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2010 Olympics Business News for the Vancouver and Whistler regions of British Columbia. Plus, Alberta, the rest of Canada, Washington State, Oregon, Idaho, Montana & California

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2010 Olympics Official Score:

Patriotism 10 - VANOC 1 - Taxpayers $6 Billion+

Published March 2, 2010

Is patriotism really worth $6 Billion+?

Apparently so ... at least until the shine wears off.

The 2010 Vancouver Olympics is over. Next step is to pay the tab.

Vancouver certainly had fun, and Canadians certainly feel more connected, but is hosting an expensive Olympics really the most efficient way to get people to feel good about their city and ultimately themselves?

It is if youíre a lazy or ineffective politician.

Truth is, the big blip is exciting, but history proves itís not cost effective.

Remember how depressed you felt during the first week of the 2010 Games when Canada wasnít so popular on the podium, and all you could see was embarrassment and exorbitant Olympics costs? You might have even started to side a bit with anti-Olympics protestors until they turned violent and smashed windows at The Bay. Dummies.

I bet too your excitment plummeted when Georgian luger, Nodar Kumaritashvili was killed on the first day of qualifications on a sliding track. To make the situation even worse, athletes alleged the track was poorly designed, and then in a backhanded insult to his death, VANOC CEO, John Furlong angered the world further by claiming it was Nodar's fault even though the next day VANOC made major repairs on the track. David Letterman and others called bullshit and accused Canada of a cover up.

Canada was also light on medals in the first week of competition.

Own The Podium was in jeopardy. International press poked fun at Canada for being so uncharacteristically arrogant. Brits called 2010 the Glitch Games. Americans offered to ďrent the podiumĒ to us.

Canadian pride and your excitement took a dive, and unfortunately it will drop again when Olympics costs start rolling in.

Admit it, even right from the start, during Opening Ceremonies when the fourth leg of the cauldron needed a little blue pill to rise to the occasion you were ready to hang all the politicians and executives connected with 2010. Fortunately, by the second week our medal count went up, and that $6 billion+ investment in your kid's future didnít seem so bad.

And then ... Canada won Hockey GOLD against our arch rivals, the USA!

It was time to party in the streets and forget about the cost. We could deal with the expense tomorrow, much like you deal with your VISA bill at 28% compounded interest. You try to pay it off, but can't get ahead.

Well, itís tomorrow, and already only two days after the Olympics are over BC Premier Gordon Campbell is delivering bad news about how debt ridden our province is, and the cuts we will all have to make.

For anyone thinking rationally, the Olympic return on investment (ROI) has to be long term in order to justify the expense, and unfortunately we wonít know whether the Olympics worked for Vancouver and Canada for about five years, because historically, it usually takes that long or longer for all the benefits and hidden expenses to percolate to the surface.

Since winning the Olympic bid in 2003 there's been a lot of very powerful people hiding a lot of big fat 2010 party costs, and because mainstream news media, your local newspapers, are Olympic partners, there really isnít anyone out there looking very hard to uncover the truth. Hopefully the CBC will stay on the job, but even they are cashed strapped.

At past Games the true cost of hosting Olympic events for local taxpayers is always kept under wraps for many years, sometimes indefinitely. It took almost five years to learn the Salt Lake City deficit of $400,000 was actually $1.2 billion, and guess who first reported it nationally - not Salt Lake City politicians. It was CBC. When this number finally came out it put a huge crimp in the ROI. Overnight the Games were deemed not worthy of the expense in either increased tourism or foreign capital investment.

However, this time around, in 2010, there are a number of social media types taking a closer look and sharing their findings even before the last athlete has left town. Some of us have been doing it even before we won our first medal. Consequently, itís possible we could see deficit reports in a reasonable amount of time, or at least quicker than previous Games.

Gold medals are great, but you canít eat them and they wonít pay your mortgage or rent. Nothing will bring a young patriot back to reality faster than having to pick up the tab at a fancy restaurant.

John Furlong hasnít even finished dessert and already Olympic overruns in the billions are bouncing around Twitter like a frozen hockey puck.

