Host Cities Of Euro 96 example essay topic

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 lb 64 million gains as a result of England hosting the tournament. This was gained as a result of: "lb 40 million through VAT on ticket sales, merchandising, corporate hospitality and other Euro'96 spending. Betting tax from the lb 80 million of wagers was expected to contribute lb 5 million, together with lb 3 million from taxation on the incomes of competition organisers, and lb 16.5 million from companies paying corporation tax on commercial profit" (Dobson et al, 1997) This meant that the government made huge profits as a result of hosting Euro'96, and they only contributed to the organising, policing and promoting of the tournament with small National Heritage Department grants. The majority was contributed by the FA (Football Association), private companies, and the local authorities. The championships also had a massive effect on the hotel industry in the UK, with reports from Greene Belfield-Smith that as a direct result of Euro'96, average room occupancies and room rates were up by 14 and 22 per cent respectively, outside London in comparison to June 1995.

In Manchester there was an even grater rise, with a 57 per cent increase in rooms yield and room occupancy. This was fantastic for the hotel industry with such great increases, but the shine was some what taken off in some areas of the country as a result of the loss of business and conference trade. The report also describes the gains made by the official sponsors of the tournament as great both financially and as a result of brand recognition. The sponsors initially between them paid UEFA (Europe's governing body of football) lb 38.5 million, that's lb 3.5 million per sponsor. The tournament was watched by millions on television, with the gross cumulative television audience estimated at 6.7 million. This boosted television advertising revenue by lb 10 million.

However the hosting cities where unlikely to benefit from these profits. Many benefited financially from the tournament, replica football kit sales where up, flag manufactures had their busiest period for years, making over 60 times the usual amount and many local business' and business men where making massive profits i.e. Keith Prowse an owner of a local hospitality company, made profits of lb 1 million, thanks to Euro'96. This was more than double their usual profits. Retail Outlets, shops, pubs and restaurants benefited enormously, in particular pubs and restaurants because food and drink accounted for around 30 per cent of Euro'96 related expenditure. This was of course this was due to the massive influx in visitor to the UK during the tournament. One pub in Sheffield showed an increase of profit on one day from lb 250 to lb 2,500.

This shows how great the effect of Euro'96 was. Unfortunately while some were receiving a great financial boost from Euro'96, a report compiled by HSP C markets highlights the dampening effects on parts of other sectors such as National lottery sales and cinema attendance. Transport networks in the hosting cities benefited with a large increase in travellers directly related to Euro'96. Airports, trains, taxis, bus services and even ferries all reported a significant boost to the number of passenger and subsequently profits. Job creation was another benefit which was a result of Euro'96, as many companies had to hire additional staff to help cope with the influx of visitors e.g. hotel, transport, stadium and restaurant staff etc.

However This has a down side, as the jobs would generally be only short term, leaving many unemployed after the event has taken place. When reviewing the overall impact of Euro'96 the Gratton et al report states: "In total over 280,000 visiting spectators and media came to the UK to attendEuo'96 matches, spending approximately lb 120 million in the eight host cities and surrounding regions. These visitors generated over 900,000 bed-nights in hotels, guesthouses and campsites, and created over 4,000 full-time equivalent job years. The average spectator attended 1.24 matches, staying in each respective host city for an average of 1.05 nights and had an average daily expenditure of lb 77.00 of total visitor expenditure, 35% went on food and drink, 21% on accommodation, 14% on travel within the host cities, and 12% on souvenirs and shopping" (Dobson et al, 1997) As you can see the host cities of Euro'96 benefited economically from the tournament in many different ways, but what the report hasn't discussed is the money spent in preparation for the event, which can lead build to a devastating amount.

A couple of the eight football stadiums used to host the matches, had to be re-developed. Although the developments where usually only minor changes. Money was also spent on developing the hosting cities, for example building or developing hotels, and developing infrastructure i.e. roads, so that the city can cope with the invasion of supporters. These developments although cost money, provided the cities with improved facilities for the future. An estimated figure of 20 million was also spent on tight security throughout the tournament, this was a priority. Total expenditure figures for euro'96 where unfortunately unavailable, so a full conclusion on whether the event was an economic benefit or not, can not be accurately made.

