Pellegrino Deloitte 2010

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A lasting legacy

How major sporting events can drive positive

change for host communities and economies

Global Public Sector

Featuring interviews rom Deloitte

member frm leading proessionals with

experience in global events


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Foreword

Major sporting and entertainment events such as theOlympic and Paralympic Games, FIFA World Cup, theUniversal Exposition (Worlds Fair or Expo), FormulaOne, and the Tour de France have become a top agen-da item for governments around the world. Thesekinds of events can be a significant catalyst for change,elevating the hosts global stature and turbochargingits economic, political, and social development.

Hosting a major event gives a city or country permis-sion to move quickly and decisively on a wide rangeof issues and activities that would normally be miredin endless debates and bureaucracy. It provides a com-mon focal point for people to rally around. It providesa rigid deadline that accelerates infrastructure develop-ment and other large-scale improvement activities that

might otherwise take decades to complete. And withthe whole world watching, it provides a strong incen-tive to do things right.

The process of pursuing and delivering a major eventalso produces important fringe benefits. It fosters col-laboration among the public sector, private sector, andcommunity. It breaks down barriers between politicalparties and between various levels of government(national, regional, and local). It improves governmentefficiency and sets an example for new ideas andbehaviors such as environmental sustainability, diversity,and community involvement. These are ambitious andhighly worthwhile endeavors; they are also highly chal-lenging to deliver, capture, and prove.

Moreover, all of these benefits hinge on the hosts abil-ity to plan and execute effectively at every stage of the

event lifecyclefrom prebid to postevent legacy.

This report looks at the challenges of pursuing andhosting a major event, and offers practical and proveninsights to help cities and countries capture and host asuccessful event that delivers a legacy of positive andlasting change.

A lasting legacyBy Greg PellegrinoGlobal Public Sector Industry Leader, Deloitte Touche Tohmatsu

and

Heather HancockManaging Partner, Innovation and Brand, and Lead Client Service Partner for Olympic Services,Deloitte United Kingdom

16 February, 2010

Greg Pellegrino

Global Public Sector Industry LeaderDeloitte Touche Tohmatsu

Heather Hancock

Managing Partner, Innovation and BrandLead Client Service Partner for Olympic ServicesDeloitte United Kingdom

Imagine a month o Super Bowlsthe U.S. National

Football League (NFL) Championship and the most widely

viewed annual sporting event in the United States each year.

That is what the Tour de France means to France as an

exposition o national pride now televised globally

throughout the world or 20 days each July. For over 100

years, the Tour de France has been a ocal point or French

communities and towns who compete or the attention to

host a departure or arrival stage while millions o ans line

the streets to catch a eeting glimpse o the competitors as

they speed by at over 50kph.


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A major event has the potential to create a lastinglegacy that provides the host city or country with newlevels of global recognition and economic, political,and social development. On the other hand, if not

handled correctly, a major event also has the potentialto leave a disappointing legacy of abandonedstadiums, missed development opportunities, and lostinvestments.

Here are some key challenges and issues to considerwhen pursuing and executing a major event:

Partner with the private sector on majorinfrastructure investments. Many hostcities and countries are now seeking businesspartners from the private sector to help fundand manage infrastructure before and afterthe event.

Focus on the postevent legacy, notjust the event. Postevent legacy issuescan seem boring and distant compared tothe excitement and immediacy of preparingfor an event. However, they are every bit asimportant, and require deliberate attentionand investment.

Build a broad base of support. Winningand hosting a major sporting event requiresstrong support and collaboration from a broadrange of stakeholders, including the public,government, businesses, and local sports orga-nizations. Lack of support in any of these areascan severely undermine an aspiring hostschances for success.

Get an early start on infrastructureplanning. To avoid producing infrastructurethat is only useful for the event, hosts shouldstart infrastructure planning early so projectsand investments fit with their long term plans.

Create a broad economic footprint.Sporting and entertainment events are becom-ing increasingly commercialized, with majorglobal sponsors playing a greater role than

ever. But to help ensure a broad and lastingimpact for the local economy, event organizersand government leaders must make a deliber-ate effort to get small and mid-size companiesinvolved.

Reach across political boundaries. Giventhe long timescales associated with a majorsporting event, organizations such as theInternational Olympic Committee (IOC) andInternational Federation of Association Foot-ball (FIFA) cannot take the risk that a shift inleadership will cause a government to reduceor withdraw support for the event. A success-ful bid needs strong political support from all

major political parties.

Promote the legacy vision, but be real-istic. Citizens should understand and takepride in the visions lofty goals. But they alsomust understand and appreciate the enor-mous scale and complexity of the task.

Dont assume the desired legacy willhappen automatically. Host cities andcountries should not assume a successfulevent will automatically deliver the desiredchanges and long-term benefits. Creatinga positive and lasting legacy requires strongleadership and sustained commitment.

It is easy for event sponsors and organizers to get socaught up in the short-term challenges of winning thebid and delivering a successful event that they losesight of the long-term objectives that were their mainreasons for pursuing the event in the first place.

Given the massive investments required to host a

Executive summary


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major event, it is not surprising that a lot of attentiongets focused on the bottom line. But in many cases,a detailed economic impact analysis is really just onecomponent of the decision based more on visionary

benefits such as improved public image, increasedstature in the global marketplace, community pride,and long-term economic development. There is noth-ing wrong with basing the decision on these kindsof broad and intangible objectives. In fact, while adetailed impact analysis is necessary for due diligence,from a hosts perspective achieving the long-term ob-

jectives and vision for change are ultimately far moreimportant than short-term profits and losses.

For example, in the 1990s it was fashionable toderide the Grands Projets of Francois Mitterand, thenPresident of the Republic of France, or the MillenniumProjects being advanced in the UK. Although somequestion whether these efforts delivered on their early

promises, they did galvanize public attention, driveinnovation and creativity, and convey a confident andforward-looking image to national and internationalaudiences.