CEOs like Furlong get a big fat salary ($330,00 per year) and a bonus for services rendered, and then they go on world tour and make even more money helping the next Olympic city figure out how to dupe their residents. Except this time Vancouverís overrun numbers will arrive in London and Sochi even before Furlong, which means heíll have his hands full during question and answer period at the London Board of Trade breakfasts, especially from small business owners who will have seen the serious economic downside to small business in Vancouver. I can't even imagine what residents in Russia will do to him, Campbell and Robertson.

How do I know this? Well, starting in 2003 Vancouver saw a steady stream of past Olympic executives with titles like Furlong come to our Board of Trade luncheons to convince Canadians what a great job they did in their respective cities. Some in the audiences scoffed and booed.

We heard from Sydney Australia (supposedly the best Games ever), Salt Lake City (a host city with a hidden $1.2 billion deficit and little appreciable return), Athens (oops sorry Ė no one from Athens showed up because they had a $12 billion deficit, but VANOCís then new CEO John Furlong did claim to a large Vancouver Board of Trade luncheon that Athens was a huge success - a success for whom we're not sure because Greece is now in dire economic straits and their politicians blame it in large part on the Games they hosted six years ago), we even heard from Olympic executives in Turin, which was a bit weird because only two months before their big event they actually threatened bankruptcy unless their federal government bailed them out. The ransom was paid by Italian taxpayers so the red Ferrari could do donuts on the Olympic stage.

It also wasnít pretty in Vancouver after the first week of 2010 Olympic competition when restaurants and retailers just outside of Olympic zones loudly complained spectators werenít showing up at their establishments.

Vancouver restaurants & retailers saw red literally and figuratively.

Some even reported they had less traffic than in previous years.

How could it be when there were, according to politicians, 300,000 foreigners in our city? It was reported later that 150,000 people were literally partying in our downtown streets. So where were the rest of the Olympic partiers? Surely there weren't 150,000 foreigners in Whistler, 30,000 maybe. Each night I walked down Robson and Granville, Olympic party central, and saw mostly a sea of Canadians dressed in patriot red, a smattering of Americans, and Russians, but not too many other foreigners except for the Dutch in orange. Based on all the red I saw in the streets, and the Canadian flags draped around drunken revelers I assumed most of the partiers were Vancouverites. It's possible the wild west hooting kept foreigners in their hotels, if in fact there were any, but we won't know until we see the official numbers. I'm betting they aren't good.

My first indication that no one would show up for the 2010 Games was reports of downtown hotels admiting they still had rooms available only a week before kick off. A week before? Are you kidding me? Who plans to go to the Olympics at the last minute? Heh Boss, I'm outta here next week. See ya! A few weeks before that, Vancouver homeowners who foolishly believed local newspapers when they reported a couple of years earlier that residents could make a killing renting their home, were all left wondering where the Olympic guests were? They spent a fortune fixing up their digs, some even bought a licence, and no one showed up. VANOC even sent cruise ships home. Here's the scoop kids. The only people partying on the streets were Vancouverites.

While most local businesses outside the Olympic zones died, local newspapers, who are Olympic partners, sheepishly looked away, but couldn't resist reporting that companies located in the epicentres of Olympic zones pushed wheelbarrows of gold to the bank every day. Some claimed they did four times their normal business.

The reality in all Olympic regions is that only the restaurants and retailers within a few blocks of the Olympic festivities see any action.

Unfortunately, newspapers never let retailers in on this dirty little IOC secret and instead protect the IOC monopoly. Newspapers are however quick to remind us that we get to keep a new highway to Whistler, the Richmond oval and new ski jump facilities, plus a transit system, all construction projects that would have cost us one third less if they weren't built under the stress of an unforgiving Olympics timeline.

It's easy to stay on budget when your 're already paying a third more than the product is actually worth.

