Building a Legacy

Sports Mega-Events Should Last a Lifetime

Mega-sporting events can transform a city. Forgotten neighborhoods get desperately needed makeovers. Massive clean-up efforts curb smog and pollution. Transportation upgrades enhance mobility. Yet for every story of a city cleaned up, there is another of lingering debt and disrepair. Only a few large-scale events live up to their full potential. Even fewer deliver the promised long-term rewards. But for cities and nations that focus on both the immediate and the longer term, they do more than simply host an event, they build a legacy.

When the International Olympic Committee began its search for a host city for the 2012 Olympic Games, the options were plentiful. In addition to the shortlist of candidates—London, Madrid, Moscow, New York and Paris—cities such as Rio de Janeiro, Istanbul, Havana and Leipzig were also in the running. The world watched as the candidates created glossy bid books, offered elaborate presentations and engaged in intense last-minute lobbying. Each city painted a positive cost-benefit picture, demonstrating rigorous planning techniques and world-class implementation teams.

In the end, London won the privilege to host the games and is now planning to reap the rewards. Cities and nations that host such events, and manage them correctly, can expect to increase tourism, create jobs, improve their infrastructures, and boost demand for products and services. The prospective economic returns are unmistakable and capturing them is what every host should be able to do well, or well enough (see sidebar: Aim for the Quick Wins).

However, host nations are far less adroit at capturing the longer lasting, less tangible benefits that can result from a mega-event. These rewards reach into every part of an economy and culture by reinvigorating communities, improving health and educational systems, and cleaning up environments (see figure 1). Hosts tend to treat mega-events as prestige projects that are justified (accurately or not) through a measurement of tangible benefits minus tangible costs. Countries tag on some social programs to help make their case and obtain local support, but both the benefits and the add-ons are rarely integrated into broader national or regional strategies.

A mega-event should be incorporated into a comprehensive national strategy that captures the tangibles while also advancing a nation’s social and economic development, inspiring passion and national pride, and building a global reputation—all of which can last a lifetime.

Capturing the “Intangibles”
Host cities and nations that think beyond the requisite costs versus benefits of a mega-event will be in a stronger position to achieve the longer-lasting, less tangible and more emotional aspects that such events should inspire. Barcelona did it. How else do you explain that 10 years after the 1992 Barcelona Olympic Games, 40,000 people gathered in Montjuic stadium to celebrate the anniversary? In our experience, any host can be a Barcelona if it believes the tangibles and intangibles are greater than the sum of their parts. The most successful hosts begin by building a legacy in three areas: society, sports and the environment (see figure 2).

Building a social legacy. Large-scale sporting events can do a world of social good. The excitement of being chosen to host an event can be infused directly into communities, schools and other areas, with powerful results. The benefits continue to accrue well after the event is over and are self-sustaining, meaning they either require no more investment or they have local sponsors that are committed to continuing the program.

Revitalize local communities. Hosting a mega-sporting event provides an opportunity to influence the pattern of urban development. For example, Athens used the 2004 Olympic Games to improve the city’s notoriously congested transportation system. Seoul used facilities built by private contractors (before the 1988 Summer Olympics) to alleviate urban housing shortages. London plans to build its Olympic Park in the Lower Lea Valley, an area ripe for redevelopment. Barcelona used the Games to regenerate its run-down urban edges. And with our help, the organizers of Torino 2006 took an innovative approach toward revitalization, moving its headquarters from Lingotto to corso Novara, a depressed area of host city Turin, where they renovated two abandoned buildings. The committee gets four times the office space it had at Lingotto and corso Novara, and after the event, secures office space for more than 1,000 employees.

Improve education and cultural values. With a little creativity, the public’s interest in a mega-event can be used to improve education. Again, Torino 2006 provides a good example as the organizing committee works with Italy’s Ministry of Education to create an educational program for schools that promotes Olympic values and sports disciplines. One program, “One School One Country,” is designed to promote learning in science, technology and the cultures of other countries. London 2012 is following suit, proposing to launch an ocean clipper, the “Olympic Friendship,” at the Beijing Games in 2008.

