The Olympics are
special sports because they are a major international sporting event. Each Olympics is a historic moment and major
step in the evolution of sports because The Olympic Games have the potential to
create major change. In 2008, the Summer
Olympics were held in Beijing,
China, the most
populous country in the world. Beijing’s Olympics have
major implications for financiers, investors, sponsors, sports law, the economy,
and economists who discuss
Olympics as sport's business. Analysts of the Beijing Olympic
Games examine its many facets and circumstances to make inferences on the future of sport's business.
The Beijing
Olympics are a catalyst for economic inquiry and impact change in legal and
ethical issues that will affect sport’s business within the next ten
years. First, the selection of China as host country
has huge scale economic implications; in sum, China spent $48 Billion hosting the
games and boasts a quickly growing economy, now one of largest in the world.[1] Also, legal issues like internationally
recognized intellectual property law, the ‘right of publicity’, and newly
enacted Chinese Sports Law, are important to explain how sport’s business will
be affected. Ethical issues like human
rights and environmental protection are also tied to analyses of the Beijing Olympic
Games and can be informative on how sport’s entities react when
presented as challenges to traditional cultural circumstances. Consequences for sport’s business and
major impacts on legal and ethical landscapes depend on The Olympics’
ability to be a catalyst for investment, consumption, economic growth, as
well as an ability to increase its “unique legacy to China and to sport.”[2]
The 2008 Olympics
created major changes that are important to note when analyzing an impact on
business of sports. The 2008 games’
impact on the world of sport’s business will be indicated by the success or
failure of these games to bolster public mobilization, to promote civil engagement
in athletics, to draw investors, to effectively execute sponsorship campaigns,
and to bring about social, civil, and socio-economic improvements. If, through the Olympics, international sports
competition is shown to augment social development and to improve society and
the economy, the economic power of sports, in turn, will gain.
Sport’s business
increases its market share and profitability because it inspires reforms,
productivity, and globally acts as a catalyst used by a host country to pitch
itself as a lucrative brand all around the world. For this reason, sports are a sought-after
commodity, especially major events. When
countries host Olympic Games, they are provided a platform to identity build,
develop, and enact civil change through political reform. Sports do not only
provide entertainment, and both politicians and sport entrepreneurs recognize
the economic importance of hosting an Olympic Games.
The Allure of Global Games, by Black and
Westhuizen, was published in Third World Quarterly’s 2004 edition, and
the article explains the reasons countries will expend great many resources to
host global sporting events like The Olympics: “The pursuit of major sporting
events has become a politico-economic strategy of increasing, almost
irresistible appeal for such polities under conditions of globalization.”[3] Meaning, in Beijing, China’s
specific case accepting the bid for the internationally significant Olympic
contest may give them latitude to achieve domestic goals and aspirations in the
global community. The recognition of
sport’s role in facilitating these cultural and economic advancements should
positively impact sport’s business.
The Beijing
Olympics are of major importance because they provide a look at a system where
the government funds and promotes sports, which through its inherent powers,
especially using “global television and communications technologies,” [4]
promotes culture and economics; then, Olympic sport links the host country to
its neighbors abroad and contributes value to the host country; thereby, a
powerful process is created where sports grows phenomenally by helping society achieve
social goals, including international recognition. Black and Westhuizen explain more, “The
political economy of major sporting events emerges as both the most salient and
complex strategy to help a country shine abroad.”[5] The writers present a supporting view of inroads
The Olympics are able to make for socio-economic change, and they apply the
argument that sports are fundamentally increasing in importance since they are
“a means to secure advertising, broadcasting and related revenues.”[6] Olympic success in a post-2008 China will show
signs of promoting social, political, and economic agendas, also indicating growth
in the sport’s business through sponsorship, advertising, and corporate and
government support.
An analysis of legal
considerations for the Beijing Olympics will clarify how government investment
in sports programs, sponsorship and branding of international sports events,
and resulting economic and socio-political reforms impacts the future of
sport’s business. The Olympic Game’s
legal “requirements”, including essential legal contracts and legal changes enacted
by China to be successful in their bid for the Olympic Games, is expounded upon
by Jeffery Levine in A Golden Opportunity
for Global Acceptance?, in Sports Lawyers Journal, published in Spring
2008. Primarily, Levine says, hosting an
Olympics requires a ‘Host City Contract.’
