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Economic Advantages of Mega Events
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Over past years there has been an on going debate as to whether or not hosting so called “mega sporting events” is beneficial to the hosting nation and cities, either economically or socially. In the early years of mega events the view that hosting one of these events was an economic burden was the view of almost everybody who mattered. However after a profit of $ 200 million profit was generated by the 1984 Los Angeles Olympics, many peoples view’ changed. According to Matheson and Baede 2002, “The prevailing perception seems to be that a properly run Olympics generates millions, if not billions of dollars in profit for the host nation”. (Matheson and Baede, 2002) In 1984 Los Angeles was the sole bidder for the Olympics, today cities fight for the chance to host these mega events because usually of the promise of a financial windfall. Does this potential economic windfall justify the substantial costs and risks? There are many people and sources who view staging these events as a chance to change the fortunes of the hosting city, but equally there are still many who say these events bring along with them to many problems both economical and social. The aim of this assignment will be to investigate and analyse mega sporting events and evaluate and conclude on whether or not hosting these events actually bring with them social and economical advantages or disadvantages. Examples of mega event such as the European football championships, the football world cup and the Olympic games will be used and examined to see how the host nations and cities have been either positively or negatively effected, both economically and socially, over the years. After this analysis of these events has been completed, an overall perspective on whether or not the positive impacts outweigh the negative impacts will be formed. This will be the basis for the final conclusion and will help answer the assignment question. Many sources will be used to help reach the final conclusion, including books, reports, journals, newspaper articles etc. Firstly, mega sporting events are usually the focal point of an athlete’s, footballer’s, swimmer’s etc, season or even career. They often represent the highest level at which they can compete. Examples of mega events would be the football World cup, the Olympic games, the US golf open, The super bowl, and even more familiar events such as the FA cup final. Each of these events usually happen on a consistent regular basis, whether it be annually like the FA cup final and the US golf open, or every four years like the World cup and the Olympics. These events frequently attract millions of spectators to a nation and it’s cities as well as having a good percentage of the rest of the world watching from afar on Television. This means that the eyes of the world are on a nation as each mega event unfolds, whether this is a burden or not will be discovered later. In 1996 England was handed the responsibility of hosting the European football championships (Euro‘96). It was vital that this mega event ran smoothly as English fans and in particular football fans had been branded as thugs and hooligans, this therefore was the perfect opportunity to transform the image of English football. This was also the first world-renowned sporting event England and in fact the UK had hosted since the World cup back in 1996. A report on Euro‘96 was written by Dobson, Holliday and Gratton in 1997. This report analysed the happenings at Euro’96 and explains the effects that the hosting the event had on the nation and it’s individual cities. The report views Euro’96 as an overall success both on and off the pitch. It states that economically Euro’96 provided England with many benefits. A grand total of 1.2 million tickets where sold for the tournament, with a total of 1.18 million actually attending the matches. A report By HSBC Markets (September 1996) estimates an injection of an extra 3 per cent on Britain’s net earnings from travel and tourism in the second quarter of 1996 and an extra 0.25 per cent on UK exports of goods and services as a result of Euro’96. The report estimates that the impact on the whole economy as an added 0.1 per cent on British Gross Domestic Product (GDP), in the period from April to June, a quarter of the total growth of 0.4 per cent. The Daily Telegraph 1996 stated “ the tourist boom during the championships helped push Britain’s trade balance into its first surplus since the beginning of 1995. The boom affected a range of industries e.g. super market sales during the tournament shot up by a massive 55 %, and even clothing and footwear sales rose by 6.75% in June.” Dobson’s et al, report showed many more economic benefits. The report states that Deloitte and Touche estimates that the government experienced £64 million gains as a result of England hosting the tournament. This was gained as a result of: “£40 million through VAT on ticket sales, merchandising, corporate hospitality and other Euro’96 spending.
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