Regional Business News
regarding the 2010 Olympics
in British Columbia, Canada
OlyBLOG is for businesses across Canada,
especially in Vancouver / Whistler and throughout B.C. We also
hope companies in Alberta and United States (i.e. Washington, Oregon,
Idaho, Montana and California) will find OlyBLOG interesting and informative.
Auditor General Report Deciphered
It's hasta la vista time baby, and one thing is assured, if you still
think you can just hunker down and ride out 2010, or foolishly hope it
will all go away, you will get vaporized.
Tax and rent increases alone
could sink you, not to mention the challenges of increased regulations
and the general complexity of doing business in an Olympic region.
I hate to be the bearer of bad news, but if you think it was bad last
year, wait until tomorrow. Hidden costs and your frustration will only
increase with time, and if you want to make it through 2010 in good shape
you have to proactively plan to manage your involvement today, and turn
lemons into lemonade.
Throughout all this overrun cost confusion, never
ever forget sponsors like Bell, HBC, RBC, and Rona are doing just
fine. It is you who will pay for it, not them, and they will benefit economically
at your expense. The secret is in knowing how to optimally position yourself to leverage and capitalize on the energy and excitement.
For those who stayed in the loop here with me - congratulations, you hedged
your bet, and "You'll be back," which is more than some media and political
insiders are predicting about the shaky future of VANOC CEO, John Furlong.
B.C.'s tenacious "Terminator," Carol James, is on the hunt, and eager
to zap Furlong, but don't count him out quite yet. Granted, greed and
ignorance fuel his already-wavering cult-like following, but James doesn't
have enough support from the community, which she needs if she wants him
out. There is a valuable lesson to be learned from the Eagleridge fiasco
regarding what happens if you don't get the community behind you before
you make your move.
Hedging your bet is an important consideration in an Olympic region, and
as evidenced by the recent auditor general report, VANOC did not hedge
theirs. As a result they lost one hundred and fifty million taxpayer dollars
over the last few years because they did not protect money entrusted to
them from wildly fluctuating money markets. Quite literally, Furlong and
his team vaporized your money. Maybe instead of firing him, The Terminator
should lobby to have the loss come out of VANOC salaries. Fine them. Make
them accountable just like executives of other public companies.
To put a finer point on it, I'd like to know ... whatever happened to
passing along the legacy information the IOC so frequently and proudly
boasts? It's not really a surprise to anyone VANOC frittered away
$150 million tax dollars through poor financial management. We also don't
need a poll to tell us organizations like VANOC are mismanaged. It's
a foregone conclusion that has occured so regularly in other Olympic regions
it has evolved to become part of the IOC business model. Here's a
short excerpt from my book, "Leverage Olympic Momentum" to illustrate;
The IOC has a history of mismanaging money. For example, [Dick] Pound
described that when they [IOC] were given a check for $25 million as a
deposit on the $33 million from the Los Angeles television rights, they
didn't deposit it for almost three weeks and lost more than $100,000 in
interest. Stories like this give you a good idea of what you're dealing
with regarding professionalism. The IOC can afford to squander $100,000
in interest, but they go crazy when businesses in a host city try to claim
their fair share. I can think of a dozen struggling athletes or community
sports centres that could have put the $100,000 to good use. (dp41) .
. . end of excerpt
The above happened in the 80's, and as expected, Olympic organizations
have learned little, and still have no regard for taxpayers or amateur
athletes. Just imagine what our young Olympic hopefuls could do with $150
million. With that kind of money they could be a big step closer to "owning
I have a project for official Olympic reporter Jeff Lee at the Vancouver
Sun. Get out there and ask Canadian amateur athletes and their coaches
what they would do with $150 million. I'm curious. Instead of your tag
team partners at Global TV wasting time doing a poll in an effort to unfairly
influence unaware taxpayers and future volunteers, run a poll that will
actually help people understand the reality of our situation.
fix it if you don't know it's broke.
