42 m Status : Construction completed in
Jun 11.
Utility After Ganes : relocated elsewhere
in the UK

35. Cost : £44 m
Sport: Handball, Goalball & Modern Pentathlon
Location: west of the Olympic Park
Permanent or temporary: Permanent
Number of events: 6
Status : Construction completed in July 2011.
Utility After Ganes : Sports, health and fitness club
with changing facilities

36. Cost : £105 m
Sport: Track Cycling & Paralympic Track Cycling
Location: North of the Olympic Park
Permanent or temporary: Permanent
Number of events: 28
Status : Construction completed in Feb 2011.
Utility After Games : The facility will be owned, funded and run by
the Lee Valley Regional Park Authority.

37. Sport: Hockey & Paralympic Football
Location: Olympic Park
Permanent or temporary: Temporary
Number of events: 4
Status : Construction completed in Oct 2011.
Utility After Games : The facility will be moved north to Eton Manor.

38. Sport: Canoe & Slalom
Location: 30km north of the Olympic Park
Permanent or temporary: Permanent
Number of events: 4
Status : Opened to Public since Spring 2011.
Utility After Ganes : It will be owned, funded and managed
by Lee Valley Regional Park Authority.

39. Capacity: 17,000 Beds
Location: Olympic Park
Permanent or temporary: Permanent
Developer : Qatari Diar and British
developer Delancey to
manage East Village.
Utility After Games : Will be called
Cost :£557m
East Village and become
home to 3,600 families
from 2013.

40.  Travel of 100% of ticketed
spectators by Public
Transport”
 Upgradation of East London
connectivity.
 12 Car Subway shuttle
“Olympic Javelin”
 Price of ticket to include
public transportation.
 240,000 passengers/ hour
into/out Olympic Park.

41. Ten public transport lines
feeding into Stratford.
Representing the capability
of a train arriving in the area
every 15 seconds.“
 Expenditure for expansion
£1.4bn.
395 trains services.
29 Hitachi six-car electric
multiple units capable of
140mph (225km/h)

43.  Ticketing revenue (650 m out of 3 billion
(21%)) excl exp on infra by ODA
 Comparison to other sporting events
◦ Man Utd over the season earnings $ 150 million
◦ NY yankees $ 120 milliion

44.  Previous experience from other Olympics
◦ 2004 Athens - small size of city, limited capacity
of venues
◦ 2008 Beijing - artificially low prices
◦ 2000 Sydney - large city, sports loving country

45. How can the Head of Ticketing for the 2012
London Olympics reconcile the diverging needs?
He is expectsed to sell $650 million worth of
tickets, yet the stadia need to be filled and any
decision has to be accepted as fair by the
public…
 Maximize revenues
 Maximize attendance at all venues and dates
 Fill the seats with knowledge spectators
 Ensure tickets for the average Londoner

46.  Culture and atmosphere of the city
 Location of city affects the reach
◦ Beijing, London
 Internet ticketing
 Global financial crisis

47.  Beijing experience
◦ Tickets sold to sponsors, IOC staff, media may go
unused
◦ Spectators purchase tickets for day long events but
attend only few hours
◦ People buy tickets as souvenirs with no intention to
attend
◦ Availability to convenient transport

48.  Max revenues are generated by broadcast
rights. $1.7 billion for the beijing games.
 Broadcast rights and international
sponsorships are controlled by IOC.
 The locog has control over the ticketing
revenues, the domestic sponsorships, and the
licensing (merchandising).
 Ticketing revenues fluctuate in a well-defined
bandwidth, with price being highly variable,
 The inventory of available seats is mostly
fixed.

49.  Beijing saw a lot of short attention-span
spectators, who would leave their seats after a couple
of hours or a couple of events.
 Beijing authorities bussed in „artificial‟ spectators
 Other budgeted „other events‟, set to amount to
365,000 seats? Maybe some creative events could
boost that number? Or maybe even extend the closing
ceremony to two days?
 Although Beijing was far from ticket revenue
maximization, it did manage to sell out the entire 6.8
million stock of tickets, something no other Olympic
game has done since the 1984 los Angeles.


