Case Study Presentation ByRamkiran Nanduri
   Introduction   Olympic Organizing Committee   Economics of the games   Past Olympic Games   2012 Games Plan   Tic...
   What does Olympic mean and how it born?.It comes from the city-state Olympia that was inancient Rome. The Olympics wer...
   Can any one tell how many times Olympic    organised till date: 26th time except 1916,1940 and 1944 because of worldW...
   Country         Gold Silver Bronze   USA             11   7      2   Greece          10   17     19 (Highest medal  ...
1)Four rounds of voting done by the Members of IOC held in Singapore ,117 IOC Session on 6july 2005.2)Total 9 cities final...
Rounds     1     2    3    4London     22    27   39   54Paris 21 25      33   50Madrid     20    32   31   -New York 19  ...
   It will cover:   The 80000-seat Olympic stadium for opening    and closing ceremonies and athletics.   The 17500-sea...
   IOC (International Olympic Committee) is a non-profit    organization based in Lausanne , Switzerland   Governed by 1...
Source               Organization   Amount(in millions)                     ResponsibleBroadcast Rights     IOC           ...
   50% to 65% of the broadcasting rights and international    sponsorships went to OCOG   OCOG is also associated with e...
Source                            Approx. Amount(In Millions)                                            ($)Sydney Organiz...
   Revenues Generated for                          Broadcast Rights    2000 Sydney Games. $     $1,400    2,832 Millions ...
   Allocation of Revenues                          Sydney                                                    Organizing  ...
   Using its allocations of the olympic revenues, the host    city OCOG had to plan for, organize & manage the 17    days...
   Staging the opening ceremony, closing ceremony &    sporting events.   Arranging for required stadia, arenas, trainin...
Infrastructure costs   $ 2 billion for Sydney.ranged for SYDNEY,      $ 15 billion for AthensATHENS & BEIJING        $ 40 ...
LONDON  OLYMPICS2012 GAME PLAN
   London Olympics is an “Everybody Game”   Stakeholders are 60 million British.   Free Open Air Festivals before games...
 Initial Budget in 2004 : £2 billion Revised Budget in 2007 : £3 billion    ◦ £560 m two new venues (including £250 m fo...
Projected revenue : £ 3.75 billion   £1.5 billion from a special Olympic National Lottery.   £625 million from a council...
Expenditure in $ Mil       2000                          Olympic Park                   6000   Transportation             ...
Funding %      5 20                      National taxes                      London Taxes                      National Lo...
Revenue million                                      Olympic National                                      Lottery       £...
Total Expenditure (Billion USD)353025201510                                                     Total                     ...
350                                   300   302   301300250            204      205         201200                        ...
BROADCAST REVENUE (MILLION USD)200018001600140012001000800600400                                                          ...
INTERNATIONAL SPONSORS700          REVENUES                                                                 606600500     ...
1210 8 6 4                                                                           Tickets availabe for sale            ...
   Total 33 Venues   New Olympic Park – East London   By Developing 500 acre existing industrial    and waste land to i...
Sport:      Athletics & Paralympic                           Athletics               Location:   In the south of the      ...
Cost : £268mSport:      Diving, Swimming & Modern PentathlonLocation:   South-east corner of the Olympic ParkPermanent or ...
Sport:      Basketball ,Wheelchair Rugby                          & Handball (Finals).              Location:   In the nor...
Cost : £44 mSport:      Handball, Goalball & Modern PentathlonLocation:   west of the Olympic ParkPermanent or temporary: ...
Cost : £105 mSport:       Track Cycling & Paralympic Track CyclingLocation:    North of the Olympic ParkPermanent or tempo...
Sport:       Hockey & Paralympic FootballLocation:    Olympic ParkPermanent or temporary: TemporaryNumber of events: 4Stat...
Sport:      Canoe & SlalomLocation:   30km north of the Olympic ParkPermanent or temporary: PermanentNumber of events: 4St...
Capacity:   17,000 Beds              Location:   Olympic Park              Permanent or temporary: Permanent              ...
   Travel of 100% of ticketed    spectators by Public    Transport”   Upgradation of East London    connectivity.   12 ...
Ten public transport linesfeeding into Stratford.Representing the capabilityof a train arriving in the areaevery 15 seco...
   Ticketing revenue (650 m out of 3 billion    (21%)) excl exp on infra by ODA   Comparison to other sporting events   ...
   Previous experience from other Olympics    ◦ 2004 Athens - small size of city, limited capacity      of venues    ◦ 20...