We believe the case for hosting a major sporting eventis compelling, and that most hosts receive benefits thatsignificantly outweigh the time, money, and effort theyinvest. However, not every event is a good fit for everycity and country. An aspiring host that is not a goodcandidate for a particular event needs to recognizethat fact before wasting time and money on a futilepursuit.

Most of the selection criteria that make a host a good

candidate are obvious or explicit. But there are otherimportant criteria that are less tangible or publicized.These include:

Passion. In most cases, there needs to be ahighly motivated and influential core groupthat drives the pursuitespecially in theearly stages.

Leadership. Strong and effective leadershipmakes an aspiring host much moreattractive, and greatly increases the chancesfor a successful event. For example, the IOCand FIFA, which entrust their global brandto a city and country for four years, need tohave confidence and trust in the relationshipwith the organization/host.

Unity. Successful bids tend to have strongsupport from the public, government andbusinessand are able to show that thehost is willing to pull out all the stops tomake the event successful.

Proven track record. Hosting a similareventeven on a smaller scaleincreases acandidates credibility and chances for suc-cess. For example, Brazils success at hostingthe Pan American Games in 2007 helped towin the 2014 World Cup bid, which in turnhelped to attract the 2016 Olympics.

In order to achieve the full benefits and deliver a last-ing legacy of positive change, an aspiring host mustunderstand the challenges and commit itself to doingwhat is necessary to address them. This understandingand commitment should be attained before pursuinga bid.

Successul bids tend to have

strong support rom thepublic, government, and

business.


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in expanding their global presence by holdingevents in emerging markets, as well as a need tovalidate what they say about their global brandsand values.

Even the process of bidding for a major sport-ing event has become an imposing and costlyundertaking. According to folklore, Munichssuccessful pursuit of the 1972 Summer Olympicswas not highly formalized. Contrast that withBrazils recent winning bid for the 2016 games,which took years to prepare and required a deepcommitment from a wide range of stakeholdersin both the public and private sectors. Also, aspir-ing hosts may need to participate in a number offailed bids in order to edge closer to ultimatelycapturing a major event; this compounds thecosts and can strain public and political support.

The four candidate cities bidding to host the2016 Summer Olympics presented budgetsaround US$40-50 Million (both the applicantand candidate phases). The three non qualifyingapplicant cities Prague, Doha, and Baku submit-ted US$6-11 Million for the applicant phase. Thetotal of all these submitted budgets exceededUS$200 Million. Based on early direction from thebid cities reporting, the total actual expendituresfrom all bid cities will probably exceed US$250Million. This is a growing concern for the IOC asthe bid process itself can place financial burdensthat leave questionable legacies. The IOC is put-ting continued focus on trying to contain thesecosts and is considering shortening the bidding

cycle and the number of finalist cities.

To reduce expenses, Londons reusable stadiumand the IOCs Observer Program, which providesthe opportunity for the next Olympic organizersto better understand the games environment,can be used as a model to minimize costs andmaintain the quality of the event. Backbone ITsystems and medical facilities etc., may becomecommoditized through the global sponsors al-lowing the host organizers to focus on the eventexperience for all constituencies.

It has become increasingly important for estab-lished cities and countries to host a major eventfrom time to time to strengthen their global im-age and positioning. However, these days there

is more competition than ever from emergingcities and countries that see major sporting andentertainment events as a fast track to globalrecognition and influence.

Competition for the Summer Olympic Gamesand FIFA World Cup is particularly fierce, withcities and countries from every continent vyingfor the rights to host the event. There are fewersources of competition for the Winter Olympics,largely because winter sports are less universalthan their summer counterparts, and becausefewer locations have the mountainous terrainand cold climate necessary to host such an event.Yet, among the relatively small number of bid-

ders who are qualified, the level of competitionremains intense.

This heightened competition is creating a spiralof increasingly ambitious plans and claims fromaspiring hostsparticularly from emerging citiesand countries, which feel a stronger need to im-press the selection committee, and which requiregreater investment to build up the necessaryinfrastructure.

The qualifying bar is rising so high that many pro-spective candidates simply cannot compete. The2016 Olympics, which were recently awarded toRio de Janeiro, are an example of how high the

stakes have become. Brazil is one of the worldsfastest growing economies, and Rio is alreadya well-established city, yet the investment com-mitments in Rios successful bid were roughlydouble those for Chicago. This disparity was notsurprisingChicago has hosted previous majorevents and has a well developed infrastructure fortransportation, sports, and visitor accommoda-tions, and therefore would not have needed tobuild as much from scratch. However, the overalltrend is a significant concern for organizationssuch as the International Olympic Committee(IOC) and FIFA, which have a strong interest

High stakes

This heightened competition

is creating a spiral oincreasingly ambitious plans

and claims rom aspiring

hosts.


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What makes a major sporting event such apowerful catalyst for change?

Clear focal point. A major sporting event

provides something important and tangible fordisparate groups to rally around.

Global spotlight. People know the world iswatching and want to do things right.

Local pride. Everyone wants his or her city orcountry to make a good impression.

Large-scale investment. A major eventrequires a large investment in infrastructure,thereby laying the groundwork for widespreadchange.

Rigid requirements and deadline. Sincethe event requirements and date are set in

stone, the host and everyone involved has nochoice but to rise to the challenge. Failure isnot an option.

The positive socioeconomic impacts that stemfrom hosting a major sporting event are not justfringe benefits or happy side effects; they are themain reason for hosting the event in the first place.Decision-makers might spend a lot of time quot-ing numbers from a detailed impact analysis. Butoften that is simply a way to appease people whomight be critical of spending taxpayer dollars onsomething perceived as frivolous entertainment.Applicants need to be able to effectively communi-

cateto their country citizens and to the organiza-tion of the major event the reasons that makethe city the best suited to host the event.

