Country Focus: Czech Republic

Sport Business News

MEI takes a closer look at the Czech Republic, a country with a generally open economy – with few barriers to trade and investment – and a firm appetite for sport.

Business environmentThe Czech Republic is committed to the principles of free trade and maintains a generally open economy, with few barriers to trade and investment. Its membership of the European Union (EU) means that tariffs and standards, as well as most procedures, must conform to EU norms. However, as with all the former Eastern bloc countries, the Czech Republic still needs to be viewed as a transitional economy that is in the process of moving from a state–controlled, centrally–planned economy to one which is embracing a more Anglo–style capitalist model. Although it could be strongly argued that the Czech Republic has moved faster and more successfully in this direction than some of its neighbours, this does not mean that the transition is complete. UK exports of goods to the Czech Republic were worth £1. 5bn in 2008, making the Czech Republic the UK's 31st largest export market. Two–way trade between the two countries is worth around £5bn. The Czech Republic has been very successful at attracting foreign direct investment, running at twice per capita of any other country in the region. The UK has contributed 4% of this investment. One of the strongest legacies of the Czech Republic's former Soviet–style system relates to the issue of trust in the business environment. Czechs, it is argued, start from a level of deep distrust when they engage with a new contact. This mistrust can only be broken down through time, perseverance and proving to be a trustworthy associate. Therefore, one of the key messages when attempting to work with Czechs is the need for patience. Trying to do too much, too quickly could prove very counterproductive. Czechs are more reserved than their western counterparts, and will be nervous about a 'let's get down to business' approach. Cold–calls and hard sell tactics are viewed as amateurish, even rude. New entrants in the country need to start slowly by building a few initial good relationships. SportIn the Czech Republic, sport plays a significant part in the life of many Czechs who are generally loyal supporters of their favourite teams or individuals. The two leading sports in the Czech Republic are football and ice hockey, both drawing the largest attention of both the media and supporters. Other popular sports with professional leagues and structures include basketball, volleyball, handball, athletics and floorball. Sport is a source of strong waves of patriotism, usually rising several days or weeks before an event and sinking several days after. The major events considered the most important by Czech fans are: the Ice Hockey World Championship, Olympic Ice hockey tournament, the UEFA European Football Championships, the FIFA World Cup and qualification matches for such events. In general, any international match involving the Czech ice hockey or football national teams draws attention, especially when played against a traditional rival: Germany in football; Russia, Sweden and Canada in ice hockey; and Slovakia in both. Both summer and winter Olympic games are also very popular. On a governmental level sport falls under the auspices of the Czech Ministry of Education, Youth and Sports. On a non–governmental level, the Czech Sports Association (CSA), is the umbrella body for amateur sports clubs and leagues in the country. Comprising 93 sports federations and 9, 222 sports clubs, the CSA has more than 1. 5m members. The OlympicsCapital city Prague bid for the 2016 Summer Olympics. Prague's bid was considered a trial bid to warm up for future Olympic campaigns. Prague's bid came to an end on 4 June 2008, when it failed to make the Candidate city shortlist. After initial enthusiasm, Prague's bid became troubled, and the city considered cancelling its bid. Nevertheless, the government went forward with its bid to become an applicant city on 14 January 2008. This was the third try by Prague and the Czech Republic to host the Olympic Games. Previously Prague placed a bid for 1924 Summer Olympics that was won by Paris and planned a bid for 1980 Summer Olympics but the Warsaw Pact invasion and normalisation put an end to these plans; the Olympics were instead hosted by Moscow. The centre of the bid was planned to use a new $348m Olympic Stadium and the Olympic village to be financed with both private and public funds. Revenues from the Games were projected at $969m, down from the 2004 estimates. Per a 2004 study, the budget for the games was estimated to reach $7. 5bn and profit $1. 3bn. An additional $27bn would have been needed for infrastructure. A newer study indicated the government would spend $5. 03bn for the Games, of which $1. 4bn would be expected to come from the national budget. Infrastructure costs would require another $28bn. Politically, Prague's bid failed to garner widespread support from mayors of smaller towns who feared that the infrastructure investment in Prague would hamper investment in their regions. Czech President Václav Klaus questioned the bid, doubting the ability to bring profit to the country. A public opinion poll in October 2007 mustered a quite low 50% support rate. This was up 8% from an earlier poll in May 2007. Prague was considered to have been a long–shot given several factors, such as Prague's lack of stadia and other important Olympic sports infrastructure, wavering political support, funding issues, and as London was already hosting the 2012 Summer Olympics, the IOC was unlikely to award back–to–back Summer Olympic Games to the same continent, (although Madrid, Spain did advance to the shortlist). Prague acknowledged outright that this bid was a preparation for future bids. In June 2009, the Associated Press reported Prague would not enter the race for the 2020 Summer Olympic Games because of the global economic crisis. Prague city council voted 11–0 at that time to cancel preparations for the bid. The council took into account a report by PricewaterhouseCoopers that recommended the city used the funds needed for the Games to ease the effects of the global crisis. Major venues in PragueThe Great Strahov Stadium is a stadium in the Strahov district of Prague. The stadium is no longer in use for sports events; it is a training centre for football team Sparta Prague, and is used to host pop concerts. The stadium is sited on Petřín hill overlooking the old city. It can be accessed by taking the Petřín funicular up the hill through the gardens. The stadium is the largest in the world, and is the second largest sports facility worldwide after the Indianapolis Motor Speedway, seating around 220, 000. The Generali Arena (previously known as the AXA Arena) is a football stadium. It is the home venue of Sparta Prague and often the home stadium of the Czech Republic national football team. Originally known as Letná Stadium, then named after sponsors Toyota and then AXA, it is now named after its current sponsor, Generali. The first stadium on the place opened in 1921, the current stadium was built in 1969 and reconstructed 1994. It holds 20, 854 people. Synot Tip Arena (also known as Eden) is a football stadium. The stadium has a capacity of about 20, 800 people and it is the most modern football stadium in the Czech Republic.

Additional information