Reinforcing innocent ignorance is
irresponsible, and it harms the community. Taxpayers don't need to know
the vast uninformed population thinks it is OK for VANOC to waste
tax dollars. Uninformed people say stupid things when being polled. SMBs
need to know how the ramifications of overspending and mismanagement affect
Funny how we haven't seen Global TV run a poll asking educated business
owners what they think. (Hint: it doesn't support their parent company's
Personally, I'm pro-Olympic and I love the sporting aspect, but I know
some of you aren't as keen. The reality though is the Games
are coming, and whether you like it or not you will pay for it.
My signature question has always been;
"If you have to pay for it, shouldn't you benefit too?"
The good news is that in one respect VANOC is ahead of schedule - as in,
the 2010 dream is imploding in slow motion before your eyes a year earlier
than it traditionally occurs in other regions.
Based on information we collected regarding other Olympic regions,
I predicted this implosion would happen in late 2007. (Technically, and
just between you and me, it's the first prediction I missed. Who knew
VANOC couldn't even meet the standards of their global peers. These guys
will go to any length to make me look bad. lol)
The silver lining of this early disintegration is that small and midsize
business will have a better chance to take action to protect their livelihoods.
You will still have to scramble like a crazy person at the last minute,
but now you have more time to react than your counterparts did in other
countries. Unfortunately, you are now also under more economic pressure
than businesses in Athens, Turin or SLC. $2.5 billion and a wasted
$150 million 3.5 years out will do that to you.
I've been advising you what to look for regarding Furlong and his team
for the last couple of years, and those who paid attention are
now in a better position to help your companies stem the rising tide.
Furlong, like most managers in his position, is way over his head, and
the water is rising faster than he and his crack team of experts can bail.
It's Katrina all over.
Help is too little, and too late. Realistically
though, it's not completely Furlong's fault. The IOC business model simply
does not support an equitably, and economically sustainable Games. Unless
Furlong gets creative and emulates what happened at the Sydney 2000 Games,
2010 will never be a financial success for our host region using the outdated
IOC model. You cannot polish a turd. Well you can, but it still stinks.
Instead, it is necessary to make major changes in order to mitigate frailty
built into the system. Unfortunately, Furlong seriously struggles in this
respect, and it grows more obvious every day that Dick Pound was justified
in saying that Furlong does not posses sufficient global sophistication
to manage 2010 effectively for our community.
Here's the really bad news . . .
It is only going to get worse before it gets worse.
Yes, it will get worse as time moves towards 2010. Another domino has
fallen, and if you've read my description of an Olympic domino affect
you know this is not good, and most host regions never recover.
Plans for the 2010 Games are imploding due to mismanagement. You've witnessed
it from day one. When Furlong and his posse rode into Dodge a couple of
years ago the first thing they wanted to do was clean up the town, so
they went after small companies in an effort to hang' em high in the streets.
Unfortunately, their plan was ill conceived, and instead of resolving
issues, they made them worse. Take the Olympia restaurant on Denman for
instance. VANOC challenged co-owner Mosi Alvand to a gunfight at high
noon in the middle of the street. Mosi outdrew and winged 'em. Furlong
limped back to the ranch with non-life threatening shoulder wounds. (disclosure
- my company helped Mosi defend against the attacks, but it's too bad
"Carol The Terminator" wasn't also in his corner. Hopefully today she
Was this any way for VANOC to handle a delicate community issue? Was it
prudent to ride in with guns blazing? Apparently not, because Furlong
grossly misjudged the loyalty people in our community have for each
other. This type of loyalty is a byproduct of being a have-not province
and having to stick together to survive. Furlong is of the elite set so
he would not recognize or predict the tenacity. People quickly realized
what was happening and vowed to not let 2010 steam roll over anyone.
It was Furlong's first mini implosion and he never recovered. To this
day the issue with the Olympia restaurant and others is not resolved.
Furlong still gallops by occasionally shooting pistols in the air, while
Mosi, his partners and their families live under constant threat in a
city also reeling under a skyrocketing cost of doing business.
Spirit at its finest. It makes me embarrassed to love the sporting segment
of the spectacle as much as I do.