The actual decision to host an event is more likely tobe driven by a desire to create a positive and lastingchange for the region and its inhabitants. In fact,it is worth the effort to assign tangible monetaryvalues to an events intangible benefits. This makesit possible to factor intangibles into the formal deci-sion-making process and helps ensure they do notget lost in the shuffle.

A catalyst or change

The role o government

Government involvement and support are essential when pursuing and hosting a major sportingevent. The government generally is expected to play five distinct roles:

Financial guarantees. Governments first role is to be the guarantor for financial obligations andliabilities related to the event. Given the huge amount of money involved, only the governmenthas the resources to effectively take this on.

Security. Another critical role for the government is keeping people safe. As major sportingevents have grown in visibility and importance, they have increasingly become targets for ter-rorists and other disruptive forces. It is up to the government to keep both the public and theparticipants out of harms way and to get the athletes, support staff and supporters into and outof the country in an expeditious way that ensures security.

Stakeholder support.A successful bid requires strong and consistent support from all key stake-holders. As a major stakeholder itself, the government must demonstrate strong and unwaveringsupport for the event. But thats not the end of the story. Government can also play a unifyingrole in building and maintaining support among all other stakeholdersincluding the public,

sports associations, businesses, developers, sponsors, various branches of government, andcompeting political parties.

Funding infrastructure investments. Major sporting events typically require significant investmentsin public infrastructure, including upgrades or new development of stadiums, event facilities, andtransportation systems. In most cases, taxpayers must foot the bill for these investments. How-ever, there has recently been a notable increase in public and private partnerships, with privatesector enterprises helping to fund infrastructure in exchange for the rights to use the facilitiesfor commercial purposes once the event is over. That said, it must be noted that in London, thegovernment has had to step in because of the global financial crisis to take over some fundingresponsibilities temporarily until the commercial value proposition strengthens enough for theprivate sector to take over facilities and ownership.

Support and welcoming services. A major event also increases the need for ancillary services suchas medical support, police and security, visitor information, and sanitationjust to name a few.The hidden costs of these services are often unanticipated and can really add up. In most cases

the government ends up paying the bill.


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Although every situation is unique, there are anumber of large-scale changes that host citiesand countries are typically striving for. Some-times, the desired changes are explicit. Other

times, they are unspoken, or even subconscious.But in the vast majority of cases, these far-reach-ing and intangible changes are the real motiva-tors for hosting an event.

Global image

Improved stature in the global businessmarket. Hosting a major event gives the hostinstant or accelerated credibility in the globalmarketplace. This was a key factor for theBeijing 2008 Olympics, helping China cementits status as an economic superpower. An ap-pearance on the world stage can help the hostattract new companies to the area and ratchet

up the overall level of trade and commerce.

Increased appeal as a tourist destination.A major sporting event provides a showcase forall of the fun and exciting things a host has tooffer. It can put an unknown tourist destina-tion on the map or it can help an establisheddestination improve or overhaul its image. Forexample, Germany has a global reputation forno-nonsense efficiency and mechanical preci-sion. But its motto for hosting the 2006 FIFAWorld Cup was time to make friends, and thatis exactly what it did. It even provided trainingfor taxi drivers to help ensure visitors would re-ceive a good first impression. By the end of the

tournament, many visitors and TV viewers werelooking at Germany in a whole new light.

Economic development

Improved infrastructure. Major eventsrequire significant infrastructure investmentsthatif managed correctlycan have a posi-tive and lasting impact on the community. Forexample, the 1972 Olympics in Munich providedthe impetus to build a subway system that con-tinues to serve the public to this day. Similarly,one of Londons main reasons for hosting the

2012 Olympics is the desire to create a new citycenter on the east side of town, anchoring themedium-term expansion of the capital eastwards.

In many cases, the infrastructure for a majorsporting event would have been built anywaybut would have taken much longer to develop.For example, a massive project like the Munichsubway would normally require 10 to 15 years tocomplete, but because of the Olympic deadline,it was successfully delivered in only five. In China,Terminal 3 at the Beijing International Airporttook four years to be built, taking Beijing frombelow the 30 top busiest airports to the topeight.

Long-term economic improvement. Amajor event can provide an immediate jolt tothe economy. But, when all is said and done,

what really matters is the long-term impact. Thisimpact can be hard to isolate and measure, butthat doesnt detract from its importance. Theactivities and investments required before, during,and after an event can boost employment andcreate new business opportunities for compa-nies of every shape and size throughout theregion. Meanwhile, the improved infrastructurecan attract new companies and enable peopleand businesses to operate more efficiently. And,of course, an improved global image can givetourism and economic growth a significant andsustained boost as shown by Barcelona withthe 1992 Olympics. Various large infrastructureprojects (e.g., transportation, telecom) and the

redevelopment of entire city districts boosted thecitys long-term appeal for business and tourism.

It is this long-term economic legacy that weconsider the most challenging to fully realize.After the eventwhen athletes and entertainersgo home, the political spotlight dims, and placesthat felt secondary to the event location demandtheir fair share of investment and actionthatis when the legacy is most at risk. There is littleglory to be had in the ten year slog to deliver allthe benefits that were envisioned. Talent can driftaway to the next high profile project. Politicalleadership wearies or changes. And it is all too

Types o change

Hosting a major event gives

the host instant or acceler-ated credibility in the global

marketplace.


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segregation. Similarly, the U.S. National FootballLeagues (NFL) decision to return to New Orleansin September 2006, was seen as a key move toshow that the city was recovering from the Hur-

ricane Katrina effects of a year earlier.

