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Today's Features:


Originally published August 22, 2005

THE OLYMPIC BU$INE$$ OF TERRORI$M & $ECURITY

LOCAL MEDIA STACKING THE DECK

MONTREAL WANTS TO HOST ANOTHER OLYMPICS -- LOL

SPORT vs BUSINESS - IS THIS A CHEESE SHOP?

BODDY EXPOSES BELLY

TAXPAYERS SUBSIDIZE VANOC DIGS

OLYMPIC HALL OF FAME MANAGER, TOM WEST


THE OLYMPIC BU$INE$$ OF TERRORI$M & $ECURITY
All articles written by: Maurice Cardinal

Security in an Olympic region is one of the top four moneymakers, and the more you know about what happens behind the scenes the better you'll be able to figure out how to position yourself to capitalize on it.

The Georgia Straight published a feature on Olympic terrorism in their August 11-18 issue written by Charlie Smith. It paints a realistic picture of what really happens in an Olympic region. Most other newspapers whitewash issues and patronize their readers by leaning heavily towards the story Olympic organizations want you to hear.

Smith covered a wide range of topics including bombings, Al-Qaada, police forces, the military, budgets and what local residents and out-of-town spectators will have to deal with and often suffer through in the lead up to and during the Games.

The article was well researched and if you haven't seen it make sure you do. In the next issue of OlyBLOG Update I'm going to cover an aspect of Olympic terrorism and protest Smith never broached - the lucrative business side of security. Relationships between the military, police forces and private security forces are always contentious, which translates into opportunity for entrepreneurs smart enough to foresee trouble in the ranks. Plus, hardware to keep the troops equipped unearths another goldmine for a variety of suppliers.

Click here to read Charlie Smith's article
in the Georgia Straight . . .



LOCAL MEDIA STACKING THE DECK

I also want to give you a heads up regarding a story recently published in the Vancouver Sun. It's important for small and midsize business owners and operators to understand how articles are positioned in a newspaper and also when and why they are published. News is influenced by business decisions in direct relation to a newspaper's revenue.

Many journalists in Vancouver produce brilliant work, but they don't have control over when a story will run or where it will be placed in the layout. That's left up to editors and publishers. Most readers don't realize that how a 'series' of stories is presented over time is directly related to how information is interpreted and accepted by the public. There is well-scripted psychology behind manipulating the masses. George W. used it to convince America that first there was a need and that he had the solution. It's like telling a child there is a boogeyman under the bed and then playing the savior when they wake up screaming. Responsible journalism means reporting the facts in a balanced manner in order for the public to arrive at accurate conclusions. Sensationalism has become acceptable, but manipulating the outcome is reprehensible.

On August 10, 2005 the Sun ran a story about B.C.'s Premier Gordon Campbell going to bat for First Nations people. Apparently he is leading a cavalry charge in their defense. Unfortunately, we only heard half the story. Campbell emphatically stated he's tired of how natives of Canada have been treated for the last 138 years. What the Sun didn't mention was that a parallel scenario played out in Sydney Australia a few years before the 2000 Summer Games, and it had dire and historic consequences for Olympic organizations. On page 4 of the continuation of the Sun story they ran a large headline that said, "Aboriginal leaders skeptical on follow-through." Quelle suprise -- that's what happens when you know you're being played. Australian Aborigines leveraged Olympic momentum and came out ahead when the Australian government tried to use Aboriginals to leverage the 2000 Games. It literally backfired on Olympic organizations.

Campbell has no choice but to make a play to get First Nations peoples' attention and cultivate influence. He needs to position them so they have little wiggle room. It's a common corporate tactic to promise the moon and then tie up negotiations in long-term discovery and planning, and then stall, stall, stall until the critical period has passed. The critical period in this case being Closing Ceremonies of 2010.