“The parties to the contract include the International Olympic Committee
(IOC), the host city (Beijing),
and the host city’s National Olympic Committee (NOC).”[7] However, before Beijing City
and China’s
NOC reaches this contractual stage, the IOC requires they enact doctrines of
“international legal jurisprudence”, specifically, the Agreement on Trade
Related Aspects of International Property Rights (TRIPS). This essential law is especially scrutinized
in the case of Olympics in Beijing
since the Chinese government is notorious for piracy, copyright infringement,
and for ignoring intellectual property law.
Levine presents
the framework for China
to be an acceptable candidate for hosting the Olympics: “A nation must adopt
TRIPS if it wishes to become a member of the World Trade Organization (WTO),
which is seemingly the de facto requirement to be considered as an Olympic
host.”[8] This legal prerequisite is in place to
protect greater economic interests and the personality rights of athletes. Essentially, the IOC, as the overseeing entity
for the Olympic Games, must ensure that the host city maintain the immense
value of its images along with billions of dollars worth of corporate
sponsorship, while also respecting the commercial value of the identities of
its participating athletes. Levine
assesses the legal implications of hosting The Olympics: “Western intellectual
property law impacts the legal systems of developing nations seeking to host
Olympic Games and how… China,
as the host of the upcoming summer Olympiad, protects an Olympic athlete’s
personality rights…”[9] In moving to comply with legal considerations
and as a means to host the Olympics, Beijing
and China
made “the commitment to making domestic laws and regulations consistent with
WTO rules… More specifically, this process involved repealing or modifying an
expanse of laws and regulations.”[10] According to a 2005 analysis of China’s legal
situation by Arndt, Hertel, Dimaranan, Huff, and McDougall, since the year 2000,
the Chinese legal system has changed 2,300 laws and regulations, repealed 830,
and amended 325.
A comprehensive
look at legal considerations of sports connected to Beijing’s Olympic bid is presented in China’s Sports Law by Nafzinger and
Wei. The authors’ article, published in summer,
1998 in
The American Journal of Comparative Law explains the implications of the
“Sports Law of the People’s Republic of China.” Enacted in 1995, this law marks a transition
of values from total governmental control over sports to spread control to
nongovernmental entities. Nafzinger and Wei explain the new law is an indicator
of “the state’s commitment to sports as a means of enhancing public health and
social development.”[11] Articles of the law that are important for an
analysis of the 2008 Olympics’ impact on future success in sport’s business are:
(1) articles stimulating commercialization, including sports sponsorship and a
club system which holds special importance for sport’s business expansion, and
(2) new regulations which will govern “sports arbitration, the construction and
maintenance of sports facilities, the protection of athletic trademarks, and
the management of commercial sports.”[12]
Commercialization
urged by Chinese Sports Law is a large component to mapping a future picture of
sport’s business. Nafzinger and Wei
explain the legal ramifications for sport’s business as studied in the case of China’s Sports
Law: “Sports sponsorships have caught on quickly as a marketing tool… The
Sports Law encourages private investment in sports… it has also been instrumental
in encouraging private sponsorship and other market mechanisms to finance and
promote sport.”[13] The implications for having a larger investor
base for sports encouraged by private investment augments sport’s economic
value and stimulates business.
Article 3 of
Chinese Sports Law presents a clarifying text for how the Beijing Olympics will
benefit from Chinese compliance to Western legal ideas and also serve to prove Nafzinger
and Wei’s assertions about marketing, investment, sponsorship, and positive impact
on sports business:
The state shall ensure that sports
facilitate economic development, the development of the national defense, and
social development. The cause of sport
shall be included in national economic and social development programs. The state shall promote the reform of the
system of sports management. The state
shall encourage enterprises and institutions, social organizations and citizens
to establish and support the cause of sports.[14]
The implications of this 1995 law
for the 2008 Beijing Olympics are extractable from the western-style provisions
included in this recent production of Chinese Sports Law. Provisions including the Club system
recognize, as Nafzinger and Wei indicate, “the need to equip athletes with
necessary nongovernmental funding…” and also, “China’s renovated sports policy
recognizes the club system as an efficient, revenue-saving alternative to the
traditional state monopoly.”[15] Initiatives like the Club system are concrete
examples of why the recent Chinese Sports Law has been able to create
successful systems to promote sports. A
natural consequence of these laws and made fiscally sound by the progression of
innovative systems in national sports management, is the investment in sports
by China’s
private companies.