Greater consensus and collaboration.Major events create a platform for unificationand cooperation across political and govern-ment boundaries, and provide an opportunityfor collaboration between the public and privatesectors. The IOC cites the Sydney 2000 Olympicsas a prime example of collaboration between theorganizing committee, public, businesses, andgovernment agencies at the national, regional,and local level. What drove this collaboration inSydney was the recognition that a shadow or-ganization structure was needed to ensure everymajor focus area had equal representation from

both the organizing committee and government.

More efficient government. The rigid require-ments and deadlines associated with majorevents force government to take decisive actionand operate more efficiently. Lessons and behav-iors learned along the way can help the govern-ment improve how it operates in the future. Forexample, in preparing for the London 2012 Olympics, five boroughs are working with the Mayorof London and Greater London Authority on anintegrated planning application for the develop-ment of the Olympic Park. They are harmonizingtheir individual timescales and making multilateratrade-offs in order to achieve a single unified

approach.

The 1992 Barcelona Olympics are also a positiveexample of cooperation between different publicinstitutions and the local and national govern-ment during the planning and developmentphases of the event. In just six years, Barcelonafinalized several infrastructure projects that wouldotherwise have taken several years to implement.

easy for tumbleweeds to take over the stadiumsand parks. The fact that the UK has establisheda legacy delivery organization three years beforethe London 2012 Games signals how real this risk

is. To succeed, a host needs to anchor the realiza-tion of benefits before the event takes place,rather than scrambling to pick up the piecesafterwards. Legacy begins from the moment thebid is created, not when the closing ceremonyends.

The Spanish government aspired to play animportant role in the European Community. Itset out to demonstrate how Spanish society hadmodernized and transformed, and did so througha series of events called the 1992 project. Theevents included the Barcelona Olympics, theSeville Universal Exposition, and the EuropeanCapital of Culture designation of Madrid. The

1992 Olympic Games had an enormous impacton the Barcelona economy. They attracted mas-sive investments in infrastructure projects thatwere considered quality-of-life improvements,and made the city more appealing to investmentsin tourism.

Government & politics

Improved stature of current governmentand leadership. A major sporting event not onlyboosts the image of the host city or country butalso the image of the government and leaderswho help make it happen. This has certainly beenthe case in Brazil, where President Luiz Incio Lula

da Silva has enjoyed a significant surge in popu-larity and prestige for successfully attracting the2007 Rio Pan American Games, the 2014 FIFAWorld Cup, and the 2016 Summer Olympics.

In 1995, the Rugby World Cup in South Africarepresented an opportunity for the country toannounce its reemergence as a full member ofthe worlds sports community, as well as theinternational political community. By hostingthis major event, the country showed that it hademerged from its years of racial oppression and

Major events create a

platorm or unifcation andcooperation across political

and government boundaries.


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Society and behavior

Increased local pride and self-image. Amajor sporting event can dramatically improve

how people in the host city or country viewthemselves and their community. For example,Barcelona had languished in Madrids shadowfor centuries. But in hosting the 1992 Olympics,the city and its inhabitants received a huge boostthat helped them achieve parity with their moreestablished neighbor.

Better quality of life. To make a good impres-sion, host cities and countries have a strongincentive to address problems such as crime,poverty, and urban decay. Some choose to simplyhide such problems from view. But others use theevent as a catalyst to actually make things better.For example, the Barcelona Olympics turned a

rundown part of the city into the events crownjewel and made the city center more appealingby connecting it to the sea and making the seamore accessible to citizens. London is doingsomething similar, using the 2012 Olympics toturn languishing and deprived communities in theEast End into a new economic center for the 21st

century.

Model for new behaviors. Major eventsprovide a perfect opportunity to change howpeople think and behave, for example, in theenvironmental and green area. However, becausethese events are so high-profile, many externalorganizations use them as a lightening rod to

voice their political platform requiring the bidorganizations to get in front of them or otherwisereact to them.

These models for new behaviours or idealsmigrate over time: from true differentiators totable stakes to finally be considered for winningthe right to host. Therefore, identifying the next

new behavior is critical.

Green is certainly an example of that and it washighlighted in all of the 2016 bids. The firstGreen Games were the 1994 Winter OlympicGames in Lillehammer, Norway. In the same year,Sydney, Australia, which had focused its bid onan environmental concept, was chosen as thehost city of the 2000 Summer Olympic Games.Since then, the majority of major sport eventshave focused on sustainable development andenvironmental education. A recent example isthe 2008 Olympic Games in Beijing: At the time,China wanted to reposition itself as more envi-ronmentally friendly and reconcile its rapid eco-

nomic growth with an environmental protectionpolicy that included pollution control and waterconservation. This initiative received widespreadcoverage for China in the rest of the world.To help realize the goal of staging the greenestOlympics ever, the organizers of the 2010 WinterOlympics in Vancouver are asking people whoplan to travel to the games to purchase carbonoffsets for the estimated 268,000 tons of emis-sions the games will produce.

In 2012, the London Olympic Games are be-ing used as a showcase for sustainability. Todemonstrate their commitment to the environ-ment, organizers are keeping track of the events

carbon footprint to help ensure the environ-mental impact of all related activities is heldwithin specific limits. The events sustainabilityplan also addresses issues of biodiversity, waste,climate change, and healthy living. The OlympicCommittee hopes the London games will set apositive example for other organizations lookingto become more sustainable.

Major events provide a

perect opportunity to

change how people think

and behave, or example, in

the environmental and green

area.