After all is said and done, and a day after the Olympics is over in Vancouver, it turned out as expected that the companies doing great business were elite players like land developers and real estate tycoons, who always make a fortune off the Olympics - building, speculating, and flipping; plus Olympics sponsors like Coca Cola and McDonaldís, who also always make a killing because they get mainlined into schools and the consciousness of impressionable schoolchildren where they prime the fast food and sugar water pump for the future. Another big Olympic winner most people find surprising is local mainstream news media who own newspapers and television stations and who partner with Olympic organizations. These guys make astounding amounts of dough, unlike small local businesses who are left twisting in the wind.

Local newspapers score big time by first selling scads of full color double spread advertising to developers who sell condos like hot cakes during the initial Olympic frenzy within a year or two of the winning the bid, and then later make another killing when Olympic organizations buy pages and pages of special features ad space directly from news companies.

Newspapers generated so much revenue in Vancouver it might have saved The Vancouver Sun from shutting down completely when you consider their parent company, Canwest, filed for bankruptcy protection about a month or so before the Games began. If it wasnít for the Olympics, all three local newspapers might have collapsed long ago. (BTW, Canwest was recently bought by Shaw. Hopefully there will be a vast improvement in the quality of reporting.)

Ironically, the small Vancouver companies hurt the most by the Olympics occasionally advertise in the same newspapers making all that 2010 loot. Even more ironically, some of these small companies will go bankrupt because of the Olympics, which means they will no longer be advertising in said newspapers. Usually, what goes around comes around, but unfortunately newspapers really donít care, because the new businesses that move in to take the place of the companies gone bankrupt will foolishly consider advertising in the newspapers to announce the new store or restaurant openings. Itís a pretty slick process that has the IOC on one end, newspapers on the other, and sorry to say, monkeys in the middle. Hopefully this time around small companies will have learned from past mistakes and choose not to waste money on ineffective newspaper ads when they can get ten times the bump at a quarter the cost from a well planned online campaign.

Small companies get burned in all Olympic regions.

For the bulk of Vancouver business owners however the real shock and embarrassment isnít that they got burned too, but that they were cautioned years in advance to prepare, and most did nothing. As they now know, for the most part as soon as the Games began they hit the wall. No one showed up at their establishments. Not foreigners or locals. No one! The tragedy is that it was preventable.

Is it the fault of restaurateurs and retailers?

Maybe partially, but they trusted news media to educate them about the Olympics, and newspapers let them down. CBC warned them and so did I, but they were totally convinced they would share 2010 wealth, and why shouldn't they be confident when it was all they heard?

Some companies like lululemon and Scotiabank followed the advice in our book almost to the letter, and they did great, but most simply waited for the crowds, which never arrived.

Hereís what I wrote about this process in my book, Leverage Olympic Momentum, published way back in 2006. It was available in Chapters, Duthies, and online, plus I also addressed this unique challenge at length in this blog many times since 2004. My company is relatively small, and we could only help a limited number of companies, which unfortunately left the rest at the mercy of Olympic partners.

John Furlong, Gordon Campbell, and Gregor Robertson worked well together and did an excellent job keeping the IOC secret hidden from local business owners. Kudos to them and to local newspapers and television.

Excerpt from Leverage Olympic Momentum Ė published early 2006

ďMany Olympic spectators expressed that the sporting events were great, but they missed so much because overwhelming crowds made it impossible to casually explore the host city like a normal tourist. Olympic spectators felt they were herded from one facility to the next, and that they never really had an opportunity to experience the real spirit of the region. They never complained their Olympic sporting events experiences were lacking, but they did resent being so limited in their choices of things to do between competitions. Many Olympic spectators and local business owners donít realize large crowds make it difficult to take a casual stroll. Unless spectators know exactly what they are looking for, or where they are going, it is an inconvenience to just poke around. They get caught in the crush. This is why it is so important for local retail businesses to establish a relationship well in advance with Olympic sports fans. If you can connect with them before they arrive they will make an effort to seek you out. With so many options, plus the chaos and confusion, it will be hit and miss for them to find you if they donít do it purposefully. Give Olympic visitors incentive to find you and donít rely on chance.

Most retailers have no idea how seriously the Games can negatively impact their businesses until it is too late. Getting them on board is incredibly challenging because they think they are either a shoe-in for success, or they have nothing to offer.