A
flurry of domestic funding now comes into sports in China and one year before
the 2008 Olympics, China-based Haier Group who spends $100 million annually on
advertising, hired their first global chief brand officer, Larry Rinaldi. An article in Advertising Age by
Normandy Madden explains Haier’s
Olympic-Size Plans to Rebrand Itself;
Haier Group’s desire to capitalize on the Beijing Olympics is exemplified
by their outreach to a “brand” specialist.
“Before Mr. Rinaldi arrived, Haier lacked an experienced marketer who
could guide them through the same transition other Asian companies, such as
Samsung, have made to global brand status.”[16] The condition of a Chinese sports policy that
supports corporate funding allows Haier Group and comparable companies to move
onto a global footing by sponsoring and ‘branding’ their logo using sports
competition as its medium.
Although, Haier
Group’s Olympic budget was undisclosed, its ability to apply new Chinese financing
allowances for the Beijing Games will increase its brand awareness abroad via
its funding of sport competition that will be viewed by a worldwide
audience. The numerous legal changes
inspired by a China Olympics, and analysis of how those policies of law apply
to real examples like Haier, renders the view of sport’s business as one with
progressive implications created by positive and sports-friendly changes in the
Chinese legal framework.
Another set of
issues are ethical considerations for the 2008 Olympics such as human rights; human
rights are a serious concern when tracking future implications for the sport’s
business. Pico Lyer’s article, The Olympic Challenge, published in Time, August 4,
2008 explains the ethical forces at work, “The hope in every
Olympiad is that the host city will learn that if it is eager to appear on the
global screen, it must meet the minimal standards devised by the international
community.”[17] China had to make many changes and
reforms to systems of government in order to meet the standards for an
Olympiad, reforms purposefully oriented to help economic growth abroad and to project
a new Chinese image to the world.
Halts to China’s
expectation of presenting a prestigious image during the Beijing Olympics are
explained by writers Economy and Segal in China’s Olympic Nightmare. “Demands for political liberalization,
greater autonomy for Tibet,
increased pressure on Sudan,
better environmental protection, and an improved product-safety record now
threaten to put a damper on the county’s coming-out party.”[18] In contrast to China’s facility in building
infrastructure and economic power, their human rights and environmental record contributes
negatively to the image of a Beijing Olympics.
Impact on the sports economy will become clearer by examining the
consequences of China’s
policies in context with hosting the Beijing Olympic Games.
The IOC is the
final authority on awarding Beijing
the 2008 Olympics and according to their charter, “sport must be ‘at the
service of the harmonious development of man, with a view to promoting peaceful
society concerned with the preservation of human dignity.’”[19] The
ethical language of the charter emphasizes civil rights must be afforded so
that agreeable circumstances can meet the Olympic Games. Ethical concerns like human rights will probably
impact the games financially as well.
An article by Drew
Thompson called Beijing Olympics: More at
Stake than Gold Medals, provides a comprehensive examination of China’s risks
and challenges for Beijing
organizers and foreign corporate sponsors.
The topics of infrastructure and pollution, press freedom, international
pressure, managing corporate image, ensuring food and product safety, and
nationalism and sportsmanship are discussed: “International concerns about China’s product
safety, trade surplus, assertive foreign policy, and growing eagerness among
activists of all political persuasions to capitalize on the international
attention present significant risks to Olympic organizers and sponsors.”[20] These topics which concern national ethics
vary in importance when we link Thompson’s argument to an assessment of sport’s
business growth. Thompson warns Olympic
sponsors to be aware of risks and to consider how they will respond to events
that could have a negative effect on their corporate image. Thus, in response to potential economic or branding
pitfalls, Beijing
sponsor companies must identify which ethical concerns may impact them
financially or otherwise.
