Sports Event Bidding

Sport Business News

The exponential growth over the last two decades in the number of cities, venues and nations bidding to host sporting events has not occurred in isolation, writes David Walmsley, author of Sports Event Bidding.

Rather it both reflects and is driven by a widening awareness of the benefits a major sporting event can bring to its host, and of the varied nature of those benefits. Such a landscape promotes diversity among bidders to the point that any number of prospective hosts for a given event could each have a different motive for its pursuit. However, the range of advantages event hosting is now seen to offer also creates a pressing need for clarity from the outset of the bidding journey. It has never been more important to establish quickly and decisively why you want that event and then to communicate that motivation in a manner that secures buy–in from both the stakeholders who will support the bid and the international federation or property owner that dispenses the hosting rights. As Mike Lee, CEO of campaign communications consultancy Vero Communications and the former director of public affairs and communications for London's successful 2012 Olympics bid, advised: "From a bidder's point of view, the golden rule is know why you're bidding and make that offer clear. Sometimes you see bids emerging and wonder why they are bidding. It's important to know the answer to that and show what you're offering to a rights holder. Ask not just what the event can bring to you, ask what you can bring to the event. "And while all motives are valid, some are more so than others, particularly in the beauty contest of a bidding campaign. Lisa Delpy Neirotti, associate professor of sports management at George Washington University, Washington DC, observed: "As well as knowing your objective you have to make sure you have picked the right one. London doesn't need exposure and it has enough events, so the aim of the Olympic bid had to be to create a platform to rebuild an area of the city. New York bid for the Olympics because it wanted to build a facility and hosting the games would have been a huge reason to build the new Jets' stadium in Manhattan. But they got the money elsewhere so that's why they didn't bid again – we don't need you now!"So, in establishing the basis of a bid, the first challenges for any potential host are to:• Identify clearly what it aims to achieve through hosting • Ensure those goals are in line with the ambitions of its stakeholders and/or (preferably and) the awarding body • Be certain the benefits of bidding – which may be distinct from those of actually hosting–outweigh the inevitable disincentives that exist on the other side of the coin. Common motives for biddingAlthough the motive for bidding for an event can be as straightforward as wanting to bring to a town or city a sport in which there is keen local interest, a majority of bidders are now attracted by the wider benefits hosting can bring beyond the thrill of experiencing the event itself. Economic and political motives are the easiest to identify and communicate, whereas bidders with seemingly 'nothing to prove', or who may not be an obvious match with the event they are pursuing, may have to work harder at justifying their rationale to their stakeholders and the awarding body. This is not to say that the motives of the last two groups are any less valid than those of the first two. Nor do they diminish their prospects of success, or limit their ability as actual hosts. Among the mis–matched bids, for example, whilst the logistical and administrative difficulties of hosting a major event across nine countries may have impacted on the success of the 2007 Cricket World Cup, Doha's 2006 Asian Games proved the point the bidding committee set out to make: that a small nation with a lack of spectator–sports experience can still host a mega–event as well as any of the sporting world's established powers. Whilst having a strong primary motivation undoubtedly aids the clarity of a bidder's offering, it is not uncommon for hosting ambitions to be driven by a number of factors. The Doha Asian Games bid was typical of many in this regard. While, on one level, its desire to prove itself as a major host was in preparation for a bid for the 2016 Olympic Games, on another it was part of a much broader effort to diversify its economy away from dependence on the finite resources of oil. It sought to do this partly through developing a sports sector and also by using sport to promote the state as a centre for business and tourism. Economic motivesIn 1976, as the Montreal Olympic Games landed the city with a debt that took three decades and $2bn (mostly in interest) to pay off, the notion that anyone would consider hosting a sports event for economic gain was not a popular one. However, this viewpoint overlooked the fact that Montreal actually made an operating profit on the Games. Once Los Angeles and Seoul had avoided the construction budget over–runs that crippled the Canadian Olympiad, to turn profits of $200m and $288m respectively, hosting was back on the economic agenda. The 1984 and 1988 Games opened a window on the direct economic impact that can make hosting worthwhile. In 1992 Barcelona threw open a door to a whole new landscape of economic regeneration. That year's Games made only a modest $5m profit but bequeathed far more in the longer term by redeveloping key areas of the city. So any economist bidder must assess whether they are prioritising short–term benefits or long–term ones, albeit that these are by no means mutually exclusive. Short–run gains are most likely to be sought in additional:• Employment• Visitor numbers• Income, or• Tax revenues. Those for the long run would include:• Urban regeneration• Infrastructure improvements• Inward investment• Workforce development• Inter–cultural exchange• Creation of a hosting sector, or• Development of sports tourism. Short–term benefits accrue directly from the staging of the event and therefore do so primarily during the build–up to and hosting of the event before tailing off sharply afterwards. They stem predominantly from visitor and participant spend during the event and through investment in the construction of facilities and infrastructure beforehand. Long–term benefits are, by definition, less immediately apparent and can vary according to the type of event hosted. One–off hosting of mega events, such as major Games editions or world championships, are seen as having greatest potential as a catalyst for regeneration or large–scale infrastructure projects, while hosting an annual event on a major tour can make a more significant contribution to the development of an event–hosting economy within a city. For example, Melbourne's staging of regular events such as the Australian Open tennis championships, the Melbourne Cup horse race, the Australian Grand Prix etc. has contributed to sustained annual growth of five per cent in the city's sport and recreation industry over the last decade. For the majority of bidders for major events, however, the likelihood is that only the long–term benefits can generate the returns needed to justify the cost of staging a major event, unless facilities and infrastructure are already in place as part of a permanent hosting sector, as exists in Melbourne for example. There is now a broad school of thought convinced that these costs almost invariably exceed the direct and indirect economic benefits of staging. For example, whilst Glasgow expects the 2014 Commonwealth Games to pump £107m into the Scottish economy, the event is also projected to cost £288m to stage. The onus is therefore on events to create more indirect benefits by either contributing to a wider programme of regeneration or kick–starting the local economy into a cycle of dynamic growth. About Sports Event BiddingThe above is an extract from the SportBusiness International Intelligence Report, Sports Event Bidding, written by David Walmsley. Sports Events Bidding is essential reading for all those responsible for bringing sports games and competitions to their city, region or country. Use this report and:Refine your bidding aspirations and strategySelect target events that you can bring home to your townPosition sports event bidding at the heart of your plans to bring economic prosperity to your regionWin event competitions and bring tourist and business revenues to your cityGain extra use from your stadium or venue by attracting sports competitionsThe report is also an invaluable guide for International Federations looking to stage international events and commercial organisers or tours and circuits. By using comparative case examples it will help you run more successful bidding competitions, generate more interest in your events and raise the value of hosting them. Special offer for MEI readersSportBusiness is pleased to offer a £100 discount to any MEI readers if they purchase Sports Event Bidding. To take advantage of this offer, please call +44 (0) 20 7954 3807 and quote '09I134/01' or go to www. sportbusiness. com/meibidding and order online.

Additional information