Vancouver 2010 Olympics - Essay Example

Vancouver Olympics: Outline: Introduction Bid History Initial Cost of Vancouver's Bid Contributing Factors Motivation Economic Benefits Vancouver 2010 Winter Games Operating Budget Economic Misperceptions Conclusion Introduction: Since the beginning of the 'Modern' Summer Games in 1896 in Athens Greece, Canada has taken part in every Olympics except two. Canada did not participate in the first games in 1896 and it also involved itself with the USA, China, Japan and West Germany in the boycott of the 1980 Moscow Summer Games (Knights Canadian Info Collection, Para 3). Bid History: In 1998, the Olympic Bid Society was created by a group of local citizens. They approached Vancouver City Council for maintaining Vancouver/Whistler bid for the 2010 Winter Olympic Games. The council granted its support to this concept. In November 1998, the City of Vancouver and the Province of British Columbia made a Participation Agreement as they became concerned about the costs and responsibilities related to hosting the games. According to Participation Agreement, the city accepted to be the host city and proceeded with the bid (Larry, Para 1-2). In December 1998, the Canadian Olympic Committee approved the Vancouver bid and agreed upon its representation Canada in the international bidding competition to host the 2010 Olympic Games. The Bid City Agreement was signed by the City, the COA and the bid group. The Bid City Agreement allowed the City to present its bid before the International Olympic Committee and established some roles and the responsibilities for all the parties in presenting the Bid. It also included intellectual property matters like copyright and trademarks, expenses, marketing, community consultation, the signing of the IOC Host City Agreement and operation of the Organizing Committee for the Olympic Games. The conditions of the Bid City Agreement need the City to work with the COC just to make sure that all features of the bid are covered and they are in compliance with the provisions of the Olympic Charter (Larry, Para 3). Initial Cost of Vancouver's Bid: The budget of the Bid Corporation for this bid was Can$34 million and of this total amount the Province of British Columbia and the Government of Canada contributed $1.9 million in financing. Public corporation contributed 54 percent of the bid and private companies offered 46 percent of the funding. Contributing Factors: Hosting the Olympics in Vancouver and Whistler will affect the economy of the Province of British Columbia. Positive outcomes have been understood more important than the negatives for hosting the games. This point of view became very helpful for BC economy of the period around 2002 when the Canadian Dollar was weaker than the American Dollar. The time when Vancouver was selected as host city it was considered as capable as boosting the economy and increasing the tourism. Since then the Canadian Dollar has become stronger than American Dollar and tourism is expected to be lower as it will be very costly to come to Canada and spend in Canadian Dollars (Jay and Adam, Para 2). Motivation: The BC Government has created a favorable opinion of the games in the public eye. The government has guaranteed an economic boom following the games. It is expected that provincial growth will be approximately in between 0.9 and 1.2% per year from 2005 to 2011 (Derek, 2005, Para 1). Announcements have been made regarding the budget of the games and about its expected overall profit. It also has been claimed that there will be approximately 5600 new full time jobs, which will be created directly by the Games. The problem with the claims is that the government has speculated that Vancouver and Whistler areas would not be visited by the tourists if there were no Olympics and the jobs which are created by the Games would not be filled up by the workers and there would be unemployment, which seems to be wrong because there would certainly be large number of tourists and the unemployment rate in Vancouver area is one of the lowest in the province (Jay and Adam, Para 3). Economic Benefits: The important benefits of the games involve promotion of sports, TV audience, housing, increased tourism, jobs, pride, new transit and buildings. These benefits will be for long term in order to realize maximum profits (Jay and Adam, Para 4). Broadcasting: Sports fans and competitors from nearby areas will be able to travel to Vancouver and Whistler to attend the games. Those who will not be able to commute will enjoy the Games on TV. The TV audience is supposed to generate huge revenue and it is expected that there will be approximately 3 billion viewers and later this number will the effect of profit in the budget (Jay and Adam, Para 5). Healthy Lifestyle: Promotion of sports is always beneficial for the people to have healthy life style as it reduces health costs and helps in promoting education in physical activities. It encourages youth to say fit (Jay and Adam, Para 6). Accommodations: To accommodate all the travelers to Vancouver and Whistler, the government has accredited 310 million to Housing Costs. Two new villages have been developed one in Vancouver and another in Whistler to accommodate people for and after the games. These new villages will be good for rental units and investment properties. It gives good opportunity to planned developments, like Concord Pacific at Porteau Cove 1,400 units, Britannia Beach and Park Lane Homes at Furry Creek. It will be beneficial for owner-occupied, seasonal or secondary residences (Jay and Adam, Para 7). Job Creation: VANOC, the Vancouver Organizing Committee for the 2010 Olympics was established on 30 September, 2003 as a non-profit private company (Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games, 2007, p.9). It will have a labor force of approximately 55,000, 400 paid staff, 3,500 