50.  Ticket revenue is a complex equation with several tiers.
◦ At the top are corporate tickets, typically
accompanied by special facilities and access.
◦ At the bottom are simple limited-event tickets.
◦ The opening and closing ceremonies are the
blockbusters: held in the biggest venues, fetching the
fattest prices, and certain to sell out.
 Historically, prices vary from just below $1000 to less
than $5

51.  80% of olympics tickets are expected to be sold in
the UK
 The remaining 20% of tickets are predicted to be
sold internationally.
 Experience of previous games is that
◦ majority of attenders come from within 1 hour‟s travel
time;
◦ Most will be day visitors, but some will stay over.
 Top countries will be the
us, canada, australia, france, germany, netherlands
, japan (the pattern mirrors normal london
tourism.)

52.  Most spectators will see 1 - 3 events over 2 - 3
days, giving ample opportunity for
entertainment in between sports fixtures
 Some will stay for the evening
 Availability of late-night transport will have an
impact
 The 100m men's final is on a Sunday evening,
as is the closing ceremony;
 The opening ceremony is a Friday evening.

53.  Tickets need to be affordable and
accessible to as many people as possible.
 The ticketing plans have the clear aim of
filling venues to the rafters.
 All tickets for events in and around london
to include a travel card.

54.  Head of ticketing – Paul Williamson
 Mechanics at these games
◦ 8 million tickets to 26 sports over 17 games
◦ The tickets were priced from $10 to $ 100
◦ 75% of these tickets will be on sale to the public from
March 2011
◦ 66% of these tickets will be priced at £50 or under
◦ 90% of these tickets will be priced at £100 or under
◦ 31% (2.5 million tickets )will be priced at £20 or under
◦ Ticket allotment was to be regulated by a matching
process of demand vs availability
◦ In case of oversubscription for a particular type lottery
system was to be followed

55.  Out of the 8.8 million tickets available 25%
tickets to be allotted to 205 national Olympic
committees, federations and IOC affiliates –
on request basis(by late 2010) and full
payment
 By summer of 2011 both would be processed
and informed of allotment
 Remaining tickets to be offered for direct sale

56.  Easy sells – opening and closing
ceremony, track & field
finals, swimming,gymnastics
◦ Demand exceed supply
◦ Will sell at any price
◦ Expected revenue 40 %
 Football
◦ Most popular sport on earth
◦ 2 million tickets, expected revenue 10%
◦ Constrained by absence of big stars due to age factor
 Hard sells – all other sports
◦ Supply exceeds demand
 Targets set
◦ Sell 85 % seats

57.  Willingness to pay depends on
◦ Comparison with other sporting events
in the area
◦ Global appeal of the sport
◦ Local appeal
◦ Stage of the event
◦ Particular athlete or team

62.  LONDON 2012 TICKETSHARE„ which will see
many thousands of school children receiving
tickets to the games.
 London 2012 „get set‟ programme.100,000
tickets to be donated to schools in London
and around the UK via the London 2012 get
set education network
 'PAY YOUR AGE' scheme will operate for over
200 Olympic games sessions. This will see
anyone who is 16 and under at the start of the
games pay their age – and anyone over the
age of 60 pay £16. (1.3million tickets)

63.  The london 2012 'sign up' programme over
1.7 million people have signed up and are
receiving news and discount ticket offers
for sporting events.
 London 2012 will have more tickets on sale
for disabled people than any previous
olympic games.

64.  Out of the 2.5 m cheap tickets 1 m are for football
matches, a sport not associated with the Olympics by
many.
 Londoners around the Olympic park have been living
on a building site and have not got any concessions.
 "There has not been enough done for Londoners to
enjoy a once-in-a-lifetime chance to watch the
Olympic games.
 Neale Coleman, the mayor of London's Olympic
advisor, defended locog's strategy he said: "locog have
to strike a balance with accessibility and affordability
while raising a large amount of revenue.
 "They have increased the number of tickets available
and that has enabled a more affordable package to be
made available.

66.  The budget for the London 2012 Olympic and
paralympic games.
 Sport and Society : The summer olympics though
the lens of social science.
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