Also, mega-sporting events can promote cultural values as behaviors valued in sports—hard work, discipline, teamwork, fairness and respect for others—are applied to all aspects of society.

Develop critical skills in the workforce. The local workforce is one of the major beneficiaries of a mega-event in both the short and long term. Skills development programs should reach beyond sports to also develop talent in areas that will be of lasting value to the host city or country, including program management, engineering, tourism, security, marketing, management and leadership. In Atlanta, college students were given broadcast internships and women were offered apprenticeships in the construction industry. The danger is importing too many skilled workers rather than teaching local residents new skills. To avoid this, organizers should ensure that a certain percentage of workers are local residents.

Inspire national pride and unity. The prestige and competitive spirit associated with hosting a mega-sporting event can leave a legacy of national pride and unity. If done right, host nations can begin to break down racial, ethnic, gender and other forms of discrimination. This was vividly illustrated during the 1995 Rugby World Cup, which took place after only one year of democracy in racially divided South Africa. President Nelson Mandela wore a Springbok team jersey adorned with Afrikaner captain Francois Pienaar’s number six, widely seen as a sign of reconciliation.

Media coverage can help bolster national pride. Sydney launched a visiting journalists’ program in which travel writers received fact sheets, photos and video clips that showcased the city’s attributes. The city also provided 100 work stations, a 500-seat news conference center, a briefing and interview room, image resource library, travel help desk, bar and bistro. Sydney’s media efforts are said to have generated more than US$2 billion worth of publicity.

Atlanta didn’t fare as well. Although the 1996 Atlanta Olympics was successful in a number of areas, transportation issues, the Centennial Park bombing and severe heat and humidity drew a raft of negative press coverage, with the press renaming the city “Hotlanta.”

Building a sports legacy. A sports legacy is the most obvious outcome of a mega-sporting event. Sports can contribute to the health, well-being and identity of individuals, communities and an entire nation, not to mention inspire passion. Consider the pride Canadians have for their national hockey team, or the near religious following sports fans in India have for cricket. In building a legacy, host cities and nations must stoke the competitive juices of local residents, encourage their participation, and use sports to improve brand image and commercial value.

Develop competitive skills. Because competitive performance of the national team is key to a successful mega-event, host countries are encouraged to develop their athletic prowess well before the event. Australia, for example, got a wake-up call during the 1976 Montreal Olympics when its athletes won just one silver and four bronze medals. The need for skills development became the catalyst to invest in the Australian Institute of Sport (AIS), which offers scholarships to some 700 athletes a year and nurtures their athletic careers. It must have worked, because at the 2000 Olympics, Aussie scholarship holders won 7 gold, 11 silver and 13 bronze medals.

Improve brand image and commercial value. A mega-event should be a boon to commercialization. Governments use such events to increase their commercial value, while sponsors use them to improve their brand image. For example, in our work with the South African Football Association, we identified ways to increase existing revenues and define new revenue streams—resulting in a significant increase in sponsorship and broadcasting rights. In France, football clubs are still enjoying the commercial benefits earned at the 1998 FIFA World Cup, with the clubs increasing their gate take by 65 percent between 1997 and 2001.

Building an environmental legacy. Environmental considerations are becoming a major issue in the selection of Olympic host cities. In fact, the IOC added “environment” as the third principle of the Olympic movement—right behind sport and culture. With this in mind, the Chinese government is striving to make Beijing 2008 the “Green Olympics.” Beijing city officials have promised that the city’s air will be as clean as Paris’ by 2008, and are already taking steps necessary to enhance its environmental infrastructure, improve its ecological surroundings, and organize environmental communication and education activities.