How can the Head of Ticketing for the 2012London Olympics reconcile the diverging needs? He is expectsed to sell $650 mill...
 Culture  and atmosphere of the city Location of city affects the reach  ◦ Beijing, London Internet ticketing Global f...
   Beijing experience    ◦ Tickets sold to sponsors, IOC staff, media may go      unused    ◦ Spectators purchase tickets...
   Max revenues are generated by broadcast    rights. $1.7 billion for the beijing games.   Broadcast       rights      ...
   Beijing   saw     a   lot   of    short      attention-span    spectators, who would leave their seats after a couple ...
   Ticket revenue is a complex equation with several tiers.    ◦ At the top are corporate tickets, typically      accompa...
    80% of olympics tickets are expected to be sold in    the UK    The remaining 20% of tickets are predicted to be    ...
    Most spectators will see 1 - 3 events over 2 - 3    days, giving ample opportunity for    entertainment in between sp...
   Tickets need to be affordable and    accessible to as many people as possible.   The ticketing plans have the clear a...
   Head of ticketing – Paul Williamson   Mechanics at these games    ◦ 8 million tickets to 26 sports over 17 games    ◦...
   Out of the 8.8 million tickets available 25%    tickets to be allotted to 205 national Olympic    committees, federati...
   Easy sells – opening and closing    ceremony, track & field    finals, swimming,gymnastics    ◦ Demand exceed supply  ...
 Willingness   to pay depends on ◦ Comparison with other sporting events   in the area ◦ Global appeal of the sport ◦ Loc...
   LONDON 2012 TICKETSHARE„ which will see    many thousands of school children receiving    tickets to the games.   Lon...
   The london 2012 sign up programme over    1.7 million people have signed up and are    receiving news and discount tic...
   Out of the 2.5 m cheap tickets 1 m are for football    matches, a sport not associated with the Olympics by    many. ...
   The budget for the London 2012 Olympic and    paralympic games.   Sport and Society : The summer olympics though    t...
London olympics 2012
London olympics 2012
London olympics 2012
London olympics 2012
London olympics 2012
London olympics 2012
London olympics 2012
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London olympics 2012

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Economics of London Olympics

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London olympics 2012

  1. 1. Case Study Presentation ByRamkiran Nanduri
  2. 2.  Introduction Olympic Organizing Committee Economics of the games Past Olympic Games 2012 Games Plan Ticketing Conclusion
  3. 3.  What does Olympic mean and how it born?.It comes from the city-state Olympia that was inancient Rome. The Olympics were a celebration ofstopping wars to come together for the Olympics andcelebration of the god Zeus. .When and where Olympic started and Played First?The Modern Olympic Games first held in 1896 inAthens, Greece. Total Participants were:241,Totalsports were 9 and games held between (6 - 15 April1896) 10days.
  4. 4.  Can any one tell how many times Olympic organised till date: 26th time except 1916,1940 and 1944 because of worldWar.
  5. 5.  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
  6. 6. 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.
  7. 7. Rounds 1 2 3 4London 22 27 39 54Paris 21 25 33 50Madrid 20 32 31 -New York 19 16 - -Moscow 15Result: London won by 4 votes.
  8. 8.  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.
  9. 9.  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
  10. 10. Source Organization Amount(in millions) ResponsibleBroadcast Rights IOC $1332International IOC $405Sponsorships OfGames Sydney OCOG $551Ticketing To Games Sydney OCOG $492DomesticSponsorships OfGames Sydney OCOG $52Licensing RightsTotal $2832
  11. 11.  50% to 65% of the broadcasting rights and international sponsorships went to OCOG OCOG is also associated with expenses of planning the games, housing the athletes and running the events. OCOG employed several hundred individuals over the four to seven years leading up and including the games
  12. 12. Source Approx. Amount(In Millions) ($)Sydney Organizing Committee Of 2137The Olympic GamesNational Olympic Committee 321International Federations 200International Olympic Committee 173Total $2832
  13. 13.  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
  14. 14.  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
  15. 15.  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.
  16. 16.  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.
  17. 17. Infrastructure costs $ 2 billion for Sydney.ranged for SYDNEY, $ 15 billion for AthensATHENS & BEIJING $ 40 billion For Beijing.
  18. 18. LONDON OLYMPICS2012 GAME PLAN
  19. 19.  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.
  20. 20.  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
  21. 21. 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.
