Discuss Considerations in the Planning and Hosting of the London 2012 Summer Olympics Games in Terms of the Economic Perspective

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The 2012 Olympics games were chosen to be held in London Stratford, Newham. The British Olympic Association had been trying to bring the Olympics to “London since 1997”. United Kingdom tried to bid the Olympics 3 times, each time failing. The bids were in 1992, in 1996 and 2000 for Manachester. The only reason why London made a bid is because the international Olympic Committee said that “London city” was the only city with a chance of winning it within England. Therefore the decision was made to bid with London. On 6 July 2005 in Singapore, the IOC announced that the Olympics would be honored to London. When a city decides to host the Olympics, as London plans to in the summer of 2012, it should be well aware of the huge and lasting economic impact that will inevitably take place. It is important to remember that there are both costs and benefits of hosting the Olympics. Under these terms, it seems only right to consider the effects the Games will have on the local economy as well as the wider reaching finances of the organizing committee. The Olympics acts like a catalyst to economic improvement in certain areas. Areas for regeneration such as the Lower Lee Valley (an area in East London stretching from Canary Wharf to Stratford – an area with poor housing and high unemployment), are having to speed up development due to the result of the Olympics, which can be seen as an advantage. On the BBC website it quotes, “Plans for a new Olympic park based around the deprived area of Stratford in London's East End presented a powerful case for transforming the social and sporting landscape of the capital.” This means that London East End will benefit from the Olympics by having economic improvement. “Legacy was the word, and it was used often to deliver the message give us the Games, and one of the world's great capital cities will be transformed”. (Keogh, Francis. “Why London won the Olympics”, online BBC article, July 2005). The scale of transformation will be vast as the London Olympics will generate a larger economy which will effect markets and trade. The reason the economical impact on the city has become so big is because there is a larger market (spectators, television rights to the Games, radio). There are also factors within the Olympics that need high levels of financing- like the increased number of competitors and better venues. To cover the costs of this spending, the organizing committee has to deliver a higher quality of venues, entertainment etc which eventually results in increased revenues and economic change. Although, the Olympics don’t always bring economical benefits for the host country, in fact it can result with the country’s economy to fall. Countries to have experienced this are Munich, Montreal and Los Angeles. London may experience the same situation as the cost of the Olympics is £2.375bn. They are currently using finance from the National Lottery(£1.5bn from a new Olympic lottery game and form existing lottery funds), Council Tax(£625m raised by increasing London Band D council tax bills by £20, starting in 2006/7), and the London Development Agency(£625m raised by increasing London Band D council tax bills by £20, starting in 2006/7 ). Together, they fund a huge amount towards the Olympics, but this still isn’t enough as there is an operating loss of nearly £500 million. To fill this loss, it is hoped that the tourism can generate enough revenue to cover it. (“Disadvantages with London” online at olympics.pthimon.co.uk) The methods used in financing the Olympic Games bring fear to the economical impact. The International Olympic Committee (IOC) committee has stated that it has “cleared itself and has no responsibility” for any debt resulting from any Olympic Games. Meaning the IOC take their share in revenues from the game and if there is any debt it is the host (londons) liability. Still the local organizing committee shares none of the debt trouble either. Still though, debts are...
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