May You Have an Interesting August …

Original article published on April 25, 2008 by USC News.

Written by James Grant

Q. What happens only once every four years, is very expensive, gets loads of international exposure, and depends on corporate America to succeed?

A. Not the U.S. Presidential election … the Summer Olympics!

According to USC Marshall School of Business sports business expert David Carter, the Summer Olympiad is at once a global event like none other as well as a reputation maker for entire countries, regions and corporations.

One really big show, in other words. Add a huge coming out party for China, a little Beijing air pollution and recent disturbances in a certain Autonomous Region bordering the Himalayas, and this August could prove to be particularly riveting, Carter said.

“When the Olympic Committee awarded the 2008 games to Beijing in 2001, everyone hoped that China would get its act together,” he said. “This is supposed to be an opportunity to make people feel more positively about China.”

But Carter says it remains to be seen how China will manage to welcome droves of foreign tourists and state visitors, while avoiding the feeling that the state is watching over everyone for random outbursts of the “T” word.

“The recent news is not doing anything to help drive interest in (visiting China for) tourism and hospitality,” he said. “China has got to be concerned.”

Ditto NBC – which reportedly paid almost $900 million for the rights to the games – and which has subsidiary agreements with dozens of broadcast entities around the globe.

“Billions of people will tune in to some portion of the Olympics,” Carter said, “but what is the production of the event going to look like? NBC has got to protect its investment.”

He points out that the key funding for the entire event is in large part from corporate America – which looks to this Olympiad as the American Super Bowl multiplied by a factor of 10. So there is a lot of pressure from all sides to make the event a success.

With some world leaders planning to boycott the opening ceremonies, and some advocates calling for pulling of national teams from the games, Carter says that a little perspective is desperately needed.

The U.S. boycott of the 1980 Olympiad in Moscow, implemented in response to the Soviet Union’s 1979 invasion of Afghanistan, was hardly effective.

“People rallied around the long-term harm a boycott does to the athletes, who have spent years getting to the point they could participate in the Olympic Games,” Carter said. “Athletes are the only ones who pay a true price for boycotts.”

In addition, corporations and politicians from around the world are astute enough to realize the importance of long-term business and political relations with China.

Anyhow, with the erosion of the “amateur” status of athletes, particularly in basketball and hockey, Carter says the Olympics are in most ways less nationalistic than during the hey day of the Cold War Era.

“When we thought we had pure and clean amateur athletes who wrapped themselves in the flag to compete against the ‘bad guys,’ Americans wanted to embrace them. Now there is less political significance for athletic victories.”

All told, will the corporate investment in sponsorships – and the infrastructure investment by China – pay off? That remains to be seen, he says. As regards corporate sponsors, a recent poll by the industry journal Advertising Age found that 85 percent of Americans don’t think politics has any place in the Olympic Games, and 82 percent don’t think that boycotting sponsors wouldn’t be appropriate.

As regards China’s investment, it would be hard to do worse than Canada, which only recently paid off debt from the 1976 Summer Olympiad in Montreal.