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General Charles Chuck F. Wald, the formerDeputy Commander of U.S. EuropeanCommand (USEUCOM), is now Directorand Senior Advisor, Aerospace and DefenseIndustry, Deloitte United States (Deloitte

Services LP). As deputy commander, U.S.European Command, a position Wald held

from 2002 until his retirement from the U.S.Air Force in July 2006, he was responsible forall U.S. forces operating across 91 countriesin Europe, Africa, Russia, parts of Asia, the

Middle East, and most of the Atlantic Ocean.As such, he played a key role in ensuringsecurity for the 2004 Summer Olympics inGreece. Before 2002, he served as DeputyChief of Staff for Air and Space Operationsat the Pentagon, and led the coalition aircampaign in Operation Enduring Freedom in

Afghanistan.

A view rom the ront lines:

the security challenge

Host cities and countries often underestimatethe challenges and importance of security for amajor sporting event. After all, its just sports.Unfortunately, this oversight can lead to a tragicloss of human life and cause significant damageto a hosts global image and reputation.

Terrorists want their actions to be noticed, and amajor sporting event provides a perfect vehicle

for capturing the worlds attention. In fact, formany people the hostage crisis at the 1972Olympics in Munich is the first terrorist act theycan remember. Since then, the range of securitythreats has expanded to include everything froma lone fanatic armed with a weapon to large-scale bombings, global pandemics, biologicalweapons, and cyber attacks. Addressing thisbroad range of threats is a difficult and complexundertaking. Key challenges include:

Fostering cooperation across agencies.Effective security on a massive scale requiresinformation sharing and coordination acrossdifferent government departments andagencies. In many cases, these isolated or-ganizations are not accustomed to workingtogether and may actually be hostile towardone another. For example, the civilian policeand the military often have little respect foreach other and view themselves as competi-tors, not colleagues.

Providing low-hassle safety. Security fora major event is a delicate balancing act.People are attending the event to have agood time and are likely to resent securityefforts that are overly restrictive or intrusive.Yet in order to create a safe environment forthe event, security efforts must be suffi-ciently rigorous and robust. Ignoring security

threats is clearly not an option; yet even justtalking about them can cause a lot of publicanxiety.

Capitalizing on technology. State-of-the-art technology can make the hosts securityefforts more effective and less intrusive. For

example, mobile particle sniffers candetect airborne biological threats beforethey have a chance to spread. Ad-vanced thermal scanners at airports canlimit the spread of deadly diseases bydetecting passengers with fevers as theydeboard the airplane. Image detectionsoftware can help security staff avoidtedium and distractions while monitor-

ing security cameras. Technologies suchas these can improve security whilereducing costs.

Preparing for the worst. Even thebest security efforts cannot guarantee atrouble free event. That is why it is veryimportant to prepare an adequate crisisresponse. Prior to the event, processes,equipment, and people must be estab-lished to deal with any crisis that is likelyto arise.

Asking for help. Most host citiesand countries do not have sufficient

resources or capabilities on their own totackle the significant security challengesassociated with a major sporting event.To succeed, they must be willing to askother nations for helpand to accepthelp that isoffered.

Aspiring hosts that are unable or unwilling todo what is necessary to address these chal-lenges should not even bid for a major event.The good news is that the time, money, andeffort invested in security can have a positiveand lasting impact for the host, improvingoverall safety for the community and provid-ing a safe and secure environment for busi-

ness and tourism over the long term. In fact,the investment that is made to strengthensecurity for the event can often have down-stream benefits after the event in strengthen-ing the overall police/security infrastructure ofthe host city.


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How to create a lasting legacy

Major events are typically structured so theorganizer cannot lose money. Generally speak-ing, it is the government that absorbs the lionsshare of costs and risks. In theory, taxpayers

receive positive and lasting benefits from theirsizable investments in an event. But, in reality,the long-term benefits hinge on having a soundand actionable plan for converting the specializedevent infrastructure into something more broadlyuseful once the event is over.

Here are some practical and proven insights tohelp host cities and countries use a major sport-ing event as the catalyst for positive and lastingchange.

Focus on the postevent legacy, not justthe eventCompared to the excitement and immediacy of

preparing for an event, postevent legacy issuescan seem distant and uninteresting. But theyare just as important to achieving the desiredlong-term benefitsif not more so. And if theydont receive sufficient attention and investmentthroughout the lifecycle of the event, it can bedifficult or impossible for the host to achieve itsambitious long-term goals.

To this end, it is critical to raise aspirationsbeyond the event itself. For example, with theLondon 2012 Olympics, one of the primary goalsis to use the games to support and acceleratethe development of a new city center. Of course,it can be hard to get taxpayers excited about

solving a problem with a 20- to 30-year timehorizon, which is why the public relations pitchfor London 2012 focuses more attention on im-mediate benefits such as creating a sense of com-munity and reclaiming acres of derelict land thatwere blocking the citys expansion. In addition,a formal goal has been established to increaselong-term employment in the London boroughshosting the event. Another key objective is touse the 2012 games as a technology showcase.To that end, event organizers are setting up aLondon broadcast center hub, along with a 24/7press room for the media.

Another example is the 2014 Sochi Olympic Win-ter Games in Russia. As the largest winter sportsnation, Russia will host the winter Olympics forthe first time and will develop its first elite alpine

training and competition infrastructure that willbenefit athletes from across Eastern Europe andEastern and Central Asia.

A compelling legacy vision can be a significantadvantage during the bidding process. Organiza-tions such as FIFA and the IOC recognize that alegacy of abandoned infrastructure and economicruin tarnishes their images. It also underminestheir goal of having a positive impact on sportsand on the world in general. Aspiring hosts thatcan demonstrate a clear and compelling visionfor how facilities and infrastructure will be usedproductively after the event are likely to have acompetitive edge in the selection process.

Dont assume the desired legacy willhappen automaticallyA major event is an important catalyst forchange; however, it is not a magic cure-all. Hostcities and countries must not assume that a suc-cessful event will automatically deliver the desiredchanges and long-term benefits.

