2012 London Olympics

London's extreme Olympic makeover

June 1, 2012: 5:00 AM ET

It's widely expected that London will lose money from hosting the 2012 summer games. But the city's real goals are more abstract: re-branding its international image.

By Daniel Roberts, reporter


FORTUNE -- This summer will bring the most sponsored, most spent-on, most visited Olympics in human history. But the real story? A global city is set to re-brand itself.

London is expected to drop more than $40 billion dollars to host the world this August, and experts suggest the local economy will suffer a slight (about 2%) negative displacement of business as a result -- in addition to a short-term net loss for economic impact.

"There's a real divide now over whether these global cities should even host the Games -- is there truly any impact for them, the Londons, the New Yorks, the Parises?" says NYU professor Constantine Kontokosta, who recently completed a report about the effect that hosting the Olympics has on a city's housing market over the following eight years. "There's a compelling argument, to me, that these smaller, developing cities should be the ones hosting." In other words, not London.

So does the Old Smoke regret its bid? Not hardly. Sports marketing professor Bob Boland, another NYU academic, visited London last month to research the likely economic ramifications the Olympics will have. "I've never seen a country more realistic about what they're going to get from this, less in denial," he says. "They know the economic risks, but they all keep talking about the opportunity."

Indeed, London's opportunity here is to attract new companies, new residents, and change its image. The world sees London, with its mature economy and buttoned-up banking world, as a stodgy, unexciting place to live and do business. But the Olympic Games have incredible social power -- this summer more than ever, thanks to the instantaneous nature of Twitter -- and London will look to harness the hip factor.

You can already see the city preparing its appeal, in a sense; they've set up horse parades outside of Buckingham Palace and other events all over the city center meant to milk the many interstitial shots that audiences will see of London in the summertime. (And good timing: This will be the first Olympics shot entirely in HD.) "I found when I was there that they are even subtly shifting focus from the actual games themselves to the local events that show London," Boland recalls. Unfortunately, the jury won't be in on whether all of this worked for quite some time. It could take years to judge whether young professionals and big businesses, the groups that could most inject life back into London's population, have their relocation appetites whetted by Olympic broadcast beauty shots.

For more on the London Summer Games, click on the links below

The (big) bucks behind the 2012 Olympics
Wall Street gets behind the games
Henry Kissinger: Scholar, statesman, Olympic fan
Will NBC's investment pay off?
Rich Sport: U.S. Olympic swimmers float on cash
Poor Sport: When Olympic athletes have to moonlight
London locks down for the Olympics
BMW's ultimate Olympic machine
13 steps to keeping the London Olympics safe
London's extreme Olympic makeover

  • BMW's ultimate Olympic machine

    Any corporation can be an Olympic sponsor. It just takes money. BMW went one better and created a new way for athletes to train.

    By Daniel Roberts, reporter

    FORTUNE -- If you were to head down to your local BMW dealership between now and August, you'd be able to test-drive a vehicle, and if you do it on a "Drive for Team USA" day, BMW will give $10 to the U.S. Olympic Committee MORE

    May 31, 2012 5:00 AM ET
  • London locks down for the Olympics

    Security spending has already topped $1 billion to keep the Games safe.  But what happens to all those cameras when the crowds go home?

    By Andrew Rosenblum, contributor

    FORTUNE -- On July 7, 2005, one day after Londoners received word that the city would host the 2012 Olympics, terrorist bombs tore through the public transit system, killing 56 people. To prevent a repeat attack and protect the roughly 25,000 athletes, family MORE

    May 30, 2012 5:00 AM ET
  • Poor Sport: When Olympic athletes have to moonlight

    To make ends meet, team members from some of the Games' less popular sports have to take on an extra job or two.

    By Caitlin Keating, reporter

    FORTUNE -- The U.S government is one of only a few countries that do not give money to Olympians. Glenn Merry, the CEO of the U.S. Rowing Association said that every team within the United States is funded differently, with only 30% to 35% MORE

    May 29, 2012 5:01 AM ET
  • Rich Sport: U.S. Olympic swimmers float on cash

    America's mermen and women have some of the best support in the country, but even the breakout stars must diversify to keep their heads above water.

    By Alex Konrad, reporter

    FORTUNE -- Americans love to swim: 93 million people do so and spend $1.4 billion on suits every year. For professional swimmers, this means both lucrative sponsorship and a deep-pocketed support organization -- USA Swimming raises about $100 million a year, MORE

    May 29, 2012 5:00 AM ET
  • Will NBC's Olympic investment pay off?

    The Peacock stands to lose money on the big games, but small victories will help ease the pain.

    By Daniel Roberts, reporter

    FORTUNE -- Last June NBC spent a reported $4.38 billion to secure Olympic broadcast rights through 2020. That's a hefty windfall for the IOC, which gets nearly half its revenue from fees broadcasters are willing to pay (see chart above). Of NBC's big expenditure, $775 million will go toward MORE

    May 25, 2012 5:00 AM ET
  • Wall Street gets behind the Olympic games

    High-profile financiers are stepping in to support future Olympians.

    By Katie Benner, writer

    FORTUNE -- The U.S. Olympic Committee needed a better way to raise money. Until recently, direct mail -- the USOC's primary source of private donations -- yields on average a $20 gift from those who donated. "We were raising less in private contributions than the Cheyenne Mountain Zoo in Colorado Springs," says Patrick Sandusky, a spokesman for the MORE

    May 24, 2012 5:00 AM ET
  • The (very big) bucks behind the Olympics

    Countries almost always overspend to play host.  Roll over each city on the medal below for more on how much they've shelled out.

    By Alex Konrad; Infographic Nicolas Rapp

    FORTUNE -- Even before the athletes could be paid professionals who might make millions bringing home a medal, the Olympics were about money. The first modern Games, held in Athens in 1896, where nearly canceled when funds fell short -- Greek businessman MORE

    May 24, 2012 5:00 AM ET
  • Henry Kissinger: Scholar, statesman, Olympic fan

    The former secretary of state and Olympic booster on why the Games are good diplomacy

    By Katie Benner, writer

    FORTUNE -- In 1936, Adolf Hitler watched with dismay as African-American track star Jesse Owens won four gold medals, dominated the Summer Olympics in Berlin, and undermined the Fuhrer's edict that the Aryan race was the supreme race. Henry Kissinger, at the time a 13-year-old boy living in Bavaria, was enthralled by MORE

    May 24, 2012 5:00 AM ET
Search This Column
View all entries from this: Week, Month
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.