Businesses everywhere have to quickly recognize they are in competition with Olympic organizations, and that the Olympic business machine does not want to share revenue.

DO NOT count on spectators to stumble upon you, because everyone, especially Olympic organizations will be working hard to monopolize their attention. If you want the traffic, you have to compete for it. Today, everyone has access to Olympic spectators, but you have to plan and execute effectively to leverage the momentum.

Itís ideal to have your web presence in place at least four years before the Games arrive in your region. It will give you an opportunity to design, develop, and produce your online presence, while adding a bit of time to fine-tune it and learn the lingo. You also need at least a full year to integrate it into the much larger Olympic third tier network of independent businesses. Two full years would be even better, which means starting preparations five years before the event. It takes Olympic sports fans time to find you and then it takes time for you to establish a relationship. Consequently, the sooner you start the better. Donít miss the first wave, because early adopters will deliver strong word of mouth.Ē end of excerpt

After the 2010 Games began, it only took a few days for local newspapers, who were Olympic partners, to sheepishly report that business was down for restaurants and retailers in most of the city.

Hereís an excerpt from The Vancouver Sun.

( BTW, it was the only report like this we could find that they published during the entire 7 year ramp up and run of the Games.)

Sunday February 24, 2010 by Chantal Eustace & Rebecca Lindell

ďCompared to the Olympic herds tearing through the downtown core, areas such as Kitsilano, South Main Street or Commercial Drive seem downright empty. Depending on who you talk to, these local hubs are either Olympic dead zones or understated hot spots -- offering a much-needed reprieve from three-hour lineups, elbow-to-elbow sidewalks and standing-room-only pavilions.

Unfortunately, tourists just don't seem to know about them, said Terry Lamour of Cafe du Soleil on Commercial Drive. "I think they're missing the real Vancouver," he said, describing the Olympic impact on the cafe as "benign." Others on the Drive believe that Week 2 will see more tourists venture out of the downtown core.Ē
end of excerpt

Guess what, week two was even worse, and for reporters Chantal and Rebecca to write that these areas ďseemed" downright empty was a gross understatement. It was a ghost town with some retailers reporting even less traffic than normal by about 30%.

Restaurants and retailers were hoodwinked into paying for the Olympics, but as you can see, they received nothing in return except a worn old VANOC/IOC promise that there could be an increased interest in Vancouver somewhere down the road. In other words, the check is in the mail so donít hold your breath.

We advised business and chamber of commerce leaders repeatedly to warn business owners this would happen, but they ignored our advice.

VANOC boasted years ago they would build a souvenir Superstore and suck $22.6 million dollars out of Olympic spectators, and they were good to their promise. The HBC Superstore downtown reported they sold more than expected. Too bad they didn't spread the wealth around the city.

When politicians building Canada Line for the Olympics told Susan Heyes, owner of a clothing shop on Cambie that was suffering a devastating financial hit as a result of construction ... to suck it up, and that taking a bullet for the team was a natural part of running a business in a big city, she sued and won $600,000 to cover her losses.

An angry food retailer surfaced today with a $2.5 million suit against the City of Vancouver and VANOC for disruption of business. The circumstances are different, but the point is that when the Olympics move into town it has a serious negative impact on many local businesses.

Considering the precedent has been set it's conceivable other small companies can do the same, but this time under a class action.

Hereís something else to consider regarding
the "relative successĒ of the 2010 Games.

The exuberance displayed by Vancouverites during the Games was unprecedented at any Olympics, but realistically, it had little to do with the job VANOC did, at least not directly. They bumbled and fumbled their way through it at almost every turn from start to finish, and the first week of the Games underscores this perfectly. Everything they did NOT have a direct hand in worked well, like secuity and the airport for example, but everything they managed directly turned into a comedy of errors.

Everyone who attended the street festivities would agree that at some points the unbridled excitement was completely over the top, and if you looked as closely as we did you would have noticed most of the really crazy people were young, normal looking (not hooligans) men and women between about eighteen and twenty-eight.