Aborigines in Australia complained immediately when Olympic organizations used symbols like boomerangs, didgeridoos and their distinctive colorful pointillist artwork to promote the Games. They complained because Olympic organizations and the government refused to acknowledge the modern-day contributions Aborigines made to the country. The government portrayed them only as primitive people, much like VANOC has done so far regarding Ilanaaq the Inukshuk and the Inuit peoples. Olympic organizations and the Australian government refused to acknowledge that white people oppressed Aborigines for 200 years and as the Sun recently characterized, eventually turned them into gas-sniffing drug addicts and alcoholics. You will happy to know that they are doing much better today regardless of what you read in the Sun. It's still not great, but better than pre-2000 Olympics.

The Vancouver Sun never mentioned that millions and millions of Australians revolted against the government and Olympic organizations, and demanded that the government publicly say they were "sorry" for the atrocities, and that Olympic organizations include Aborigines in a more respectful and significant manner. Both groups declined to make amends. The public outrage across Australia was so great that the government feared violent revolt and called upon leaders like Nelson Mandella, Desmond Tutu and The Hurricane to quell the masses.

Aussie Aborigines built a campaign over a three-year period leading up to the Games to expose the facts to the world. Local Olympic-sponsored media would not at first support them, but thanks to the internet and "unaccredited media" around the globe they got the word out and literally brought the government and Olympic leaders to their knees.

The Sun story about Premier Campbell launching a campaign to save Indians in Canada was published on August 10, and interestingly a few days later on August 13 they ran a story about gas-sniffing Aborigines near Ayers Rock in central Australia. I have no idea at the time of writing of this newsletter what the connection is, but the Sun is setting readers up for something that could play out over many weeks ** see below.

OK, I know, that's pretty weak, and you're probably saying, that's all you have? Well, no, consider also that 250,000 white people in Sydney walked across a bridge en mass in Sydney to say "sorry" to Aborigines waiting on the other side, and that throughout the entire run of the 2000 Games residents and spectators said "sorry" every time they came upon an Aborigine, and that they wore white placards with "sorry" on them and passed out "sorry" postcards by the hundreds of thousands, and that the rock band Midnight Oil plastered "sorry" all over their clothes when they performed a protest song during the Olympic Closing Ceremonies.

It was my lead story in the last issue of OlyBLOG.com, and coincidentally Premier Campbell a month later made an announcement to get First Nations peoples in Canada on the agenda. It's nice to know they are listening to me (LOL), but it would be even nicer if they could be more upfront regarding their strategy. Actually, I'm kidding about Premier Campbell reacting to my little newsletter. What really happened was that I knew something was up in the Aboriginal department based on what other Olympic regions have done in the past. It was a no-brainer. It'll be interesting to see how it plays out. Keep your eyes open and stay tuned.

** No sooner had I uploaded this issue to OlyBLOG.com and the Sun lived up to my prediction. This issue was published on August 18, and the very next day there was a Native issues story on the front page of the Sun accompanied by a large full color photo. A Sun reporter and photographer rode with two Fisheries officers on the Fraser River to capture a "staged" confrontation of illegal fishing by the Cheam Band.

The Sun spent the last week building native issues interest and this morning cranked it up a notch. It at first looks like spontaneous news, but on closer inspection you'll see they were hunting for a specific story. They baited a young buck, and then built it into a twelve point trophy kill. If First Nations people are smart they will learn not to be lured in so easily to a media trap that makes them look bad.

The way the Sun presented story about the Cheam Band fishing on the Fraser is inflammatory and it hurts everyone in B.C. when you consider we are in Olympic ramp up mode. It doesn't help VANOC and the government convince the world that we manage Native treaty responsibly. The Sun did a good job of creating a false impression that makes us all look stupid.

An armed Fisheries officer standing in a boat and pointing at a masked Cheam native sends the wrong message. The Sun also used a misleading headline to pour fuel on the fire and blow the story out of proportion. A large headline on the second page of the story reads, "Masked men confront officers." In reality one young man wrapped his t-shirt around his face when he noticed that a Sun photographer aboard the Fisheries boat was taking his picture. He and his partner immediately moved away when the officer instructed him not to interfere with an investigation of another pair of Cheam natives fishing illegally in the Fraser. If you read the story it is apparent that the young man kept a reasonable distance and posed no threat to the officers. However when you look at the front page photo and read the headline it portrays a different situation. The front page photo was inserted out of context and used only to sell newspapers.