Up to now is a
basic groundwork explaining the importance of the Beijing Olympics to the world
including legal and ethical considerations, the ability of this particular
Olympics to create long-term economic, governmental, and social changes, and
sport’s business implications. Next, a
return to some fundamental details about the Beijing Olympics can serve as a
context to discuss points about the economic impact on sports business, counterpoints
to this exegesis, and implications for the economic results of the Beijing
Olympics to impact on sport’s business.
Preceding the
Olympics was a massive effort to transform Beijing from “a staid seat of government to a
modern metropolis.”[21] According to a New York Times article,
Before the Olympics, A parade of
Companies, by Amy Cortese, the government spent $40 Billion on
infrastructure and Olympic venues. 2007
projects alone contributed construction of 1.2 million square feet of retail
space, 14 million square feet of office space, and 2,500 new hotel rooms. 2008 saw an additional 11 million square feet
of retail space, 15 million square feet of office space, and over 11,000 hotel
rooms. This vast amount of recently
acquired, rent-ready spaces grants the city new potential for investment and
economic influx.
A point of
contention also regarding returns on the great Chinese investment, surfaces
when the economic track-records of previous Olympic host cities are brought to
bear. The South China Morning Post
published the article Still on a High,
which reflects on precursors to the Beijing Olympics: “As an economic
investment, the Olympic Games has a spotty record at best. Montreal…
took three decades to pay off its $1.5 Billion Olympic debt… yet, eight years
later, the 1984 Olympics in Los
Angeles boasted a profit of $250 million.”[22] Will Beijing
be a Montreal
or Los Angeles? Spending 1.5 times more than the five
previous Olympics combined, Beijing
is now in a debate on if it can overcome a pattern of debt and economic withdrawal
post-Olympics, as Los Angeles
did.
Some positive
indicators are a link between stock market performance and the Olympics and
also, an affluent property market related to Olympic infrastructure. Although some economists argue there is a
“valley-effect” post-Olympics, meaning once the Games leave the money leaves
with them. A counterpoint to this
somewhat stagnant argument is outlined in a research report, The Beijing Olympics from an Investor’s
Perspective by JF Asset Management’s head of investment services, Geoff
Lewis. “The markets of the host nations
of the previous five games have indeed performed strongly after the event, with
an average rise of 27 per cent in the following 12 months.[23] Although each Olympics is unique, the
economic forces that drive development in host cities, countries, and in the
Olympics itself are comparable across the board.
The Olympics’ best
indicator that its economic impact is positive for China can be found in concrete
examples like Beijing Urban Construction Group (BUCG), which has both
contributed to and benefited from Olympic construction. Diao Chunhe, chairmnan of China International
Contractors Association, says “Chinese construction companies won international
contracts worth $78 Billion, up 17.6% from 2006. “BUCG has spent nearly five years on 19
Olympic related-facilities…The three-dozen-plus construction projects and work
related to the Games, such as expanding Beijing’s subway, have given Chinese
contractors a forum to showcase the techniques they’ve learned…”[24] Subsequent the terrific displays of
engineering showcased by China’s building contractors, international projects
abroad are hiring Chinese construction. This
trend of success for large domestic companies in China who win bids in a global
market induces the national economy to experience growth. In fact, a Beijing
Olympics will bring gains to many industries like “aviation, retail, tourism,
service, advertising and hospitality sectors.”[25]
The Olympics always
bring a worldwide audience, and the spectacles of The Games are now capable of
being wired over the internet and broadcast on TV. NBC TV announced it paid $894 million to Beijing for coverage
rights. The network will provide 1,400
hours of TV coverage and 2,200 hours of free live internet video coverage.[26] Also included on NBC’s lineup is the show
‘Access’ which broadcasted from the Great Wall of China. “The Chinese government sees the Olympics as
its gateway to Western markets and civilizations, so it’s willing to tolerate
shows such as Access for a time.”[27] The restrictive nature of the Chinese
government, which sensors TV, magazines, and media, is recognized by the West. Therefore, sport’s spectators are greatly
advantaged by the presence of Western media at the Olympics since it has the
ability to open the richness of Chinese culture to the world for a brief
time.