Legacy as Priority: Where to Begin
Mega-events are an opportunity to connect emotionally with a worldwide audience and advance the nation’s social and economic development. In our experience, the strongest legacies result when nations use a comprehensive program comprising the five components shown in figure 3. When initiated at the bidding stage and refined throughout the mega-event life cycle, the program ensures that the goal of capturing a legacy is integrated into the overall vision.

Manage stakeholders. A legacy program begins with getting buy-in from all interested parties including political and community leaders—ranging from high-ranking government officials and small-town legislators to corporate CEOs and grassroots community organizers. These leaders must be convinced of the importance of building a legacy, as opposed to simply capturing the economic rewards. For example, in our work with Trinidad and Tobago’s bid to host the Cricket World Cup 2007, members of both political parties held discussions to ensure everyone was satisfied with the longer-term benefits government spending would spur. Obtaining buy-in from local government officials is usually a prerequisite for obtaining resources and new legislation. For example, in preparing for Beijing 2008, lawmakers had to write new legislation to deal with environmental and conservation issues. Getting private-sector leaders aboard early also lends credibility to the goal.

The legacy program should have a separate governance structure. Appointing a senior-level director of legacy planning conveys the importance of long-term goals and drives planning. Senior leaders of the program should be held accountable for meeting legacy objectives. Similarly, the legacy program should be monitored and managed with the same rigor as the event program. By creating detailed measurement systems, host cities and nations can determine whether or not they are realizing the desired benefits (see figure 4).

Consider the larger social and economic picture. Every legacy program should be built around a nation’s larger social and economic framework. In other words, mega-events must fit into a wider national agenda, and reflect the country’s longer-term development goals. For example, in South Africa, a public railway system between Johannesburg and Pretoria has been on the agenda for years; hosting the 2010 FIFA World Cup forced a clear deadline for completion.

Mega-events often become catalysts to spur large-scale development projects, which are especially important for developing nations. Equally important are the social development projects. If devised in isolation and not as part of the national social agenda, they will often fail in the long term. For example, plans to use Olympic Villages as future public housing facilities have met with mixed results depending on how well organizers coordinated with municipal planners who know where the facilities would have the biggest impact.

Mobilize communities. Building a successful legacy depends on how well a nation or city mobilizes its citizens. Communities respond well to publicity, media efforts and corporate investments. Indeed, even the best programs will fail without well-known, effervescent and energetic local people leading the way. South Africa has enjoyed a good deal of success with its event ambassadors program, in which prominent city officials and high-profile business leaders spearhead various committees and initiatives.

Yet the most effective mobilization efforts go beyond publicity to actively engage communities in identifying the social and economic programs that will have the biggest impact at a local level. While the mega-event serves as a catalyst to inject funds, attention and activity around various programs, local communities will take these programs forward to create the lasting legacy. Vancouver, for example, is working with community groups to build legacies in sports, arts, literacy and volunteerism in preparation for the 2010 Winter Olympics. Its “Playground to Podium” program is designed to introduce local communities to the benefits of lifelong physical activity.

Leverage event resources. Who should pay for the legacy program? To a large extent, hosts can use existing event resources to support both event planning and legacy initiatives. For example, corporate networks that begin with event sponsorships can be transformed into longer-term sponsorships that demonstrate a commitment to the region. The event infrastructure can serve dual roles during and after the event while marketing for the mega-event can incorporate messages that fit the national branding strategy. And, as noted earlier, the influx of skills and talented people required to stage a mega-event can be transferred into the local workforce.

Build the national brand and increase sponsorships. A major element of a legacy program, particularly for emerging economies, is the global exposure that a mega-event offers. Making sure the message that the world receives is the right one requires a strong sense of brand—not just for the mega-event, but for the entire nation. Increasingly, the brand message must convey a social agenda in addition to the traditional commercial or tourism elements. South Africa, for example, seeks to change how the world views not only South Africa but the African continent as a whole. Beijing is eager to appear on the world stage with positive associations. Actively managing the media and marketing activity before, during and after the event is necessary not only to prevent negative branding (remember “Hotlanta”) but to ensure that the national messages are broadcast properly.

