London 2012 can ape success of 1948

London Olympics 1948It's less than a year until the London Olympic Games opens but, admits one expert on the event, 'the economic model and delivery of a 'legacy' plan are challenged by staggering levels of public debt amid financial meltdown'. But, says Matt Rogan, author of a compelling study of London and its three modern Olympiads, "we've been here before". In the second part of our conversation about the London Games, he tells me how.
"When we last hosted the games, in 1948, it was the first after Hitler's tarnished 1936 Olympics in Nazi Berlin. Public debt was far higher than today, running at around 200% of GDP. Attlee's government made no contribution to the Games and there was no blueprint for commercial funding. Britain's population was malnourished and disillusioned."

Despite all this, says Rogan, "UK Olympic leaders delivered in 1948 and are showing every sign of doing so again in 2012." That's a view that will surprise many people but, says Rogan, it's the ability to "innovate at a time of austerity and to challenge the status quo" that will be seen as distinguishing features of both games.

Beijing Games

He says that the scale of the challenge facing the London Games organisers is rarely acknowledged. He said: "As if the context of public austerity wasn't enough, London 2012's organisers have the additional challenge of living up to the expensive and overtly political Beijing Games.

"Their budget is less than a fifth of China's, even if you count the funds allocated to regenerating a vast swathe of East London which would otherwise have remained a polluted, largely derelict space for a minimum of another 40 years." And, he points out, despite the perception in some quarters, the spend on the Games is below projections.

He refers to the spend analysis in the latest quarterly report on the Games and Paralympic Games from the Department for Culture, Media and Sport. That shows an actual spend figure of £5,535.8m at the end of June 2011 – significantly down on the projected spend figure of £6,015m made in November 2007.

Much of that saving has been achieved, says Rogan, through savings on infrastructure works, logistics and security which have offset additional spend on the Olympic village. This is, he accepts, a complex picture, but it's one which he thinks it is important to try to understand. He explains:

Olympic Village

"The key thing is that the additional public spend on owning the Olympic Village (or a Stadium) isn't ideal cash flow wise, but it's much like owning a bank or a stadium in that in the long term it can be released back to commercial ownership when the market is most receptive... and in the meantime the funds recouped (for example by selling houses on the Village) just go back to the public purse."

It's particularly hard at a time of austerity to argue the merits of taking the long view, Rogan accepts. But he doesn't believe that means you shouldn't try, and he's got plenty of examples to back his case. In 1948, a former Royal Flying Corps observer, Sir Arthur Elvin, was the driving force behind the games and his efforts to deliver on a shoestring led to some far-reaching changes.

He persuaded the BBC to cover the Games, and to pay £1,000 to do so. And then he got Rank to pay 10 times that to make a film of the Games. At the time, senior BBC figures thought the organisation should cover only 'serious news', but Elvin invested in transmission facilities which created pressure from within for a change of mind.

BBC screens sport

By the end of the Games, the BBC was screening five hours of sport a day. Public morale was boosted, interest in sport grew with a concurrent impact on public health. The attraction of the TV set grew, and with it the draw of live sport which is such a key part of today's TV market.

Ironically, the London 20102 commercial team led by CEO Paul Deighton has had to innovate precisely because the Games cannot generate ad revenue from TV coverage as the Games are on the BBC. So the London commercial team has had to drive £700m of sponsorship without bundling in TV rights, and has already hit that target

So Deighton's team has, says Rogan, "created business models for each potential sponsor, looking at the impact a Games sponsorship might have across every area of their business." What that means in practice is that corporate partners such as Lloyds and BT are using the Olympic tie-up not to push their products, but to change the way they do business internally.

That's all very well, some might say, but it what about the here and now? We hear a lot about the cost of the games and about the corporate opportunities, but what about the benefits to ordinary people, and has anything been achieved so far? We'll take a look in the third part of our series tomorrow morning.

  • The picture at the top of this article shows the Lord Mayor of London holding the Olympic flag at the closing ceremony of the 1948 Olympics.

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Britain and the Olympic Games: Past, Present, Legacy by Matt and Martin Rogan
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