  22. 22. Expenditure in $ Mil 2000 Olympic Park 6000 Transportation Misc4000
  23. 23. Funding % 5 20 National taxes London Taxes National Lottery Misc 6015
  24. 24. Revenue million Olympic National Lottery £250 £60£300 Council tax £1,500.00 IOC Broadcasting£450 £560 Sponsorship £625 Ticket sales London Development Agency
  25. 25. Total Expenditure (Billion USD)353025201510 Total Expenditure 5 (Billion USD) 0 Athens Beijing (Estimated) London (Projected) 2004 2008 2012
  26. 26. 350 300 302 301300250 204 205 201200 2012 london150 125 112 106 2008 Beijing100 2004 Athens50 26 28 28 0 Nations Sport Events Athelets (X 100)
  27. 27. BROADCAST REVENUE (MILLION USD)200018001600140012001000800600400 Broadcast200 0 Revenue… Sydney Seoul Atlanta Beijing Athens Barcelona Los Angeles 1984 1988 1992 1996 2000 2004 2008
  28. 28. INTERNATIONAL SPONSORS700 REVENUES 606600500 464 405400300200 195 No of Sponsers 120100 67 9 12 10 11 11 12 0 Seoul Athens Sydney Barcelona Atlanta Beijing 1988 1992 1996 2000 2004 2008
  29. 29. 1210 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
  30. 30.  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
  31. 31. 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.
  32. 32. Cost : £268mSport: Diving, Swimming & Modern PentathlonLocation: South-east corner of the Olympic ParkPermanent or temporary: PermanentNumber of events: 192Status : Construction completed in July 2011.Utility After Ganes : Venue for sports, athletics, as well as cultural & community events.
  33. 33. Sport: Basketball ,Wheelchair Rugby & Handball (Finals). Location: In the north of the Olympic Park Permanent or temporary: Temporary (re- useable) Number of events: 7Cost :£42 m Status : Construction completed in Jun 11. Utility After Ganes : relocated elsewhere in the UK
  34. 34. Cost : £44 mSport: Handball, Goalball & Modern PentathlonLocation: west of the Olympic ParkPermanent or temporary: PermanentNumber of events: 6Status : Construction completed in July 2011.Utility After Ganes : Sports, health and fitness club with changing facilities
  35. 35. Cost : £105 mSport: Track Cycling & Paralympic Track CyclingLocation: North of the Olympic ParkPermanent or temporary: PermanentNumber of events: 28Status : Construction completed in Feb 2011.Utility After Games : The facility will be owned, funded and run by the Lee Valley Regional Park Authority.
  36. 36. Sport: Hockey & Paralympic FootballLocation: Olympic ParkPermanent or temporary: TemporaryNumber of events: 4Status : Construction completed in Oct 2011.Utility After Games : The facility will be moved north to Eton Manor.
  37. 37. Sport: Canoe & SlalomLocation: 30km north of the Olympic ParkPermanent or temporary: PermanentNumber of events: 4Status : Opened to Public since Spring 2011.Utility After Ganes : It will be owned, funded and managed by Lee Valley Regional Park Authority.
  38. 38. 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 calledCost :£557m East Village and become home to 3,600 families from 2013.
  39. 39.  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.
  40. 40. Ten public transport linesfeeding into Stratford.Representing the capabilityof a train arriving in the areaevery 15 seconds.“ Expenditure for expansion£1.4bn.395 trains services.29 Hitachi six-car electricmultiple units capable of140mph (225km/h)
  41. 41.  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
  42. 42.  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
  43. 43. How can the Head of Ticketing for the 2012London Olympics reconcile the diverging needs? He is expectsed to sell $650 million worth oftickets, yet the stadia need to be filled and anydecision has to be accepted as fair by thepublic… Maximize revenues Maximize attendance at all venues and dates Fill the seats with knowledge spectators Ensure tickets for the average Londoner
  44. 44.  Culture and atmosphere of the city Location of city affects the reach ◦ Beijing, London Internet ticketing Global financial crisis
  45. 45.  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
  46. 46.  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.
  47. 47.  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.
  48. 48.  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
  49. 49.  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.)
  50. 50.  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 mens final is on a Sunday evening, as is the closing ceremony; The opening ceremony is a Friday evening.
  51. 51.  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.
  52. 52.  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
  53. 53.  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
  54. 54.  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
  55. 55.  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
  56. 56.  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)
  57. 57.  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.
  58. 58.  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 Londons Olympic advisor, defended locogs 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.
  59. 59.  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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