Creating a positive and lasting legacy requiresdeliberate effort, strong leadership, and sustainedcommitment and attention. For example, a facilitysuch as an Olympic Park is not designed to meetthe day-to-day needs of the local community; it isdesigned to meet the specialized needs of 40,000

media people, 20,000 athletes, a million visitors,and 300,000 volunteers and staff. Convertingsuch a facility into something more broadly usefultakes time, money, and effortboth before andafter the event.

Many host cities and countries have a high-levelvisionsupported by a lot of rhetoricabouthow the event infrastructure and investments willbenefit the community in the future. But all toooften, the vision and rhetoric are not supportedby a clear and actionable plan. As a result, theconversion process drags on for decades. Ornever happens at all.

Creating a positive and

lasting legacy requiresdeliberate eort, strong

leadership, and sustained

commitment and attention.


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Promote the legacy vision, but berealisticIt is important to actively and continuouslypromote the legacy vision so the public and other

key stakeholders do not lose interest. Peopleshould understand and take pride in the visionslofty goals. Yet, they must also understand andappreciate the enormous scale and complexity ofthe taskand take pride in that too.

Be open and honest about what the true benefitswill be and how long it will take to achieve thelegacy. And provide ongoing communication tokeep the public informed about the progress thatis being made.

Do not make the mistake of overstating or over-complicating the benefits of the event. In theirzeal to build support, many organizers overprom-

ise and then underdeliver. A major sporting eventcan produce a wide range of benefits, but it isnot a magic cure-all.

Also, keep the infrastructure and event plans incheck and actively avoid scope creep. It is tempt-ing to keep adding new features and initiatives,but at some point it is necessary to draw the line.Scope creep drives up costs, delays the schedule,and makes people suspicious that somethingmight be going wrong with the core activities.

Build a broad base of supportWinning and hosting a major sporting eventrequires strong support and collaboration from a

broad range of stakeholders, including the public,government, businesses, and local sports organi-zations. Lack of support in any of these areas canseverely undermine an aspiring hosts chances forsuccess.

Brazil won the right to host the 2016 Olympics bypresenting a united front that spanned the entirenationincluding the highest levels of govern-ment. Conversely, Chicago may have been put ata distinct disadvantage due to highly publicizedprotests from various parts of the community,

which surfaced late in the race giving little timefor the bid to effectively react and mitigate thismessaging. Timing here was crucial.

In some cases, a strong base of support can evenoffset material weaknesses in other key areas. Foexample, New Zealands remote location, smallpopulation, and lack of infrastructure would nor-mally disqualify it from attracting a top-tier eventYet its bid to host the 2011 Rugby World Cupwas successful in large measure because of thecountrys long rugby tradition and the publicsunsurpassed passion for the sport.

As part of the Olympic selection process, the IOCcommissions a public opinion survey for each cityon the short list. Cities with weak or inconsistentlevels of public support can expect to face a longuphill battle.

Reach across political boundariesThe long timescales associated with a majorevent often span changes in government andleadership. That is why it is essential for a bid tohave strong political support from all major politi-cal parties. Organizations such as the IOC andFIFA cannot take the risk that a shift in leadershipwill cause a government to reduce or withdrawsupport for the event. The need for broad politi-cal support is even more important for the poste-vent legacy vision, which will require an extendedeffort that carries on long after the event is overand the crowds go home.

One of governments most important roles isto provide financial guarantees and funding formajor infrastructure investments. To fulfill thatrole, government must design programs that en-sure sufficient funding and a sustained financialcommitment over many years, regardless of howleadership might change or which political partyis currently in power.

Hosts should start

inrastructure planning early,so it fts with their broader

plans and doesnt produce

inrastructure that is only

useul or the event.


14/2012

Get an early start on infrastructureplanningHosts should start infrastructure planning early,so it fits with their broader plans and doesnt

produce infrastructure that is only useful for theevent. Stadiums and other major sports facilitiesare an obvious requirement and usually get offto a fast start. However, supporting infrastruc-ture such as transportation, which is actually farmore complex to plan, often gets put off untilthe last minute. In fact, as the inauguration dateof the event never changes, delays result in costoverruns and can compromise the quality of theevent itself.

An early start on infrastructure planning helps en-sure a successful event. But even more important,it provides the basis for lasting legacy benefits.Hosts that get an early jump on planning have

time to thoughtfully integrate their event-relatedinfrastructure investments with existing plans fortransportation and other infrastructure. By con-trast, hosts that wait until the last minute oftenend up creating infrastructure that only meetsthe minimum requirements of the event. Forexample, they end up building a road that onlyserves to get people to and from the stadium, in-stead of investing the same amount of money onprojects that meet the event requirements whileimproving their overall transportation network.

Lodging is another type of infrastructure that canbenefit from an early focus, especially for smallercities with a shortfall of hotel rooms. By getting

an early startand collaborating with nearbycities it may be possible to house people innearby areas and transport them to the event,rather than building new hotels from scratch.Also, lodging for athletes should be designedwith legacy uses in mind.

For example, it might seem clever and efficient tobuild athlete apartments without kitchenssinceparticipants are unlikely to cook for themselvesduring the event; however, that small decision

can severely limit the usefulness of the facilitiesonce the event is over. The athletes village for theAthens 2004 Olympic Games was on the outskirtsof the city, off major public transport networks andwith very limited economic space included. As aresult, when the village was converted to low-costhousing after the event, there were challengeswith local services, shops and facilities that wereessential to successfully creating a new neighbor-hood.

Create a broad economic footprintThese events are becoming increasingly com-mercialized, with major global sponsors playing agreater role than ever. However, in order to help

ensure a broad and lasting impact for the localeconomy, organizing committees and host govern-ments must work hard to get small and midsizecompanies involved.