Itís not a coincidence that this group is also the most stressed in BC. Vancouver offers them very little in regards to a satisfying, affordable lifestyle and the Olympics gave them hope. False hope mind you, but hope nonetheless. They were being pumped up for it for years.

This group probably grew up in Vancouver, and their parents probably still live here - maybe, if they haven't lost their homes due to high taxes. The frustration young Vancouverites feel is caused by not being able to afford to continue to live in their hometown and enjoy a life they have become accustomed to and deserve. It was their families who built this city, and it wasnít on rock and roll, but on blood, sweat, and tears.

The harsh reality is that young Olympic Canadian partiers have very little chance of being able to afford a home in Vancouver. It was only a few weeks before the 2010 Olympics when Vancouver was rated as the LEAST affordable city in the world in which to live, even though our politicians claim we are the most ďliveableĒ city in the world Ė itís obviously only liveable for the rich. House prices are obscenely high, and wages incredibly low, which means it is absolutely impossible for even young professionals to qualify for a mortgage. Thousands have been forced out to the burbs since winning the Olympic bid, but this story is for the most part unreported, and when it is, it is downplayed.

Is it any wonder young Vancouverites were partying so hard and out of control at the Olympics? Police had to shut down liquor stores. Hospitals reported being swamped with young drunks who were poisoning and injuring themselves in record numbers. Vancouver hospitals broke all time records for alcohol related injuries at an Olympics event anywhere.

Do we get a gold medal for frustration and insanity?

The Games were a catalyst for young people to release pent up and overwhelming frustration. How else can you explain hundreds, even thousands of young people walking by every video camera they saw on the street over the last couple of weeks screaming like maniacs at the top of their lungs? It went way beyond sports or patriotic justification.

Drunks climbed on light poles and bus stands and pissed in the streets.

It escalated beyond fun and bordered on insanity even before Canada won menís hockey gold. Young people were screaming about curling, a sport and athletes they knew nothing about. Politicians would like us to think this is a good thing, and that it reflects patriotism, but it doesn't.

It tells me politicians are not doing their jobs.

BC politicians are quick to pat themselves on the back for a job well done, but itís unjustified because it is their lack of creativity and poor leadership that has caused young people so much frustration.

Itís like pushing a kid in front of a moving train and snatching them back to safety just in the nick of time and calling yourself a hero.

To begin, VANOC dropped the ball way more than anyone expected. Over the course of the last seven years they remained extremely tight lipped about everything they did, so we didn't see many of their mistakes, but as soon as it came time for them to put the show on the public stage their lack of professionalism became obvious.

I'm not criticizing midline managers, workers and volunteers. They did the best with what they had. I'm referring to the executive leaders pulling down big salaries. They boasted constantly about how many times they produced events of this magnitude so you would think they could get it right. I'm also not being critical from a lay person's perspective. I have almost two decades of experience producing, managing and directing live performance entertainment on stages all over the world and in venues bigger than BC Place. I've also worked extensively with the best production companies in the world, including thousands of volunteers.

I wouldn't have lasted a month in my position making the mistakes witnessed in the ramp up and during the 2010 Olympics.

Granted, the lack of snow on Cypress was out of human control, and it was handled extremely well, but there were technical problems that should not have occurred, and because of these glitches it created a negative tone that put everyone in Canada on edge. BTW, I'm not including the death of Nodar as a glitch. It was a tragedy of human error, and where liability lies remains to be decided.

I described earlier all the glitches, and missteps, so it's not necessary to repeat, but keep in mind that all Canadians, especially people in BC, and especially young people in Vancouver who are extremely sensitive to peer pressure and criticism were embarrassed and disappointed the first week. Consequently, when luck started turning our way everyone breathed a huge sigh of relief. Young people have a unique way of handling stress, and we saw it roll out on the street, but let's back up a bit and consider how we led up to their insanity.

In June of 2003, the month before Vancouver won the bid, BC was considered a ďhave notĒ province. Quite literally overnight, people in BC found new hope, false as it is.