With this in mind, rather than following the traditional method of funding a legacy program through a sponsorship budget, businesses can fund them via budgets for corporate social responsibility or social investment. “Social responsibility” has long been considered a corporate duty, so smart hosts will encourage their business partners to capitalize on it to take advantage of the legacy investment opportunity.

Lasting Legacies
Hosts of mega-sporting events should no longer be satisfied with simply securing the tangible economic benefits that such events provide. They can have so much more, from community enhancements to innovative additions to the educational system. The mega-event should not be viewed as a strategy on its own. Rather, it must be built into a nation’s social and economic development plan as a whole. By devoting the time and dedicating resources needed for planning and implementation, hosts can secure a positive future long after the event concludes. It is possible, indeed vital, to leave behind a lasting legacy.

When discussing Montreal’s winning bid for the 1976 Summer Olympics, a confident Mayor Jean Drapeau assured taxpayers that, “The Olympics can no more have a deficit than a man can have a baby.” It was a statement he would never live down: The initial cost estimates of US$310 million soared to US$1.5 billion. Nearly 30 years later the bill is still not paid off, earning the Olympic Stadium known as the Big “O” the dubious nickname of the Big “Owe.”

More recently, many of the venues from the 2004 Summer Olympics games in Athens are already falling into disrepair, having yet to find permanent post-game use. Greece is also suffering from a 6 percent budget deficit, a number that breaches the European Union’s stability pact and is largely attributed to the games.

As these examples illustrate, hosting a mega-event is a risky proposition. Financial benefits that once seemed solid can crumble if organizers don’t keep a constant eye on both near- and long-term planning. But with the right strategies in place, the tangible benefits can be both significant and long-lasting.

Infrastructure. Perhaps the most important and enduring rewards involve infrastructure improvements. Barcelona estimated it built 50 years’ worth of infrastructure in just eight years, including waterfront developments, improved sewage systems, a new airport and telecommunications system. Even with Athens’ mixed Olympic record, infrastructure improvements, which included new roads, metro and suburban trains, launched the ancient city into a modern European city.

Jobs. A mega-event not only brings an influx of jobs during the games, it can help boost employment numbers in both the near and long term. When Manchester hosted the Commonwealth Games in 2002, it spent about US$850 million, which in turn helped generate 16,000 jobs lasting from a few months to more than a decade. For Sydney, the games brought US$3 billion in business to the region.

Tourism. One of the major benefits of hosting a mega event is the immediate boost to tourism. Tourism spending injects immediate cash flow into the local economy, stimulating the service sector long before and after the actual event. Indeed, anticipation in the months and years ahead of an event drives tourists to host cities.

For second-tier cities, this boost is particularly pertinent. Tourism in the sleepy town of Lillehammer soared 43 percent in the four years preceding the 1994 Winter Olympics. Calgary saw a similar boost. Between 1972 and 1985, the annual growth rate of international visitors to Calgary held steady at about 0.25 percent. In the three years leading up to the 1988 Winter Olympics, tourism jumped to 8 percent, then soared to 12 percent during 1988. The city then held on to an increase of 3.25 percent annual growth for the next five years.

These are the quick wins that create the foundation for long-term successes—the ripple effects that touch all other aspects of the community. Getting the strategies in place early will help ensure that the tangible benefits remain solid and strong for years to come.

Consulting Authors
Jamil Satchu is a vice president in A.T. Kearney's Chicago office.

Emmanuel Hembert is a consultant in A.T. Kearney's London office.

Nicolass du Plessis is a consultant in A.T. Kearney's Chicago office.

The authors wish to thank their colleagues, Simon Bell, Lesley Pan, Alessandro Protasoni, Massimo Vai, Chris Callieri and Florence Tsui, for their valuable cotnributions to this article.