Hypothesis Olympic movement control models in development of upcoming Olympic Games

Фотографии: 

ˑ: 

Dr.Hab, Professor V.N. Zuev1
Ph.D., Professor P.G. Smirnov2
1Tyumen State University, Tyumen
2Tyumen State University of Civil Engineering, Tyumen

Keywords: Olympic Movement, Olympic Games, evolution, hypothesis models, economics, television.

The Olympic Movement in the modern era represents an integrated, organic phenomenon, a constructive social establishment. It goes without saying that this community includes well-established steady social groups with evolutionally developed format of activity of the people, institutions, norms and traditions. Intensive development of the Olympic Movement in the recent decades, the ever-growing political and socio-economic importance of the Olympic Games have spiked the interest to the main sport forum of the planet.

The XXII Olympic Games, Sochi 2014 will be best remembered for not only triumphal victory of the Russian Athletes, but also colossal range of sports in infrastructure development, as well as practically ideal organization and management of all segments and technologies of this days-long sport festival.

The Sochi – 2014 Project will be also associated with unprecedented for the Olympic Movement expenditures, which in aggregate (from many sources of funding and for various sites) amounted to nearly $US50 billion. These and some other considerations, such as: contradictory forecasts on the destiny of the future of the Olympic Games and the Olympic Movement, which are predicted by some experts, researchers and the IOC representatives [9];[12];[13], changing socio-economic situation in many countries of the world; expanding and deepening globalization take center stage of international sport community in search for an optimal model of the Olympic Games.

When modeling the evolution of the Olympic Games in the next 16-20 years (4-5 Olympic cycles) the scientific and theoretical study of this article was stipulated by the ongoing global financial and economic crisis (which is not predicted to end according to the leading economists of our time, although the causes of the crisis are generally known, so as means and ways out of it); the state of stagnation, in which the leading world powers are at the moment (with the possible exception of China, Brazil and South Africa) [1]; [2]; [3];[5].

The purpose of the present study was to design hypothesis models of the evolution of the Olympic movement and the Olympic Games in 2014-2035.

The following research objectives were identified as instrumental for achieving this purpose:

- analyze the development factors of the Olympic Games in recent decades;

- describe the main stages of, and research approaches to, the elaboration of potential Olympic Movement and Olympic Games development models;

- identify theoretical standards of social and economic development of the Olympic Movement in line with fundamental economic patterns.

Research organization: in this research, we applied retrospective analysis and long-term scientific forecast methods employing virtual modeling techniques and assuming three models of the Olympic Movement and the Olympic Games development (Fig. 1).

Fig. 1. Olympic Movement management and Olympic Games development models

Model I, optimistic. The Model is based on the following facts and assumptions:

- stable growth of popularity of the Olympic Games as a major global social, political and economic phenomenon;

- dramatic growth of the IOC budgets within the last 16 – 20 years. Thus the profits generated by the sale of broadcasting rights have grown by 52% during the 2008 – 2012 cycle only. Emerging economies (China, Brazil, Republic of South Africa, etc.) are to take more active part in the process. For example, Beijing paid the IOC nearly US$ 100 m. for broadcasting the Olympic Games from London in 2012;

- in developed market economies, competition for TV broadcasting rights is to remain very intense. This refers in the first place to the US where the NBC TV channel paid about US$ 2 bn. for the right to broadcast the most recent Olympic Games [2]; [4]; [6]; [7];

- the Olympic events web and mobile broadcasting rights price is to grow at an accelerated pace;

- the Olympic Games sponsorships are to remain very generous. According to the IOC, in 2012 – 2016, it planned to receive about US$ 1 bn. under the sponsorship contracts.

Thus the above Olympic Games development model can be characterized by creative development of the Olympic Movement, and the IOC budget growth within the next 16 – 20 years (Fig.2).