In one mismanaged salvo Furlong established himself as an amateur who
has no idea how to resolve issues through compromise. Instead he chose
grandiose bashing and intimidation IOC-style, which unfortunately is part
of the business model. If it wasn't they wouldn't keep doing it.
Furlong's next fiasco was to drag out the negotiations of a cooperative
agreement with local construction trade unions. It was only a couple of
months ago a deal was finally struck. If you recall, a couple of
"years" ago I cautioned that if VANOC did not resolve this issue immediately
the empire would begin to crumble. Well they didn't and it is.
2004, Olympic executives from Australia came to town to warn us about
construction timelines. They spoke to a packed house hosted by the Vancouver
Board of Trade. At the end of the presentation during question period
I asked Andrew Gilkes, Chief Executive of Australasian Access, and a key
player responsible for managing Sydney's Olympic program, how important
it was that VANOC quickly come to an agreement with the construction sector.
He emphatically stated to the large crowd, "It's critical. If you don't
do it within a few months of winning the bid you are doomed to fail."
This legacy information came from an Olympic region reputed to have
hosted the most successful Games in modern history. Unfortunately, during
this period Furlong was still hyping his "Own The Podium" mantra, and
probably not paying much attention to the reality of his responsibilities
to our community.
Furlong's next chronological catastrophe was to fumble the very first
supplier agreement VANOC negotiated. If you recall, VANOC failed
to execute an agreement with a supplier from Michigan. As a result, the
installation of new seats at the PNE Coliseum had to be halted - TWICE.
Once because the city issued a "stop work order" when they realized
not having a signed contract left our city at risk if something went wrong,
and then a second unbelievable time when VANOC failed to pay the supplier,
so the supplier stopped work. This was, I remind you, the very first contract
VANOC had entered into with a supplier. A telling tome to be sure of what
was to come. Delays like this cost taxpayers dearly.
The results unfortunately are now
staring our community in the face.
The predictions I made regarding how VANOC manages, or more appropriately
mismanages, as our auditor general concurred, are coming true faster than
I can keep track. The projection recently tabled by the AG to produce
the Games in 2010 has been redefined, and to the average person who has
not been paying attention, it looks like it escalated from $600 million,
to $2.5 billion. If you've been following this blog and have read my book
the latter number is not a surprise.
Granted, none of us could predict
exactly what the number would be, but some of us knew for a very long
time it wasn't anywhere near $600 million. Don't let silly polls
paid for by Global TV (sister company to the Vancouver Sun) or anyone
convince you overruns are not an issue.
The average person on the
street doesn't have a clue about economics or how Olympic organizations
operate, and including their opinion in the mix is a smokescreen to fool
the general populace, and small and midsize business owners.
local media know that if they expect to keep volunteers hyped up it is
critical to shield them from the truth.
The business and reporting method
the IOC uses is flawed respective of traditional standards, but unfortunately
it is exactly how the IOC and their Olympic partners play the game.
Have you noticed how cool they all are in the face of the AG's report?
None of this is a surprise to them, only to the uninformed, and unfortunately
to some local news media. However, not all media are naïve. It was only
last month BC Business magazine printed my view describing why the
current Olympic business model is outdated and why it cannot possibly
work (July 2006 issue. You can find a link to it at the end of this article.)
Your concern should not be "how" much, but "who" pays. How much is irrelevant,
because we all know our government will not allow Canada to be embarrassed,
and will spend whatever it takes to make 2010 work. It happens like
this in all Olympic regions. It's not news. Reporting it at this late
date is a smokescreen.
"Who" pays is the big issue here.
And the formula is very simple.
If costs are deemed an Olympic expense there is tremendous obligation
on the part of the Feds to pick up the tab for reasons mentioned in the
paragraph above. Regardless of his current position, not even Stephen
Harper could be stupid enough to embarrass our country on a global stage.
If it happens on his watch it is tantamount to career suicide. It won't
happen, never has, never will and you can take that to the bank. Politicians
have egos bigger than anyone, except maybe Tom Cruise.