With the London 2012 Olympics, a consciouseffort is being made to get businesses all acrossthe United Kingdom involved in downstream op-portunities to help build infrastructure and deliverservices for the event. For example, Olympic train-ing facilities were deliberately scattered aroundthe country in order to spread the economicbenefits as far as possible. This share the wealthapproach needs to be applied from the verybeginning, before major investment decisions are

finalized.

Partner with the private sector on majorinfrastructure investmentsAs the required level of investment skyrockets, newand innovative financing models are starting toemerge. In particular, many host cities and coun-tries are now seeking business partners from theprivate sector to invest in infrastructure.

For the 2010 Winter Olympics in Vancouver,much of the infrastructure was created as a

joint effort between the organizing committee,government, and private developerswith de-

velopers having the right to use the facilities forcommercial purposes after the event is over. Thispartnership is expected to accelerate the processof converting event facilities and infrastructure focommercial and public use.

Brazil is following a similar approach for the 2014World Cup and 2016 Olympics. Event organizersand the government are partnering with privatebusinesses to help build or modernize facilities.After the event, the businesses will then operatethe facilities as concessions.

Governments should also be quick to recognizethe efforts and valuable contributions of external

sponsors. For organizations in the private sector,this public recognition is often a key benefit ofsponsoring the event. And providing such recog-nition costs the government virtually nothing.

Expect the unexpectedWhen planning for a major event, hosts shouldbuild significant contingency funds into thebudget. Although it is impossible to know inadvance exactly what unexpected problems willarise, there is no question they will arise. Thesenegative surprises can be originated from insidethe organization committee or can be causedby external influences at a local, national, andinternational level.


15/201

Deloitte member firms believe the case for hostinga major event is compelling, and that most hostsreceive benefits that significantly outweigh the

time, money, and effort they invest. Countlesspost-event impact studies support this claim. Yet,the idea of hosting a major event does not neces-sarily make sense for every city and country.

In some cases, due to climate or remote location,hosting a major event simply isnt realistic orfeasible. Clearly, a city in the middle of the desertis in no position to host the Winter Olympics. Andin extremely hot climates, even the Summer Olym-pics might present some formidable challenges.

In other cases, there might be other limitingfactors. For example, the City of Prague recentlydecided not to pursue an Olympic bid because it

did not believe the potential benefits were suf-ficient to justify the cost of bidding, and that themoney would be better spent on other activitiesthat produced more immediate returns.

An aspiring host that is not a good candidate fora particular event needs to recognize that fact be-fore wasting time and money on a futile pursuit.Also, there is always a chance that an unqualifiedhost might sneak through the selection processand win. There have been cases in the past wherethe winning bidder was unable to deliver on itscommitments and the event had to be movedelsewhere. Although this isnt common, it doeshappen, much to everyones embarrassment and

detriment.

Most of the selection criteria that make a host agood candidate are obvious or explicit. But thereare other important criteria that are less tangibleor publicized.

Leadership. Winning bids tend to beled by governments that can create andcommunicate a compelling vision and are

able to work across political boundaries.For example, the 2010 Winter Olympics inVancouver have been widely recognized forunprecedented collaboration across all threelevels of governmentnational, provincial,and municipal. Strong and effective leader-ship makes an aspiring host much moreattractive and greatly increases the chancesfor a successful event.

Passion. A high level of excitement andsupport from the public and other keystakeholders is also essential. In most cases,there needs to be a highly motivated andinfluential core group that drives the pursuit,

especially in the early stages. In SouthAfricas successful 2010 World Cup bid, thelocal football association was the drivingforce. In Vancouver, prominent businessmanJack Poole was the key to getting thingsstarted and keeping the process movingforward.

Unity. Successful bids tend to have strongsupport from the public, government, andbusinessand are able to show that thehost is willing to pull out all the stops tomake the event successful. In Vancouver,for example, a high level of public supportand strong tradition of volunteerism werekey factors in helping the city win the bid. InGermany, the 2006 FIFA World Cup bid wasbacked not only by the government but alsoby all political parties, the German businesscommunity, all professional football teams,and the general public (driven by the leader-ship of football legend Franz Beckenbauer).

Proven track record. Hosting a similareventeven on a smaller scaleincreasesa candidates credibility and chances for

success. For example, Brazils success athosting the Pan Am Games in 2007 helped itwin the 2014 World Cup bid, which in turnhelped it attract the 2016 Olympics.

At a minimum, aspiring hosts need to understandthe true costs and benefits associated with theevent to determine if there might be a better wayto achieve the same objectives for less money.

For some hosts, the right answer might be to settheir sights lower. New Zealand beat the oddswhen it won the right to host the 2011 RugbyWorld Cup, thanks to the countrys overwhelminginterest and passion for the sport. But, for othersports, New Zealand recognizes its inherent disad-vantages and chooses second- or third-tier eventswhere its chances for success are higher.

It is also important to recognize that event re-quirements can change over time. Recently, bothFIFA and the IOC have made it a priority to shifttheir events to new continentsparticularly Africaand South America, which historically have beenunderrepresented as hosts. This is an importantdecision factor for potential bidders to recognize,even in situations where it is not made explicit.That said, most candidates fail in their first at-tempt to attract a particular type of event, whichmeans it is often worthwhile to bid for an eventeven when it will likely be awarded to a different

part of the world. The knowledge and experiencegained serves as a dress rehearsal for a successfulfollow-up bid when the geographic pendulumswings back in the right direction.

What makes a good host?


