The London 2012 Olympics is only a few days old but already a post-mortem has begun.
That might sound like an unnecessarily morbid term to use when we’re in the midst of something so vibrant and exciting but it would appear - based on reports emanating from various news outlets this week - that while the Olympics is proving to be very engaging in a sporting sense, all is not rosy when it comes to commerce. And people are already starting to sift through the evidence to find out why.
“The Olympics have turned London into a "ghost town,” says Sky News, reporting that businesses are seeing their profits hit as tourists focus on the Games rather than them.
The FT adds that many central London businesses have seen “little of an economic turbocharge from the games, as traditional London visitors stay away.”
If you’re wondering why there’s a fuss it’s mainly because one of the justifications for spending £9bn (or possibly as much as £17bn depending on which reports you read) on London 2012 was the economic boom that it would prompt.
Before the torch was lit, a report published by Lloyds Banking Group suggested that the Olympics would provide a £16.5bn boost to the UK economy and create 60,000 jobs.
It still might. But, right now, not everyone is benefitting, particularly taxi drivers, hoteliers, theatre owners and shopkeepers, some of whom have seen their bread-and-butter summer trade all-but wiped out.
Suggestions are that a proportion of Londoners have fled the capital altogether while others have decided to work from home or are simply on holiday. At the same time, a good number of tourists that would ordinarily visit London during July and August (including those from other parts of the British Isles) have simply avoided the capital altogether, possibly scared off by the prices of hotels or even the scare mongering about the impact the Olympics would have on London’s already overcrowded transport system.
At the same time, wall-to-wall TV coverage is encouraging sports fans without tickets to stay indoors.
All told, it would appear, in the short term, the Olympics is having the opposite impact on commerce to the one that was originally promised.
Perhaps we shouldn’t be surprised though. According to city analysts, this is commonplace.
Data from Olympics Games held between 1964 and 2008 shows that although growth tends to rise in the run-up, the impact starts to fall away even before the Games begin – and afterwards, growth tends to be weaker.
According to The Guardian the trend is explained by the fact that “many of the positives that come from the Olympics (such as jobs created during the construction phase) are out of the way long before the opening ceremony, while negatives (such as lost productivity as Britons stay glued to their TVs) come during and after the Games. The anticipation of extra revenue from foreign visitors, economists say, also fails to take into account visitors who might have come to the UK anyway and just change the timing of their visit.”
And what of the rest of the country? Well, up here in the North there’s a lot less of the Olympic buzz than there is in London. Plus no one really expected a bonus with pre-games research showing that only 16% of businesses in the North of England and 19% in the Midlands expected a positive impact from the Games while 30% had high hopes in the South.
If this all seems excessively gloomy in what is turning out to be an excellent week of sport, please don’t despair. There are two sides to every story.
Robert Boland, a professor of sports business at New York University, is quoted in various places as saying that: “the London Olympics are generating an estimated $7bn US in sponsorships, broadcast rights, ticket sales and other business. That does not include the indirect economic value- such as raising the international appeal of the city as a tourist destination - tied to the games, which are expected to be viewed by four billion people.”
There’s more. Prior to the games British companies are reputed to have been able to access almost £6bn worth of contracts via the Olympic Delivery Authority. Which sounds pretty impressive. Plus an area of London that was greatly in need of regeneration has been completely transformed.
And then there are the less-tangible benefits such as the positive impact that the games might have on the nation’s morale: according to a recent poll 71% of us believe the Olympics will have a positive effect.
So which is correct? Well, both are (of course) because life isn’t black and white. It’s various shades of grey.
Fortunately, if we look closer to home, television, it would appear, is having a great time of it.
Viewing figures are healthy for one. More than 27m people watched the opening ceremony while records are tumbling elsewhere, like on BBC3 for example where the channel achieved its second highest audience ever, 4.2m viewers, thanks to Team GB’s surprise bronze medal in the men’s team artistic gymnastics.
Viewing figures may not translate directly into a financial benefit but the Olympics have certainly had a positive impact on the TV industry’s coffers too.
Britain’s highly talented freelance production and technical crew have been in high demand, as they usually are, but particularly those with specialist OB skills such as EVS operators or VTR managers.
For proof, just ask The Crewing Company.
Its managing director Stuart Hatton says that between his firm and its sister company Alias Hire they’ve pulled in at least £250,000 from broadcasters covering the Olympic and Paralympic games, supplying crew and kit for both events with big names such as ABC TV Sports and Events on their roster.
It’s a micro-example but one that shouldn’t be ignored during the current Olympics post-mortem.
While some industries have so far – anecdotally at least - been sold a pup, at least television is not one of them. For that we should be grateful.
Will Strauss is a Leeds-based freelance journalist and a regular contributor to various TV industry publications including Broadcast.