A majority of
articles explain the commonly accepted stance that the impact of the Beijing
Olympics is stable on China’s
economy. Some example headings include, City’s economy will not slide after Games,
says economic planner and Chinese
economist says post-Olympic economic downturn “highly unlikely.” Positive articles are prevalent as well: Chinese agency: Olympics to have long-term
benefit to Beijing’s
“liveability”; these are all examples of the most important information for
sports entities to know. When IOC
assessors or sports business affiliates recognize the Olympic games are
functioning, The Games can serve as a springboard to empower athletics,
generate revenue, and positively impact sport’s business.
Impacted by
changes brought about by the Beijing Olympics, the business of sports will test
strategies learned from 2008 for years to come.
The next summer Olympic Games are to be held in London in 2012 and lessons from massive construction
efforts and economic agendas enacted during the Beijing Olympics will no doubt apply
to London. However, sport’s business will have immediate
opportunities to benefit from the Beijing Olympics’ legacy. Marketing and branding campaigns as well as
investment and sponsorship have seen great advancement due to the Beijing
Olympics. Also, legal changes in China’s
Sport’s law, publicity law, and intellectual property law creates better
opportunity for Western partners to connect with athletic programs in
China. Ethical considerations like
improving human rights can also be linked to an increase in foreign participation
with the Chinese market. The boons
granted by a Beijing Olympics are undeniable and all the signs of growth bode
well for the sport’s business in the coming years. If sport’s business can hold on to the
momentum generated for it by the Beijing Olympics, the next four, eight, and
ten years will be marked by increased investment and sponsorship, new venues,
and even enactment of laws that will bring beneficial change to the business of
sports.
[1] A Giant Awakens - $48bn to kick-start a new
era by Mike Hurst, 47
[2] New Beijing,
Great Olympics: Beijing
and its Unfolding Olympic Legacy by Ryan Ong, 37
[3] The Allure of Global Games for
‘Semi-Peripheral’ Polities and Spaces by Black and Westhuizen, 1196
[4] The Allure of Global Games… by David
Black and Janis Van Der Westhuizen, 1202
[5] The Allure of Global Games… by David
Black and Janis Van Der Westhuizen, 1198
[6] The Allure of Global Games… by David
Black and Janis Van Der Westhuizen, 1202
[7] A Golden Opportunity
for Global Acceptance? How Hosting
the Olympic Games Impacts a Nation’s Economy and Intellectual Property Rights
with a Focus on the Right of Publicity by Jeffery Levine, 6
[8] A Golden Opportunity
for Global Acceptance? by Jeffery Levine, 6
[9] A Golden Opportunity
for Global Acceptance? by Jeffery Levine, 2
[10] New Beijing,
Great Olympics by Grant Lee, 15
[11] China’s Sports Law by Nafzinger and Wei,
465
[12] China’s Sports Law by Nafzinger and Wei,
472
[13] China’s Sports Law by Nafzinger and Wei,
467-68, 472
[14] Sports Law of the People’s Republic of China
by Committee of the National People’s Congress, Article 3.
[15] China’s Sports Law by Nafzinger and
Wei, 468-69
[16] Haier’s Olympic-Size Plans to Rebrand Itself
by Normandy Madden, 1-2
[17] The Olympic Challenge by Pico Lyer, 1
[18] China’s Olympic Nightmare: What the Games
Mean for beijing’s Future by Economy and Segal, 1
[19] China Mocks the Olympic Spirit by Wu’er
Kaixi, 26
[20] Beijing Olympics: More at Stake than Gold Medals
by Drew Thompson, 1
[21] Before the Olympics, A parade of Companies
by Amy Cortese, 1
[22] Still on a High in South
China Morning Post, 1
[23] Investors betting on Games feel-good factor;
Analysis predict the ‘Olympics effect’ will produce an uptick in mainland
economy by Enoch Yiu, 1
[24] Building on the Games by Charlotte Li, 1
[25] The Race for the Olympic Dollar by Tracy
Quek & Vince Chong, 1
[26] NBC wired about expanding Olympic coverage
to cable, online outlets by Michael Hiestand, 1
[27] Olympic ‘Access’ by Paige Albiniak, 1