Friday, August 1, 2008
Fun, games and money
Beijing Olympic is a festival of sports, friendeship, and global business.... Sport has become a global business as well as a recreation for billions, says Patrick Lane (interviewed here). But how to make it faster, higher, stronger? EVEN in China, a century is a long time to wait. In 1908, as the fourth modern Olympic games took place in London, a magazine called Tianjin Youth posed three questions. When would a Chinese athlete take part in the games? When would the country send a team? And when would it stage the games? The answer to the first question turned out to be 1932, when Liu Changchun, a sprinter, made his way to Los Angeles from his home in north-eastern China, then under Japanese occupation. He won nothing, but is remembered as a hero. China sent teams to the Olympics in 1936, 1948 and 1952, but then stayed away until the winter games of 1980. Four years after that, when the summer games returned to Los Angeles, Xu Haifeng, a pistol-shooter, won China’s first gold medal. Now China has a full set of answers. The greatest sporting show on Earth is coming to Beijing, and the organisers are leaving nothing to chance. They have crammed as many lucky number eights into the arrangements as they sensibly could. The opening ceremony of the 2008 games will begin at 8.08pm on August 8th. When the Olympic flame is lit, China will be hoping for a 17-day festival of sport and international friendship. It sees the games as marking not just its re-emergence as a global economic force but also as a country that the rest of the world treats with admiration and respect. Lately China has come to view the flame as a bright light in a year of calamities, including heavy snow that caused chaos in January and February and an earthquake in Sichuan province in May that killed tens of thousands. It has, however, had less comforting connections with unrest in Tibet. Beijing is sure to get its festival of sport, with 10,700 competitors from more than 200 countries playing 28 sports. In September it will also play host to 4,000 athletes with disabilities, in the Paralympics. There are sure to be moments that raise the hairs at the back of the neck. With a bit of good fortune, one such moment could come on the first weekend of competition, when in a spanking new 18,000-seat basketball arena in west Beijing China’s men are due to take on the mighty United States. Fortune depends largely on Yao Ming’s left foot. Mr Yao is a sporting icon in China and also a star in America, where he plays for the Houston Rockets; at 2.29 metres (7’6”), he is the tallest player in the National Basketball Association (NBA), as well as one of the best. But he suffered a stress fracture in February and started playing again only in mid-July. China wants to be a great power in sport as well as in economics and international affairs. Ask Chinese officials whether they care about winning the most gold medals, and they will demur politely: winning, they say, isn’t everything. But winning does matter, as it does to Americans, Russians or Germans. Few will be surprised if China tops the medal table this time (see chart 1). Whether China gets its festival of friendship is another matter. Plenty in the West think China should not have been given the games at all. Its critics say it has done too little to elicit better behaviour from its nasty friends in places such as Myanmar and Sudan. They say, too, that China is cruel to dissidents and minorities at home, not least in Tibet, where unrest erupted just before the Olympic torch began its relay from Greece to Beijing. The relay—invigilated by burly Chinese minders—was met by protests in several cities, which angered the Chinese. The games in Beijing will not suffer a sporting boycott like those of 1956, 1976, 1980 and 1984. But some foreign leaders will stay away from the opening ceremony, and neither China nor the International Olympic Committee (IOC) can do anything to prevent criticism from abroad. Some athletes, too, may see the games as an opportunity for making a political protest, even though that is against Olympic rules. It has happened before. Festival of commerce However, the Olympics can also be seen as another sort of festival: of global business. True believers in the Olympic spirit might balk at this. There is no prize money on offer: athletes compete only for the glory of gold, silver and bronze. Most of them are thrilled just to be there. The IOC insists it is not a profitmaking body. And Olympic venues are free of the advertisements that encircle other sporting arenas. Yet commerce is more certain to be in the air than the Beijing smog. Olympians ceased to be amateurs long ago. Win a medal, and financial rewards will follow. Sporting federations will be keener to provide facilities, and corporate sponsors want to back winners. For companies, the games are a golden marketing opportunity. Sportswear manufacturers have no better showcase. For almost anyone selling anything, the Beijing Olympics are a chance to reach 1.3 billion people in an economy with double-digit growth, not to mention billions more watching around the world. The Olympics have 12 main sponsors, from Kodak, which backed the first modern games in 1896, and Coca-Cola, part of the show since 1928, to Lenovo, a Chinese computer company that signed up in 2005. For the four years to 2008, they are paying out a total of $866m in money, goods and services. In all, more than 60 companies, both Chinese and foreign, are sponsoring the games. “No multinational company bent on expanding into China or national company seeking to grow inside or outside China will miss out on the branding opportunity presented by the Olympics in Beijing,” according to Sir Martin Sorrell, chief executive of WPP, a giant advertising and marketing agency. Underpinning this festival of commerce is the symbiotic relationship between sport and the media. That still chiefly means television, but more and more people also follow sport on computers, BlackBerrys and mobile phones. Sport has clearly become a global business—but in fact it has been since long before “globalisation” was invented. International sport dates back to the 19th century, and the commercial exploitation of sport is even older than that. What is new is the degree of commercialisation and its spread to emerging markets. One sign is that capital is chasing sporting profit across borders. For example, nine of the 20 football clubs in the English Premier League last season were owned by foreigners. (The final count was eight: no amount of American cash could have saved Derby County from relegation.) One or two may be rich men’s playthings, but most have been bought for the media rights, ticket sales and merchandising. Another sign is the international integration of sport’s labour markets. Brazilian footballers, for instance, turn up in leagues from the Faroe Islands to Vietnam. Successful sportsmen and women are now earning sums that the stars of a generation ago could not have dreamed of. Money from broadcasters and sponsors inflates pay packets to eye-popping dimensions, especially when an attractive image meets sporting brilliance. Tiger Woods is as far ahead in earning power as he is on the golf course (see chart 2). http://www.economist.com/specialreports/displayStory.cfm?source=hptextfeature&story_id=11825627 Sport’s product markets, too, are becoming ever more global as Western businesses target the newly affluent in developing countries. And those developing economies, notably India in cricket, are creating powerful sports businesses of their own. Ambitious countries in Asia and the Gulf want their own tennis tournaments and Grand Prix. The old marriage of media and sport has proved durable because it is so mutually beneficial. What they both get out of it is eyeballs. The sports business is based on the idea that people are willing to pay to watch others play, and television expands the audience vastly, from thousands inside the stadium to millions outside. For broadcasters, more eyeballs mean more subscribers and advertisers. And sport is one of the few things that still has people tuning in by the million.