Get a copy of the story online at VancouverSun.com, compare it to the comments and predictions I made earlier in this article and read between the lines. When you do you'll see how inflammatory the perspective is and it that does little to inform and enlighten us of the real challenges facing Fisheries and First Nations people.

*** Follow up to my follow up . . . The next day, August 20, the Sun ran an article about the first group of Cheam natives being charged who allegedly swarmed the Fisheries boat on August 8. Guess where it ran? Surprise surprise, on the second-last page of the regional WestCoast news section -- exactly where all the stories about this non event should have been in the first place.

Click here for more info regarding Aussie Aboriginals and how they managed Olympic organizations -check out the free sample too!




MONTREAL WANTS TO HOST ANOTHER OLYMPICS -- LOL

Montreal Mayor Gerald Tremblay beat a hasty retreat and ate his words over the prospect of bidding for the Olympics in 2016.

Montreal holds the dubious distinction of being one of the LEAST successful Olympic cities of all time, while Calgary has the distinction of being one of the greatest Olympic successes in North America. It's a good example of what happens when you do it right. 29 years later Montreal is still paying for Olympic overruns. The 1976 games resulted in an accumulated 2.6 billion dollar debt, which won't be paid off until next year. Residents ate Tremblay alive when he recently suggested that Montreal consider another Olympic Bid. He backpedaled immediately.

IOC member Dick Pound thinks it would be easy for Montreal to host another Games because the "infrastructure" is already in place. Pound fails to mention that Montreal's airport is decrepit and that the roads and public transport in the region are just as bad. Pound knows too that rebuilding current facilities to host Olympic events is incredibly costly. Local Olympic organizations pay for only sport-related costs to get the facility up to Olympic speed, and they often pass costs on for non-sport requirements like bathrooms, concessions and parking to the taxpayer, which in many instances can cost more than it takes to prepare the sport areas. It's a smooth move that tricks taxpayers every time.

Here are a few recent responses
by Montreal residents: August 2005

S. Smith: I've been paying for the last olympics my whole life and never got a chance to see them.

S.L.: Forget it, the taxpayers are going to pay for it all eventually.

S. Campeau: We've done the Olympics and were left with evidence of how poorly it was managed . . .

John Q. Taxpayer: Statistics prove that they are never profitable for the citizens of the host city. No thank-you, forget it . . .

Moh Danga: Let Kodak, Coke, Microsoft, Sony supply the funds, not the overburdened Canadian taxpayer. Just wait, we'll be seeing the deficits start racking up for Whistler.

Edward Katz: I'm bracing myself for the cost overruns that are guaranteed to accompany the 2010 Vancouver Games where the estimated price of security alone is in the vicinity of $600 million.



SPORT vs BUSINESS - IS THIS A CHEESE SHOP?

I'm sorry to harp on again about the Sun, but on August 13, 2005 on the back page of the sports section, which has been devoted to Olympic news for quite a while, they ran a story about the Olympic tragedy that is Athens.

For the last ten months I've published stories about the financial and economic devastation Athens has suffered as a result of their mismanagement of the 2004 Summer Games. I reported recently that the deficit was approximately $10 billion, but according to recent numbers in the Vancouver Sun I stand corrected. The deficit apparently is now $12 billion. The total bill to produce the Games was $19.3 billion. Not only is Athens stumbling under even greater debt than I thought, but the increase in tourism they expected has not materialized, plus as I reported earlier, Greece's deficit last year was pushed to 6.1% of the GPD, which is more than double the limit set by the European Union.

My question to the Sun is, considering Vancouver/Whistler is an Olympic region why is this news buried on the back page of the sports section? Why isn't it in BIG headlines on the front page of the Business section, or better still featured on the FRONT PAGE of the newspaper?

Also, your Monty Pythonesque headline, "A year later Athens is 'uncomfortably still'" is the understatement of the decade. Still?

The Norwegian Blue has passed on. It's pining for the fjords.

