Legacy and The Olympics

Legacy And The Olympics
Love sport or hate sport, the Olympics have arrived. What will they mean for you, me and the broadcast sector, asks Peter Savage
The days might still be counting down but there is no doubt: the Olympics have arrived. The Olympic torch is being carried round the country, test events have taken place in Olympic arenas, and the first London Ambassadors’ pod (a hub for tourists) has opened on London’s South Bank. But, sitting here in broadcast world, it is worth asking if The Games will be a nation-changing event, like Sydney, or the start of a long road to bankruptcy, like Greece.
Boom or bust?
It is true that, in economic terms, the Olympics will bring a recession-breaking mini-boom that should dust away the cobwebs bringing economic growth in quarter three, thanks to an influx of tourists and the increased cash that will be spent throughout The Games.
If Team GB does well, and beats the number of gold medals it is expected to win, an extra feel-good factor will boost the UK economy – not unlike the unprecedented increase in output that followed England’s triumph in the 1966 World Cup. So good was that feel-good factor that Prime Minister Harold Wilson swept back into power for a second term, not unlike the 1983 Thatcher victory after the Falkland’s war. So, athletes, make sure you perform well because there is much to be gained short-term for the UK economy despite the woes of the Euro economy.
Back to the broadcast world and, yes, we have seen an increase in business – for cameras and EVSs for the Olympics; sound equipment for the Olympic torch relay; plasma screens for corporate hospitality; PA systems for the Diamond Jubilee (which will be over before we go to press); plus lenses and more camera channels for the Euros. These are some of the deals we have seen recently that we can attribute, as extra business, to these special events.
In my own business, we are seeing our best numbers since our business began and I know, from conversations with people in associated businesses, that we are back to the good pre-2007/8 times.
A dark cloud lurks
Yes, in the short-term there is a positive feel about the economy but – and there always is a but from me, a realist rather than a fantasist – there is a dark cloud lurking around most corners and that dark cloud is 2013.
Apart from having a 13 in the number (I am not superstitious and would happily volunteer to wear that shirt playing rugby, despite not playing in that position), 2013 will be payback time – and that really is the crux of this article: it is the start of the UK economy having to pay for our Olympic excesses.
I am a great believer in bringing the Olympics to the UK – as long as they arrive (it would have to be magically) when we are in the midst of 15 years of economic growth, not in the grip a double-dip recession. As Greece is proving, and Spain is fast re-iterating, you cannot repay your legacy when your economy is shrinking.
The UK economy has to grow sizeably in the next two or three years to be able to generate enough taxable income to pay for our Olympic legacy because, when the Games have finished, the money will still flow out because of the cost of converting, then running, East London’s infrastructure.
Odds and evens
Unfortunately, it is the same in the broadcast world. If you bought kit on the premise of a lucrative, short-term hire and find you are saddled with something that is seldom used, or means you have too much of one thing, then beware. 2013 is an odd year and that is not odd as in strange. Everyone in broadcast events knows that, in our industry, you make money in the even years and break-even in the odd years. However, if the economy shrinks, and the UK falls into a post-Olympic doldrums pulled by an ever-shrinking Eurozone which is being kept above water by an ever-isolated Germany, then beware: there may be trouble ahead.
The long term consequences
If I sound a bit ‘Bah, humbug!’ about the Olympics, it is simply that I am giving you a sage-like warning that, coming soon at the end of this year, we will have to manage a long-term repayment of debt (the money taken out for the Olympic legacy). If you have planned well and bought well then, excellent. But January and February 2013 will be far tougher than 2012 – and then will come The Ides of March (maybe I am superstitious after all).
No dramatic re-runs
In the meantime, sit back and enjoy what we have in the UK: a once in a lifetime season of sport and royal festivity – the Diamond jubilee, the Euros, Ascot, Henley, cricket, Wimbledon, polo, the Olympics, the Paralympics
My wife will not be happy because there is very little new drama on TV; instead, she will be watching repeats of New Tricks and Midsomer Murders but, hey, what a sporting line up we have. After that there will be payback…and not for having to watch drama re-runs.
If you would like advice on building a value-returning legacy in your business, do email me on peter.savage@azule.co.uk and/or write to the TV Bay editor. For more information about us, or to read other articles in this series, look at our website: www.azule.co.uk.