Stakes high for 2012 Olympics host city
By Joyce Koh
July 5, 2005
The Business Times
(SINGAPORE) Tomorrow will bring joy for some - and heartbreak for others. After years of planning and campaigning, the race to host the 2012 Summer Olympic Games will end in a single moment in Singapore.
The world will be tuned in to Raffles City Convention Centre at about 7.30pm when International Olympic Committee president Jacques Rogge opens an envelope and announces one name - London, Paris, New York, Moscow or Madrid.
What awaits the winner is not only the pride of hosting the world's biggest sporting event but the billions of dollars of infrastructure investments and thousands of new jobs that go with it.
This is what has driven the bid leaders - London's Sebastian Coe, Paris's Philippe Baudillon, New York's Dan Doctoroff, Moscow's Valery Shanstev and Madrid's Feliciano Mayoral - and rallied their political leaders and sporting heroes behind them.
Certainly, being the playground for more than 10,000 athletes in seven years' time can be seen as a rubber-stamp of global approval.
No doubt it would be especially prized by Moscow, trying to overhaul its Socialist image. Or Madrid or New York, looking to overcome memories of recent terror attacks. Or London, which hasn't hosted the Olympics since way back in 1948.
But it's not just sentiment that's on the line. The expected economic boost from the Games is huge.
Already an US$866 million marketing deal with 11 major sponsors for the next four years until 2012 has been sewn up. That's a 31 per cent increase from the last Olympic cycle leading up to Beijing clinching the 2008 event. Then there's a television rights contract under which NBC-TV will pay US$1.2 billion to carry the 2012 Games - wherever they may be.
Some of the figures calculated for whoever takes the Olympic crown are eye-popping.
According to one study, if Paris wins, France will generate 5-6 billion euros (S$10-12 billion) a year and about 40,000 long-term jobs from 2005 to 2012. Arnaud Lagardere, chairman of the Paris 2012 Corporate Club, said yesterday: 'These 40,000 jobs are real jobs, long-term jobs, either in the sporting industry and in all the buildings that will be built over the seven years.'
As for New York, one estimate puts the gain at US$8 billion, and predicts that about 570,000 people per day would attend the Olympic events. 'It is President Bush's birthday on July 6 and I know what I'm going to get him,' Roland Betts, the president's representative for the New York Olympics delegation, said yesterday.
London has no doubts about the benefits of playing host, with Prime Minister Tony Blair and Mr Coe waxing lyrical about how the Games would benefit sectors from construction to catering. As Tessa Jowell, Britain's Secretary of State for Culture, Media and Sport, said yesterday: 'It would cost Londoners just 38 pence a week for the next six years - and the benefits far outstrip that.'
Indeed, the 1996 Atlanta Games supposedly earned US$165 million in tax revenue and stimulated more than US$4 billion of economic activity. And the 2000 Games in Sydney were said to have fuelled a US$1.8 billion development boom. Before that, Barcelona shot to prominence after the city was displayed to the world through the 1992 Olympics.
But capturing the event hasn't always turned out to be economic fun and games. After the party is over, the host could just be left with a big hole in its pocket - and stuck with huge sporting monuments that gather dust through the years.
Montreal's residents are still being charged an extra tax on tobacco that will finally pay the city's estimated US$1.23 billion deficit in 2006 - a full 30 years after Montreal hosted the 1976 Olympics.
And in Athens, taxpayers are having to meet huge maintenance bills for numerous specially-built 2004 Olympic venues as they wait for the government to lease them to private investors.
No doubt, the five cities locked in the red-hot race for 2012 have done their sums over and over to make sure their backs are covered when it comes to finance. And that's just as well, Because after tomorrow night, for one of them there will be no backing out.
With additional reporting by JEAN CHUA, JOSEPHINE TAY and LISA TAN
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