The bird is dead!!

Olympic news in Vancouver/Whistler is "business news," not sports news. It's extremely important that everyone in the region has a clear picture of everything that transpires on the Olympic front. We need a realistic picture and not just the view from Mount Olympus. Considering that the Sun's mandate as described in its masthead states," . . . we strive to inform, enlighten and entertain our readers so as to improve the quality of their lives," how can you justify placing information on the back page of the sports section that is so timely and relevant to improving the quality of our lives? Your coverage could be considered entertaining in a "Dead Parrot sketch" kind of way, but it's not enlightening.

The Sun has no problem running headlines on the front page that scream how house prices are skyrocketing (under the guise of it being a good thing), but when it comes to sharing information with small and midsize businesses that we can actually use it's buried on the back page of sports. What gives? It's impossible to make informed decisions if you only have half the facts.

On August 12, 2005 the Sun ran the following headline in the Business section, "No sign of housing market bubble" and in a smaller font below it said, "But bank report says Vancouver is most vulnerable to a correction." The Sun is getting better in this regard because usually they don't run the disclaimer until the second last paragraph in the article.

They ran another headline on August 18 on the front page of the business section that read "B.C. real estate heads for record" and in the continuation of the article on page 8 a second headline of "No bubble in sight yet, but warning signs are out there."

OK, here's how it works. When you put a pot of cold water on the stove and crank the heat to high the water sits perfectly still for ten minutes or so. But as soon as you see the first little bubble, or correction, get ready because in just a few seconds that tiny correction will all of a sudden burst into a rolling boil. I don't buy for a second that the recent increase in real estate prices isn't primarily a result of Olympic frenzy because other than low mortgage rates, nothing of great consequence has happened on the political front here to support the confidence of house buyers, except of course for winning the Bid. Tourism is barely holding its own and the last time I looked I haven't seen even one new multinational corporation setting up shop here. Plus, our downtown core is filled with condos and devoid of commercial enterprise. LEAKY condos and high rises abound so it's not as if we have a stellar reputation for building quality structures. Low unemployment is a result of the construction frenzy. Why all of a sudden is this the place to be if not for the Olympics?

Bubble or correction - it boils down to semantics and level of degree.

The Sun says tomato, I say old chap, "if this is a cheese shop, shouldn't you be selling cheese?



BODDY EXPOSES BELLY

On August 10, 2005 the Sun published an article researched and written by Trevor Boddy regarding the serious lack of commercial property and planned development in downtown Vancouver. This time I have to commend the Sun. It's well written and an exhaustive piece that frankly offers an illuminating view of Vancouver's soft belly. His article entitled, "DOWNTOWN A FOOL'S PARADISE" couldn't be more accurate.

I wish though that Boddy had made reference to the Olympic equation. His perspective would be interesting. Everything that happens here for the next five years has an Olympic connection. In three years everyone will appreciate more clearly how much of an impact the Games will have on the province and Canada. Unfortunately for many it will be too late. Boddy's article is important because it details how businesses are being forced to make up the tax shortfall as a result of the ratio between residential and commercial property being "skewed out of whack" -- that's my phrase. His explanation is much more eloquent and detailed.

The problem as we all know and as Boddy explains clearly is that there are too many condos in the downtown core. What most people don't realize is that residential taxes are calculated at rates substantially lower than commercial taxes, which means businesses in the downtown core have to pay more to cover the loss. 98% of the companies in B.C. are small and midsize. SMBs cannot afford to subsidize condos.

One of the important reasons to bring the Olympics to B.C. is to encourage capital investment from outside the province. Corporations will not relocate or start a new enterprise here if they know they have to subsidize shortsighted political planning. There is little incentive for companies to locate here when you also consider that commercial property values are astronomical. The ocean and mountains aren't much of a draw for shareholders who live in Chicago or Toronto.