However figures have been obtained for other mega events and will be analysed later. The effects on the nation and the host cities as a result of Euro'96 where not just economical, there where also many social effects both positive and negative. Because the tournament was such a huge success both on and of the pitch it gave the people of England a sense of pride, and for a while after the tournament people had feel good factor and spirits where up. In addition because there was no major violence during the event, the image of English football and England as a whole was changed, as this success was witnessed by millions watching television around the world. All effects however weren't positive. Pollution in the cities was increased greatly due to increased vehicles on the road and litter etc.

Also many residents did not take kindly to the intrusion of the visiting supporters and felt uncomfortable in their own community, this did cause some tension. Some were also calling for the money used to organise Euro'96, to be spent on other more important things such as the NHS and local schools. Whether or not the benefits of hosting Euro'96 outweighed the negative points will be discussed in the latter part of the assignment. This next section will look at the Olympic games and much like in the last section, will investigate the positives and negatives of hosting it. The information gained will help to reach an overall conclusion and answer the assignment question. Unlike in the previous section where the only example used was the Euro'96, this section will use a number of examples from different Olympic games, highlighting both the advantages and the disadvantages of hosting the Olympics.

This year was the 10th anniversary of the 1992 Barcelona games. This was celebrated not just because of its sporting success but also because it's lasting social and economic success. Before the games in 1992 Barcelona was in decline, so the Olympics was used to implement an imaginative, wide ranging urban renewal plan that transformed its decaying industrial fabric into the fantastic city it is today. The Spanish government utilized the opportunity to launch their country as a major player in the European Economic Community.

Before the games only 2.9 million passengers passed through its airport in 1991, and tourism was just a mere 2 per cent Barcelona's pre Olympic GDP. This year however, resulting from the success of the Olympic games all them years ago, 21 million passengers used the airport and percentage tourism contributes to Barcelona's GDP is 12.5 per cent. Foreign visitors increased from 1,874,734 in the games year in 1992 to 2,663,887 in 1994.12,500 long term new jobs where also created, mostly because of the new hotels built for the event. Barcelona was estimated to have spent $10 billion on a massive renewal program. The city estimated to have developed its infrastructure the equivilant of 50 years in just a period of eight years surrounding the games in 1992. It invested lb 5 billion in a ring road, a new airport and telecommunications system and an improved sewage system.

It also spent $2.4 billion developing its waterfront from its old worn down state, into a new state of the art complex containing the two tallest towers in Spain, one luxurious hotel and a modern office building. Although this did cost a fortune, Barcelona has been reaping the massive financial rewards ever since, and it is now on of the most popular tourist destinations in Europe. Barcelona is a host city that has definitely benefited from hosting a mega-sporting event, effectively the city went from depression to economic boom. As it has been shown hosting mega events and in particular the Olympic games can provide a chance to show your country and city to the world. This is an opportunity that Barcelona grabbed with two hands, however things are not always this simple. In 1996 the Olympic games was hosted in Atlanta and although the games was a massive success on the sporting front as many records where smashed during the games, many people remember most the fact that there was a terrorist attack.

This attack resulted 110 injured people and tragically one person dead. This was seen by millions all around the world and had the potential to have a dramatic effect on tourism in Atlanta in the future. Fortunately for the host city this was not the case and tourism was still boosted by the games. As a result of the Olympic games in 1996, residents in Atlanta has been left with a state of the art city, which has improved their quality of living. They now have a $189 million stadium, 1,400-acre Georgia International Horse Park, the $17 million Wolf creek shooting range complex, a tennis facility at Stone Mountain, and the $10 million Lake Lanier rowing centre amongst other things. Hosting the Olympics has left Atlanta with an enhanced reputation as a World-class location for sporting events, conventions, and leisure travel.

