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SPORT BUSINESS INTELLIGENCE

Hans Westerbeek

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The costs (or benefits) of Olympic Winter gold

It is the final day of the Olympic Winter Games in PyeongChang, South Korea. Unlike many Australians, most of whom would prefer the Summer Games or even the Commonwealth Games as a two-week broadcast or social media sport watching overdose, I have looked up the day’s results on the Olympic Winter app every morning, and upon arriving home turned to the Channel 7 broadcast every night. Thank god, we are in the same time zone this Olympic winter cycle. And thank you Channel 7… for not totally ignoring speed skating this time around. As a Dutch Australian, or Australian Dutchie, whatever you prefer, I have a sporting love affair with the Winter Games. Speed skating is in the genetic makeup of the Dutch, and once again, the medal tally of PyeongChang confirms this extreme specialisation by the 17 million citizens’ nation. 17 medals of which 7 gold in speed skating and 3 medals of which one gold in short track speed skating. 5th on the overall medal tally of the 2018 Games. If you think this is an amazing achievement, think again. Norway, with 5.3 million citizens, topped the medal tally with 39 medals, 14 of which gold, outperforming much bigger nations such as Germany, Canada and the USA in second, third and fourth spot.

The Guardian (https://www.theguardian.com/sport/2018/feb/22/norway-winter-olympics-success ) reported that Norway achieved this feat on a 10th of the UK’s elite sport budget, embracing camaraderie and grassroots participation as the key factors of success. Admittedly, Norway has mountains, snow, ice and forests in which many of the Olympic disciplines can be readily practised and enjoyed, but it remains astonishing that preparation on a budgetary shoestring and based on egalitarianism has delivered such amazing success. Sport for all is at the foundation of Norwegian sport, and in the Netherlands, this is only moderately different. For decades, the Dutch have spent roughly 70% of their federal budget for sport on community and grassroots sport participation, much like the Norwegians, and unlike Australia, where about 70% has gone into elite sport preparation.

From a sport business point of the view, the Dutch speed skating success is funded by private business rather than huge government investment. Other than in Norway, Dutch speed skaters are full professionals, employed by corporate teams that are sponsored by business. The contribution by the Royal Dutch Speed Skating Federation is modest compared to this corporate investment. It pays to sponsor speed skating in Holland – the public interest is huge. The Australian government, on the other hand, has spent about 5.5 million dollar per medal won in South Korea, in stark contrast to the efficiency of success in Norway and the Netherlands. The New Daily notes that Olympic Summer success for Australia is even more costly at over 11 million per medal, but all of this delivers a health return to society according to CEO of the Australian Sports Commission Kate Palmer, who notes that “For every athlete who represents Australia at an Olympic or Paralympic Games, there are untold thousands of kids who have dreamed or are now dreaming of representing Australia or just giving sport a go. It sets so many people on a path to a healthy and active lifestyle. (https://thenewdaily.com.au/sport/winter-olympics-2018/2018/02/24/winter-olympics-2018-olympic-funding/?utm_source=Responsys&utm_medium=email&utm_campaign=20180225_Sunday_Best.

However, the discussion to be had in Australia remains about what would be the best bang for our buck, and I patriotically refer to my country of birth, to compare with my country of adoption. If we are to best benefit from the money that we as Australian taxpayers spend on sport, where should it go? To me, the Netherlands is a shining example of a reasonable balance. Elite sport is important and as a professional or aspiring athlete in the Netherlands, the provisions, allowances and elite sport environment is pretty good. There is also a healthy sport business climate where the costs of elite performance are transferred to the private sector, rather than being dependent on government handouts. Holland performs well at Summer and Winter Games (on balance better than Australia and Norway) and also rates high on medals per head of population at both events. I absolutely love the socialist attitude of the Norwegians – that sharing and collectiveness can deliver amazing results – but some good basic capitalism, and in the process backing winners, can complement this. In the end though, there is one thing that Norway and the Netherlands have in common, and as trump card over Australia when it comes to the Olympic Winter Games. Winter sports are in their blood – with a whole nation bound to support their elite performers during cold, dark and wet or freezing winters. In Australia, the weather is simply too nice to be passionate about snow, ice, wind and bloody cold weather.  

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Nice piece Hans. Though you'd have to question whether the ASC has any self-interest in presenting an evidence-free view of the return on the government spend they oversee..... untold thousands??

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