We should be playing-down artificially inflated real estate prices instead of boasting about it like it is a good thing. The challenge however is that real estate and development industries propagate the hype so they can make greater profits in partnership with media who are salivating to sell them advertising. They collude to literally sell you out. Have you ever considered how much revenue newspapers generate through their real estate and Home sections? One hand washes the other and it will continue this way for a long time. SMBs can't stop or even control it, but you can do something to counteract the impact on your business by learning to leverage Olympic momentum.

If the condo trend continues more people will commute to work between the suburbs than they do in and out of downtown Vancouver. Yikes! As Boddy and others have suggested, Vancouver could literally become a retirement resort town. Shades of Sun City Arizona. Hopefully though it will resemble one of those Palms, like Palm Beach or Palm Springs.

Boddy's article covers a number of other important issues like commuter traffic patterns, and how politicians are well on their way in turning Vancouver into a resort and convention playground instead of a vital business community.

Interestingly, the next day the Sun published an article by Robin Williams in the SOUNDOFF section about SMBs being taxed to death. It described how one building's taxes jumped from $64,491 to $97,518. As you might have guessed the 50% increase is simply passed on to tenants. And as you know, SMBs can't carry it so they leave or dissolve.

The numbers aren't much of a surprise to many of you because you've either experienced it or read about it in my newsletters and on OlyBLOG.com over the last year, but again the Sun fails to mention that astronomical tax increases happen in all Olympic regions, and we are no exception. We will suffer the same hardships unless we manage it properly. If you have to pay for it shouldn't you benefit?



TAXPAYERS SUBSIDIZE VANOC DIGS

I don't want the Sun to get a complex and think I'm only picking on them, so here's a little observation that SMBs who pay taxes in Vancouver will find interesting.

In the August 16-22, 2005 issue of Business in Vancouver (the Real Estate Section) Andrew Petrozzi filled us in on VANOC leasing two buildings for their offices between Boundary and Highway One. According to the article VANOC got quite the deal.

Unfortunately, what he doesn't make clear is that it's at taxpayers' expense. Petrozzi tells us that two buildings were leased by VANOC from the City of Vancouver. The lease officially starts in January of 2006, but they get possession in September in order to prepare the space. I wouldn't raise an eyebrow if anyone but the city owned these buildings, but considering that taxpayers actually own the property I'm thinking, WOW! That's pretty generous. Four months free rent on our tab.

Yeah, it's common for landlords to make deals that allow tenants in early, but not four months early in a city lacking office space. (Remember all those commercial buildings converted to condos?) VANOC has been looking futilely for a long time. 230,000 square feet is hard to find.

You might be wondering, why quibble over a few months free rent when it concerns the Olympics? Well for starters, that's exactly what Athens thought, and almost every Olympic city that went before them thought too. Everyone in the early stages is so wrapped up in how good they mistakenly think the Games will be that they tend to let things slide.

Not only are taxpayers footing the bill for four months rent, the land, which is valued at between $11-16 per square foot has been leased to VANOC for $5 a square foot. Guess who will absorb the difference? You got it -- municipal taxpayers. Another generous offer by the city on your behalf. Rob Peter to pay Paul. Are you still with me? There's more to this than what Mr. Petrozzi probably knows or is sharing.

One of the most common complaints of absolutely all taxpayers in Olympic regions is how adept Olympic organizations are at hiding or deferring costs. They brag about the benefits of the Games, but never reveal what it actually costs -- much like a gambler. You always hear what they won, but never what they lost. Well, unless I'm missing something here, this is either a brazen picket-pocket boost or it's the sloppiest attempt at hiding costs I've ever seen. It's like John Furlong, CEO VANOC, walking up to us and saying, "OK, I'm going to slowly reach into your pocket and remove hundreds of thousands of dollars from you over the next five years and I want you to be cool with it. OK? Let's pretend that the property is actually owned by private enterprise and they cut me a sweet deal. OK? Pretend there are no strings attached. OK? Don't flail around and don't make any noise. OK? I am now reaching into your pocket. OK?"

Mr. Petrozzi, you report it like it is a good thing. Your headline was, "VANOC finally finds a home" and you closed the opening paragraph with, "thanks to a helping hand from Vancouver City."