Unfortunately, between then and now, young people looking for good permanent jobs also realized the hope was short-lived after it sunk in that when the Olympics facilities and infrastructure were complete, the jobs were gone. They had a carrot dangled in front of them and then snatched away. Instead of lazy and ineffective BC politicians building lasting social enterprise they bought an Olympic lottery ticket.

Frustration fueled by a false sense of patriotism carried people through the Games, but as soon as the costs start to roll in, the good times so prevalent during the Games will inevitably fade. This is exactly why Colin Hanson during the budget announcement made such a big issue of further construction in our province. We don't just need construction jobs, because they are not sustainable. We need technological, bio medical, and environmental industries to open up shop here.

We need to infuse our province with long term intellectual opportunity, not just short term manual labour.

Another big question BC has to answer is why do people who live here feel so disenfranchised from the rest of Canada? Why is patriotism such a hot button in BC? How did BC politicians screw this up so much that a whiff of patriotism puts rational people over the edge? The rest of Canada has always loved Vancouver and BC, unfortunately the feeling has never been mutual. Why does Vancouver have such an inferiority complex? Does a hockey game really change anything, a hockey game we will be paying for for a couple of generations? I doubt it. It's a bandage not a cure.

Already, only two days after the Olympics is over, BC Premier Gordon Campbell, the drinking and driving politician who was seen manically waving a Canadian flag during Closing Ceremonies, announced more budget cuts. He already recently axed funding for education, sports and culture, and he gave a little bit back today, but it's not near good enough.

Unfortunately, Campbell has no choice.

Someone has to pay for his 2010 party.

Regardless of what Campbell and VANOC say about Olympic costs, it is irresponsible of them to claim taxpayers won't be on the hook for Olympic expenses. If they are so sure, let's see the books - today.

Olympic sponsors are already on their way to London and Sochi with tails between legs looking for the next conquest, which means they wonít step up here any time soon to help us out unless forced. The only ones left at the Vancouver table to pick up the tab are the young men and women who screamed so uncharacteristically long and loud on the street.

Ironically, they were also the same young people who could not afford to buy tickets to actually see any of the sporting events. Maybe thatís why they were screaming. They did however get into many free concerts by "B" artists during the Cultural Olympiad, paid for by tax dollars, which means it wasnít really free, only deferred. Maybe thatís why they were screaming, or maybe it was because the liquor stores closed.

Iím sure young patriots will be screaming next month too, when they figure out the party is over and they'll be paying for it for a very long time.

While Canada's spirits are still up maybe we should hold out our hat.

As the homeless in Vancouver's Downtown Eastside can attest,
we have plenty of experience in that department.

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Own the Podium?

The official creed (guiding principle) of the Olympics is a quote by the founding father of the modern day Games Baron de Coubertin. He said, "The most important thing in the Olympic Games is not to win but to take part, just as the most important thing in life is not the triumph but the struggle. The essential thing is not to have conquered but to have fought well."

The Olympic motto consists of three Latin words Citius, Altius, Fortius, which means, "Swifter, Higher, Stronger." The 1924 motto is meant to encourage athletes to embrace the Olympic spirit and perform to the best of their individual abilities.

No where does it imply that winning the most gold medals for your country is part of the agenda. In fact it implies exactly the opposite.

The IOC maintains that it doesn't actively encourage countries to collectively win the most gold medals, but on the other hand they also don't institute anything to ensure that the Games are not turned into corporate money grabs.

In fact, IOC sponsorship and partnership business models encourage a win-at-all-costs mentality. It is the reason they have doping, fraud and bribery scandals.

The IOC invites young people to compete in the Olympics using the original Creed & Motto. But when it comes to delivering on the promise they fall incredibly short.

The Olympics today isn't as much about sport as it is about money and profit.

Priorities changed over the years and so too should their Creed & Motto.

If athletes go for the gold, and the IOC goes for the gold, and corporate sponsors go for the gold, and governments go for the gold, and considering that you will have to foot the bill for their gold, why should you be edged out of the race?

Move to the starting line.

Own the Podium?
Own Your Home?

Real journalism consists of
what someone doesn't want published,
all the rest is public relations."
George Orwell

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