Tags:
Journalism of Courage
Olympic Games today are marathon miles away from the pure celebration of bodily excellence they used to be in ancient times. The urge to make profits may not have completely overpowered the urge to excel through the body, but the Beijing Games are no doubt played out today against a clear commercial backdrop.
Multinational companies are using the Games to prise open the vast but hermetic Chinese market even as China is exploiting the chance to look more marketable to the world. Who will win how many golds is a question that has not lost its urgency over the ages; but there are new questions being asked: Which company will win the 8216;marketing gold8217;? Will China be able to sustain the vigorous demand-and-supply situation after the Games? Will the Games boost asset prices? Will the bourses too play along? Here8217;s a snapshot of the commerce and economy of the Games:
866 million
The money paid by top 12 sponsors 8212; around one-third more than on Athens
Money paid by some of the top sponsors
Volkswagen AG 100 million
Adidas AG 80 million
Coca-cola 70 million
6 billion
The projected cost of Olympic-related advertising in China this year, up from 4 billion last year
The most expensive EVER
Beijing8217;s Olympics will be far and away the most expensive ever. Unlike previous hosts that dug themselves deep holes of debt, from Montreal in 1976 to Athens four years ago, China8217;s capital can easily afford new stadiums, subways and roads. Yet the strong demand and supply situation may not be easy to sustain:
34 billion
Chinese government8217;s estimate of total spending on the games
40 billion
Total spending after factoring in losses from factory closures and unexpected costs
15 billion
Total spending on Athens Olympic Games by Greece in 2004
WILL THE bourses PLAY?
Many investors who believed the Beijing Olympics would drive the Shanghai stock index to peaks to rival the Himalayas might lose their shirts. Yet, those who believe the index might dive as low as 2,008 after the Games, might miss a big rebound:
45 per cent
The fall in Shanghai stock index in 2008. Because the Chinese index is among the worst-performing in the world this year, it might go only one way 8212; the way up
Game spoilers
There are many problems that spoil China8217;s Olympic mood: dampening sales prospects for companies that have wished to make a killing out of the Games; beer makers have problems driving trucks into Beijing given heightened security; work at construction sites has been halted because authorities sent many migrant workers home; and Beijing hotels are lowering their rates as new travel restrictions have led to less demand
Asset booster
History has shown that Olympics can boost asset prices:
56 per cent
The surge in stocks of host countries in the four years leading up to the games in the past nine Olympics
13 per cent
The surge in property prices in the same context
GDP buster?
According to an analysis by HSBC of every Summer Olympic games since the end of World War II, the GDP growth of most of the Olympic host nations had dropped below global averages