I won't have a problem with it as long as the difference in what we (the city) could have rented the space for is included as a cost for hosting the Games. VANOC and the city also have to guarantee that taxpayers won't get stuck with any extraneous legal fees or costs associated with said properties. Are ya still with me? Cause it gets better.

The property was purchased from Kingswood properties Ltd. for what was described by Bruce Maitland who is Vancouver's director of real estate, as a "very, very fair price." Apparently Kingswood knew that VANOC had their sights on it so out of the goodness of their hearts in true Olympic spirit they made a very, very fair deal. This is the part where you have to count your fingers after the handshake, and I'm sorry to keep doing this to you, but it gets even better.

According to Petrozzi's article, when you read all the way through to the third last paragraph of his article you'll discover that the property, quote -- "had been on the market for some time and had been mired in various legal problems including lawsuits from neighboring businesses for complications arising from land sinkage (sic) related to water being pumped out of surrounding ground after it leaked into the building's five-storey underground parkade" -- unquote. Come again? Did you say the building leaks and that in order to fix the leak you have to cause buildings in the immediate vicinity to sink?

Apparently we stole this 230,000 square foot "leaky" palace (in total) for a measly $24 million.

OK, I lied about not picking on the Sun. They published a similar story on July 29, but interestingly Jennifer Miller failed to report any of the purchase details or cost. Or maybe she did and her boss axed it -- we will never know. Renee Smith-Valade of VANOC did assure us in the Sun article though that the building is very solid, and it has a cafeteria, fitness centre and large atrium. Thank goodness for that stuff.

I know that what I'm writing here is barely holding your attention. In fact many of you might have skipped to this paragraph, but I will guarantee that in June of 2010 when the invoice for the Games rolls in you're going to be incredibly interested in what is defined as a legitimate or a hidden cost. It will mean all the difference when it comes to deciding how the federal, provincial or municipal governments will divvy up the overrun. Considering the billions of dollars in promotion that sponsors will leverage out of the Games maybe you're thinking Bell, HBC, RBC, Rona or one of the others will kick in a little extra to cover lost rental revenue. Don't count on it.



ADVICE FROM CALGARY'S EX-OLYMPIC
HALL OF FAME MANAGER, TOM WEST

Tom West came to Calgary in 1987 to help build the Olympic Hall of Fame, and was responsible for everything to do with it once the building was complete. He was also part of the management team at CODA (Calgary Olympic Development Association).

The museum received 80,000 visitors in 1998, ten years after the Games! Tom takes pride in having helped develop an incredible legacy. They amassed almost 7,500 pieces of Olympic heritage material.

I asked Tom last week what he thought would be good advice for Vancouver regarding 2010 and he wrote back, " . . .don't waste a lot of time fighting the trademarks around the games. Get onside and work with the VANOC and COC people. If a retailer wants to carry the items with the rings on it, pay the royalties. The price points will be covered by the high demand for the real thing when the Games roll around. Besides, those monies go to support Canadian athletes.

Think beyond 2010 - what's your business going to be like then? Will your company develop special expertise and knowledge that will be marketable to other host cities?

One of the best phrases I ever heard concerning the Olympics came from Park City in 2002. "The Olympic Games are like having the world's largest horse gallop through your town and as it does everyone tries to throw a saddle on it."

Learn the rules for licensed products, work within them and build a solid long term reputation for being someone people want to work with rather than someone seeking short term, fast bucks who has to be policed all the time.

I also asked Tom about the successes of SMBs in Calgary and he said, "There were a number of Calgary companies that were able to use the expertise built up for the 1988 Games long after the post Games period in a variety of ways. Flagworks is a good example - they wound up doing all of the pageantry for the Salt Lake City Games. Expect to see them in Vancouver."

Tom is currently the President and CEO of the US National Ski Hall of Fame and Museum in Ishpeming, Michigan.

Thanks for the good advice Tom - Good Luck in Michigan.

We invested over three years and a six-figure budget researching Olympic organization relationships with sponsors, contractors, suppliers, partners, etc. The results surprised us too ... mouseover below





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