A report produced by Event partners inc on the Atlanta games states that the total estimated economic impact for Atlanta was between $3.5 and $4.0 billion. The estimated $2.29 included here for direct spending in Atlanta also includes $650 million in facility construction spending for labour and regionally produced materials. It was estimated that the total purchases for outside Atlanta was $100 billion. A large amount of the money spent organising the games was provided by non-Atlanta sources such as T.V. rights fees, national and international sponsorships and ticket and licensed product sales to no-Atlanta ns. The report also says that: "In addition to tourist related industries, many other industries are positively impacted by the spending related to the games. Each industry within Georgia has benefited or will benefit from the new money spent for the games and the subsequent re-spending of these dollars" (event partners Inc, 2002) This backs the view that many benefit financially as a result of hosting the games.

The report also published statistics (appendix 1), these show the employment and economic impact on different industries. As you can see industries ranging from retail trade to health services benefited, with a total of 77,026 new jobs and a $5.1 billion economic boost. In the recent 2000 Sydney Olympics similar increase where made, with an estimated 100,000 new jobs and a $6.3 billion economic boost (statistics provided by the financial management for the New South Wales treasury). Hosting the Olympic games can be very beneficial to the host city both economically and socially, but the success does not come with out risk.

Billions of pounds are usually spend just in preparation for a games, for example it has been reported that 300 million where be spent on security costs alone for the 2002 winter Olympic games held in Salt Lake city, in addition to $1.7 billion operating costs. If anything where to go wrong the effects on a city could be terrible, with a city in terrible debt. Still the competition to host the Olympic games and any other mega event is always tough, as most nations and cities fight to be the host. This speaks for itself, why would countries risk hosting an event if the positive effects did not outweigh the negative.

It is essential that if millions is to be spent on new facilities for an event, that they will be put to good use for many years after and make some return on the initial investment. This was the case in Atlanta and Barcelona, as explained. However for the recent world cup in Japan and Korea spent $6 billion on 17 new stadiums where built and 3 where refurbished to host the event. Now not even one year on, these stadiums are rarely used and if they are they are never full to capacity. Usually used for soccer, which attracts on average around 3, 00 fans per game to 45,000 seater stadiums.

Sloan estimates that Japan and Korea spent in excess of $5.6 billion on infrastructure for the event. Now the world cup is over there is no need for all the stadiums, so economically Japan and Korea will lose out and pay the cost for huge expenditure. During the time that a city hosts a mega event, an effect takes place which results in an economic boost for a large number of industries from increased spending. This effect is known as the multiplier effect. The notion of multiplier is explained as: "Direct spending increases which induces additional rounds of spending due to increased incomes that occur as a result of additional spending" (Matheson and Baede, 2002) Basically money made in the host city as a result of the event is then re-spent in the city, with earnings increasing for shop owners for example, who will then spend more money in the city.

It is a knock on effect. However sometimes as a result of this industries and people from outside the hosting city also benefit, this is known as a leakage and is explained later. When analysing statistics evaluating economic impacts of hosting mega events it important that a couple of effects are taken into consideration to gain a more accurate conclusion. These would be the crowding out effect and leakages. With out taking these into consideration the economic impacts of the event will be exaggerated, causing people to think that the economic impact to the host city was greater than it actually was.

Leakages as mentioned is when money or jobs etc generated by the games are leaked out from the hosting city to others outside industries and people. For example a pubs in the hosting city may have a massive increase in sales and profit so will therefore need increased amounts of products to sell. This would mean that a company from outside the city providing these products would also profit financially. Sometimes when figures are published showing how industries have benefited from the games or how employment has increased, they fail to mention that a percentage of these profits or jobs will not impact the hosting city.

Therefore the success to the city can be portrayed in a false light. The other effect of hosting a mega event is the "crowding out" effect. This happens to all host cities when a mega event takes place. It is when the supporters of the event displace regular visitors, therefore the hosting city loses the money it usually makes and could also result in regular visitors becoming disgruntled and may choose not to visit again. Now the city may lose some future income it would have received..