Fig. 2. Model I, optimistic

Model II, realistic optimal, the most probable. The model is based on the following factors:

- the number of countries participating in the Olympic Games is to stabilize, with a trend to a slight growth;

- different sports are to be rotated in the Games program in a rational way and on a wider scale;

- competition between countries and cities for the right to host the Olympic Games is to remain intense;

- the IOC’s contracts with TV companies and some National Olympic Committees concerning broadcasting rights and funding distribution schemes are to remain legally qualified. The contracts include, among others an agreement between the IOC and the US NOC, under which the latter’s share of revenues generated by broadcasting contracts is to be reduced from 12.75% to 7%, while sponsor funding allocations are to go down from 20% to 10%. Note should be made that the relevant 20-years’ contract is to become effective from 2020 only [5]; [6]; [7];

- IOIC’s XXIV session noted that the organization had significantly improved its financial situation recently and possesses a ‘safety cushion’ worth over US$ 600 m. [10]; [11].

The model presented in Fig. 3 appears the most probable; still, one more version of the Olympic Movement development pattern till 2030 is worth consideration.

Fig. 3. Model II, realistic optimal

Model III, pessimistic, is based on the fact that the IOC is indeed a large international non-government organization subject to all the social and economic challenges faced by such international associations. These issues include the following:

- cities are still to compete for the right to host the Olympics, though in a less competitive environment;

- the situation is further complicated by dependence of the IOC’s financial well-being on TV companies based in the USA, whose (consolidated budget) obligations have rocketed recently and exceed US$ 17 trillion [9]; [12]; [13];

- under such circumstances, the US Government might resort to the state regulation tools in order to control international business activities of national corporations, i.e. impose certain limits to enforcement of contracts made between TV companies and the IOC;

- besides, there is one more complication stemming from the very nature of the Olympics. It is known that the IOC Corporation’s product manufactured with the tool called the Olympics is a show. From history, we know all too well, that in the times of deep and prolonged economic crises, the demand for shows and entertainment shrinks due to the cuts in the population’s real income (Fig.4).

Fig. 4. Model III, pessimistic

Implications for the IOC:

- in the first place, minimization of the numbers of spectators attending the sports events (accompanied by reduction in ticket price, souvenir sales, etc);

- reduction of the number of participating countries (especially the least developed nations), and hence reduction of TV audience;

- there is a chance that the IOC will have to cut the Olympics program, as even the developed countries will be unable to put together complete teams.

This is probably not the complete list of issues the IOC management will face.

While considering the model, it should be taken into account that as any other major intercontinental corporation, the IOC develops in line with universal economic patterns of a cyclical nature. Under these laws, an economic cycle incorporates the following stages: expansion, crisis, depression, upturn, rise [2]; [6]; [7].

As the Olympic Movement has already been in the expansion stage for quite a long time, the IOC management has to prepare for the next stage (the crisis). This view is supported by some experts suggesting that the IOC management should transfer from the rapid growth stage to slower yet more stable development by rejecting some projects or assets.

These experts are absolutely right when they warn that such a business strategy would hardly by supported by the Olympic Movement participants, who are ‘spoilt’ by sizeable IOC budget allocations. The most important and influential of them are: SportAccord (an international organizer of multi-sports events); ANOC (Association of National Olympic Committees); GAISF (General Assembly of International Sports Federations).

A serious threat to IOC is also posed by the ‘United World Championships’ project, a centerpiece of SportAccord’s plans to arrange Olympic and non-Olympic sports championships in the same country once every four years. The first event of the kind is to take place in 2017.

The study has resulted in the following conclusions:

- the project "Sochi-2014" has surpassed all previous games regarding the scale of sports and infrastructure construction, the level of organization and staging of the competitions and made the level hard to reach;

- however, there are safety promotion; logistics; technological and other issues in the course of the preparation for the Olympics, which are the reason for maximum financial expenses (London 2012, Sochi 2014);

- owing to the high liability and intensity of the socio-economic and political processes taking place on a global scale, the Olympic movement can develop in compliance with any of the models considered by the researchers, so as new directions or interpenetration (mixing) of effects can happen within these models.

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Corresponding author: zuev_sport72@mail.ru