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.

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