16/2014

For the Winter Olympics, the IOC generally favorsmajor cities located close to an established skiresort. For example, Vancouver, with its close

proximity to the Blackcomb/Whistler ski areas, ishosting the 2010 winter games. Of course, forevery rule there is an exception. Since one of theIOCs overarching objectives is to promote sportsand foster the development of new sports facili-ties, the 2014 Winter Olympics were awarded toSochi, Russia, a small city on the Black Sea withalmost no existing facilities. As such, the eventwill require tremendous investments in newsports facilities and infrastructure for Sochi andthe surrounding areas. But if the 2014 WinterGames succeed at giving birth to a new andthriving winter sports resort, it may influencehow the IOC chooses locations in the future.

Finally, it is important to understand that theselection process for a major event is not justa numbers game. The message of Why mycity/country is the best positioned to host theevent and why now has to resonate with the

decision makers. Applicants need to effectivelycommunicate the reasons that make their citythe best suited to their country citizens and to

the organization of the major event. They needto promote what it takes to win versus what ittakes to effectively execute.

Candidates that seem superior in objective areassuch as infrastructure, estimated attendance,and financial investment do not always win. Theselection committees primary concern is to havethe best, most festive event possibleone thatcelebrates sports and promotes them in the bestpossible light to a global audience. Appealingto the selection committees heartsnot justtheir mindsis an effective and proven strategy.That is how New Zealand secured the 2011Rugby World Cup. For the 2016 Rio Olympics,

the appeal came from this and from the fact thatstrategically it seemed that it could host the bestfestival.

Hosting a similar event

even on a smaller scaleincreases a candidates

credibility and chances or

success.


17/201

Finishing strong

Major events are a high stakes game and asuccessful long-term outcome will still requirecareful consideration and an informed approach.Pursuing and hosting a major event is like a long-

distance relay race. The first three legsbidding,preparing for, and then conducting the eventare critically important. But a strong anchor leg iswhat ultimately brings home the gold.

In order to derive the maximum benefits, hostcities and countries need a clear vision for thepostevent legacy and a sustained commitmentto pursuing the vision. Thats the only way to

achieve the expected benefits and deliver a posi-tive and lasting legacy.

Pursuing and hosting a

major event is like a long-distance relay race.


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19/20

Contacts

Americas

BrazilEdgar Jabbour+55 11 5186 [email protected]

CanadaPaul MacMillan+1 416 874 [email protected]

Caribbean ClusterTaron Jackman+1 345 814 2212

[email protected]

MexicoEnrique Clemente+52 55 [email protected]

LATCOArmando Guibert+54 11 [email protected]

United StatesJohn BigalkeLHSC & Government+1 407 246 8235

[email protected]

Bob CampbellState Sector+1 512 226 [email protected]

Gene ProcknowFederal Sector+1 202 378 [email protected]

Robin LinebergerFederal Sector+1 703 747 [email protected]

Asia/Pacific

AustraliaSimon Cook+61 (0) 2 [email protected]

GuamDan Fitzgerald+(671) 646 3884 [email protected]

IndiaKamlesh K. Mittal+91 11 6662 [email protected]

JapanYuji Morita+03 6213 [email protected]

KoreaMin Keun Chung+82 2 6676 [email protected]

MalaysiaAzman M. Zain+60 3 7723 [email protected]

New ZealandAloysius Teh+64 4 495 [email protected]

SingaporePatricia Lee+65 6216 [email protected]

ThailandMarasri Kanjanataweewat+66 (0) 2676 [email protected]

VietnamPaul Meiklejohn+84 [email protected]

EMEA

AustriaGundi Wentner+43 1 537 00 [email protected]

Guido Eperjesi+43 1 537 00 [email protected]

BelgiumHans Debruyne+32 2 800 29 [email protected]

BulgariaDesislava Dinkova+359 (2) 8023 [email protected]

Central EuropeMartin Buransky+420 246 042 [email protected]

CISMaxim Lubomudrov+74957870600 [email protected]

CyprusPanicos Papamichael+357 22 360 [email protected]

DenmarkLynge Skovgaard+45 [email protected]

FinlandMarkus Kaihoniemi+358 20755 [email protected]

FranceGilles Pedini+33 1 40 88 22 [email protected]

GermanyThomas Northoff+49 (89) 29036 [email protected]

GreeceVasilis Pallios+30 210 678 [email protected]

HungaryCsaba Markus+36 (1) 428 [email protected]

IcelandGudmundur Kjartansson+354 580 [email protected]

IrelandHarry Goddard+353 1 417 [email protected]

IsraelChaim Ben-David+972 2 [email protected]

ItalyRoberto Lolato+39 [email protected]

LuxembourgDan Arendt+352 45145 [email protected]

Mid AfricaJoe Eshun+255 (22) 2116006

[email protected]

Middle EastAnis Jabsheh+9626 [email protected]

MoroccoFawzi Britel+(22) 94 07 50/[email protected]

NetherlandsHans van [email protected]

NorwayArve Hogseth+47 [email protected]

PolandMaria Rzepnikowska+48 (22) [email protected]

PortugalRaul Mascarenhas+(351) [email protected]

South AfricaLwazi Bam+27 (0) 11 209 [email protected]

SpainGustavo Garcia Capo+34 915145000 [email protected]

SwedenKim Hallenheim+46 (0)8 506 722 [email protected]

TunisiaAhmed Mansour+216 (71) 755 [email protected]

TurkeyGokhan Alpman+90 212 366 60 [email protected]

United KingdomMike Turley+44 207 303 [email protected]

Global

Greg Pellegrino

Global Industry LeaderPublic SectorDeloitte Touche TohmatsuWashington, DC

+1 202 378 [email protected]

Bill Eggers

Director, Public SectorDeloitte ResearchWashington, DC+1 202 378 5292

[email protected]

Karen Lang

Marketing DirectorGlobal Public SectorDeloitte Touche TohmatsuBoston, MA

+1 617 437 [email protected]


20/20

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Documents

Pellegrino Deloitte 2010