temporary staff, 25,000 volunteers, 10,000 contractors and 15,000 ceremony participants by 2010. Approximately 200,000 jobs will be created. This Job creation will create 92,000 jobs in 2031, which is 74% more than 2001 jobs and 4.6% more jobs than having No Games The expected workforce will be 2.18 million people for 2031 which is 4.5% more than Having No Games (Jay and Adam, Para 8). Pride: If everything goes well, Vancouver will gain prestige on international stage. Approximately 700% increase in traffic is expected to online Vancouver tourists' sites during the Games (Jay and Adam, Para 9). Vancouver 2010 Winter Games Operating Budget: The following table shows how the funding is distributed and the revenue will cover the costs (Jay and Adam, Para 10). REVENUE SOURCE $CAD IOC Contribution 579,700,000 Less - cost of providing Olympic Broadcast Services (OBS) (178,000,000) IOC Net contribution 401,700,000 Other IOC revenue 35,000,000 IOC International Sponsorship Program 201,404,000 Domestic Sponsorship 760,000,000 Ticketing 231,854,000 Licensing & Merchandising 46,026,000 Paralympic revenue 40,000,000 Other 110,502,000 TOTAL REVENUE 1,826,486,000 Less: Marketing rights royalties (197,217,000) NET REVENUE 1,629,269,000 EXPENDITURE BY DIVISION $CAD Revenue, Marketing and Communications 126,427,000 Sport, Paralympic Games and Venue Management 186,436,000 Service Operations and Ceremonies 548,130,000 Technology and Systems 398,500,000 Human Resources, Sustainability and International Client Services 153,144,000 Finance and Legal and CEO Office 116,632,000 Project Contingency - Games Operations 100,000,000 TOTAL EXPENDITURES 1,629,269,000 Source: www.vancouver2010.com Public Commuting & Transportation Transit systems will have lots of benefits such as: 55 million $ in road improvements, 254 new busses, 3 sea busses, 3 new sky train stations, 34 new cars, 6 million $ for bike routes (Jay and Adam, Para 11). New Construction and Developments: VENUE CONSTRUCTION REVENUES $ Canada 290,000,000 BC 290,000,000 TOTAL 580,000,000 VENUE CONSTRUCTION EXPENDITURES Venues constructed by Partners with VANOC $ Contribution UBC Ice Hockey arena (UBC Winter Sports Centre) 38,445,000 Richmond Speed Skating Oval 63,110,000 Whistler Olympic and Paralympic (Athletes) Village 37,500,000 Vancouver Olympic and Paralympic (Athletes) Village 30,000,000 Whistler Broadcast and Press Centre 3,000,000 Training Venues / Other Grants 7,400,000 Venues constructed / upgraded by VANOC Hillcrest Curling Venue 38,000,000 Whistler Athlete Centre 16,000,000 Whistler Sliding Centre 104,900,000 Whistler Nordic Competition Venue 119,740,000 Cypress Freestyle and Snowboard Venue 15,800,000 Whistler Alpine (Whistler Creek side) 27,635,000 Hastings Park Skating Venue (Pacific Coliseum) 23,700,000 Other 6,270,000 Subtotal 531,500,000 Contingency 55,300,000 Less: Sponsor VIK Contribution (6,800,000) TOTAL 580,000,000 Source: www.vancouver2010.com Economic Misperceptions: Ticket Sales will motivate the economy: According to the Vancouver Organizing Committee, only 30% of ticket sales will be purchased by the foreigners. It is assumed that professional sports have negative effect on the economy as a whole since the sports franchise is considered as a substitute of other entertainment and services around the city. So instead of doing consumer spending on a new t shirt and going to movies, the people will buy a shirt at the stadium and watch the game. This does not motivate economy. It is just substitution of money from one area to another (Jay and Adam, Para 13). Community and Social Impacts: The Olympic is threatening for the residents of Vancouver and Whistler. It includes rising housing costs, road closure and mistreatment of the homeless etc (Jay and Adam, Para 14). Job Creation: The government of BC has assured that approximately 5600 full time jobs will be created due to the Olympics and it is expected that these jobs has been created for unemployed people and they will be filled by them only. In fact, the employment rate in BC is very low and there is no need of creating such a larger number of new jobs as they may be filled up by those workers who will be working on other job sites (Jay and Adam, Para 15). Conclusion: There is a debate whether the Games are good for local economy or not (Geoffery & Matthew, 2009, Para 1). Overall, the Games will bring the good opportunity for the city though the risks are there as the host city may end up being unfavorable to the future of the economy. However, the Games will improve the infrastructure of the city. The government expects the boost in economy with increased tourism and with the creation of large number of jobs. The city expects that these improvements will motivate the economy (Jay and Adam, Para 24 & 25). Works Cited "2010 Olympic Games Watch". 18 Nov. 2009. http://2010watch.com/ Campbell, Larry. "The 2010 Winter Olympics and Paralympic Games". Citymayors Sport Report. 18 Nov. 2009. http://www.citymayors.com/canada/vancouver_olympics.html "Canada's Olympians". Knights Canadian Info Collection. 18 Nov. 2009. http://www.members.shaw.ca/kcic1/olympics.html Fowler, Geoffery A. & Futterman, Matthew. "Recession Recasts Olympic Spending". Wall Street Journal. 10 Feb. 2009. 18 Nov. 2009. http://no2010.com/node/815 Gladish, Jay & Gable, Adam. The Effect of the 2010 Olympics on the Economy of the Greater Vancouver Area. 18 Nov. 2009. http://web.unbc.ca/chenj/course/project/Vancouver_2010_Olympics.doc Holt, Derek. Reassessing the economic impact of the Vancouver Olympic and Paralympic Games, RBC Economics. Nov 2005. 18 Nov. 2009. http://www.rbc.com/economics/market/pdf/bcolympics.pdf "Vancouver 2010". 18 Nov. 2009.www.vancouver2010.com. "Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games: Business Plan and Games Budget". Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC). May 2007. 18 Nov. 2009 Read More