If it is deemed an Olympic expense then all of Canada will share in the
costs. However, if it is not defined as an Olympic expense then the responsibility
is shouldered back on to the province, and horror upon horrors, also to
the suppliers contracted to build the infrastructure. P3 has a number
of complexities regarding the Olympics that engineering and construction
firms have never experienced before. Companies that supply products and
services to Olympic organizations often do not realize until it is way
too late they are on the hook when the Games are mismanaged. They
put too much faith in "perceived" reputation of Olympic organizations,
and don't execute due diligence based on history.
If you recall, in December of 2005 I lambasted "Carol Tyra Taylor Banks
Lewinski," our minister of finance, when she implied B.C. was doing
so well economically we could go it alone. I even challenged her
to give Olympic sponsorship money back to companies from central Canada,
like Bell, so the BOOMING WEST could truly go it alone. I challenged her
to put her/our money where her ruby red lips are.
B.C. was so strong, and plans were going so well B.C. could charge
forward without support from the rest of Canada, and with only Alberta
at our side. Please Carol, rise up on those six inch heels and tell us
again, considering the costs in the eyes of the public have risen
from $600 million to $2.5 billion, and in light of the information I just
shared regarding who pays for what, can you still afford to kick Canada
to the street? Can you really be that vacuous?
I have a real solution. SMBs will love it, and if Olympic organizations
and all their partners can suspend their greed for a moment, they will
grow to love it too. Actually, they can love it or leave it, because when
the community hears my solution, Olympic organizations will have no choice.
My solution is based on community involvement and ensures that our entire
community shares in the profits, and not just absorbs the costs. My solution
takes back control of the streets. My solution will ensure Bell,
RBC, HBC, Rona, Petro Canada, and the rest of the Olympic sponsors will
not be the only ones making a profit. My solution is based on the premise
the community has access to the world in a manner that grows stronger
every day. My solution has been proven by other industries. My solution
exploits a loophole in the IOC business model, the part about Vancouver/Whistler
not being able to promote the Games until 2008. (Is the IOC kidding and
stuck in the 80's? I promote 2010 every day across Canada and around the
world since 2004, and as a result I attract almost 3,000 unique views
every month to my website - 3 million hits a month! How's that for promotion?
What are you doing?)
It will come as a shock to the IOC and Olympic organizations that our
community does not need them to promote our Games. And make no mistake;
they are "OUR GAMES." The IOC is simply the licensor, and if we the community
have to pay for it, they are our Games, and we the community can take
control in a similar manner music fans took control of the recording
industry and kicked record companies to the street. We can do it the same
way Sydney did, but to a greater degree.
Our community has access to the world through the internet. In a heartbeat
we can easily reach the communities and news networks of every city in
the world, and in doing so take it upon ourselves to promote and manage
the message, and take back our community. Don't listen to Olympic organizations
when they tell you to sit back and wait, and that they are the only ones
capable of handling such a complex task.
Hogwash. They're bluffing.
make their own complexity that you don't have to be part of. If a thirteen
year old can bring the music industry to its knees, just think of what
your sophisticated, organized company can do.
You are not a sitting duck.
Quit acting like one.
If Carol Taylor still thinks we can do this on our own without help from
all of Canada and its people, she's inhaling bus fumes. It's way too late
for Furlong to tour across the country selling Olympic Spirit in places
like Saskatoon. If he were smart he would have done it two years ago before
the public's perception of costs ballooned.
At this point all that Canadians
see are federal taxes rising over something Vancouver and Whistler will
be the primary beneficiaries. Can you blame them? The model is flawed.
The only way to make this work is for the community to rally together
at a grassroots level. As you can see from the AG report, you cannot afford
to rely on anything coming from VANOC, our governments, or Olympic sponsors
like Bell, Rona, or the RBC. Write your own rules.
Ladies and gentlemen, it's only 2006, but already, you are on your own.
VANOC certainly does not have time for you while they run from "Carol
You have to fend for yourself.
The solutions we propose are proven, and effective,
plus they are simple
Talk to us before you talk to them ...
LeverageOlympicMomentum.com - the book
Have a comment?
If you have to pay for it?
Shouldn't you benefit too?
Interested in booking a speaking engagement?