The London 2012 Olympics and monopolies

The signing up of exclusive sponsorship deals with major sporting events is not new. When you look at the 1970 World Cup footage (such as here) you’ll see advertising boards dotted around the stadium. Yet as pressures to put on bigger and better tournaments has led to ever rising costs, multinational corporations have sought to get greater and greater returns on their growing expenditure on advertising and sponsorship.

FIFA’s annual report for 2010 illustrates the scale of increased revenue it has gained over the past decade – just look at the growth of its reserves (from $76,000,000 in 2003 to $1,280,000,000 in 2010 – nice money if you can get it). The following page explains:

“In terms of event-related revenue of USD 3,890 million, USD 2,448 million was attributable to the sale of television rights, of which the lion’s share – USD 2,408 million – were for the 2010 FIFA World Cup South Africa™. The second-biggest source of income was the sale of marketing rights worth USD 1,097 million, of which USD 1,072 million was generated by the FIFA World Cup™. The sale of hospitality rights generated USD 120 million and licensing rights USD 71 million.”

Given the revelations of poor corporate governance in FIFA – something that the Prime Minister spoke out about and one that the Culture Media and Sport Select Committee held an investigation over (the report on which is here). In terms of the 2018 World Cup Bid, personally I don’t think England should have gone for it. My take is that on footballing pedigree alone, Russia was due a major international football tournament. I imagine there were others in the footballing world who felt the same, hence why outrage over the decision was more muted compared to the decision to award the 2022 World Cup to Qatar over Australia – with a number of social media users in the latter really going after FIFA such as Bonita Merciades who, along with the people behind ChangeFIFA have been doing splendid work.

The problem that plagues many a global institution is that membership will inevitably contain people who have strong links to regimes that are anything but open and democratic. While we have our problems in the UK on this front, we can’t really compare it to regimes of military dictatorships that carry out widespread human rights abuses. Yet people who are part of such regimes are inevitably appointed to posts within international organisations. Combine the impact this has alongside that other group of organisations that do not like transparency – multinational corporations – and you have a recipe for the corporate governance problems that we see with FIFA.

Fast forward to the 2012 Olympics through the kaleidoscope of the banking and economic crises. In the face of what’s been happening with the Occupy movements, will it be practical to enforce the VIP traffic lanes? [Legal disclaimer – this is not an incitement for people to block the roads or break the law]. Those of you who have or do live/work/commute in and around London will know that traffic is bad enough without such lanes. What will be the economic impact of such lanes on London’s economy? Is it really going to be worth taking the hit for the convenience of the international elite to shuttle between the department stores of Knightsbridge, the boutiques of Bond Street, the Park Lane hotels and the Olympic Park?

Then there is the ‘exclusive monopolies’ that big businesses have signed – where a few of them seem to be doing everything possible to make things inconvenient for as many people as possible in their desire to get yet more money. Are credit card users going to face restrictions because their issuer uses a brand that is not sponsoring the Olympics? Are mobile phone users going to find their services blocked because their provider is not an exclusive supplier? Because if the answer to those two questions is “Yes”, did any of our MPs or peers in the House of Lords think through the economic impact of these tie ups? The decision to go through a tendering process to secure sponsors for the Olympics is not the market in action when the very outcome of that tendering process actually destroys the functioning of a market and replaces it with a monopoly.

Anyway, the biggest sponsor of the Olympics is us – the tax payer. Where’s our advert? Where’s the slogan that says “London council tax payers – great people!”?!?

I’m not the biggest fan of intrusive advertising – as my experience of a test match testifies to. At what point will organisers, governments and sponsors realise that this level of advertising and control of who does what (and that’s just within the ‘sterile’ zones at venues) is actually more damaging to everyone when compared to any benefits gained? As far as the writer of this blog is concerned, such a level of advertising and control exercised by such firms and organisers isn’t going to make me want to buy their products or services; quite the opposite.


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