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Mega events: Bids get higher and higher

October 29th, 2007 by mortenappel · 2 Comments

Year by year, the bids for hosting mega events, like the soccer World Cup and the Olympics, have risen to astronomical figures. More and more countries enter the bidding process, and this bidding war raises the probability for a negative economic outcome for the hosts. In the end, it is the citizens of the hosting nation, region or city that must pay, believes Dr. Markus Kurscheidt.

- They’re just paying anything to get the events, and that is the death of efficient planning, says Dr. Markus Kurscheidt from the Ruhr-University, Faculty of Sport Science.
He believes that efficient management is the key to success when hosting mega events.

- If you do it successfully, you will have an economic benefit. If not, it’s an economic burden, he says.

Watch Dr. Markus Kurscheidt’s presentation and click through his slides (opens in a new window).

The dramatic increase in bids for the mega events takes place because of a simple market mechanism called supply and demand Markus Kurscheidt explains. The number of potential hosts is growing, but the number of mega events remains the same, bringing the bids to the sky.
- We have a really difficult constellation with powerful associations like FIFA and the IOC on one side, and new countries from the developing world, that want a place on the international stage, on the other. I’m not criticizing that the developing countries get they’re share of events, but the supply of mega events is limited, and the number of bidding countries is growing, he says.

The reason Markus Kurscheidt believes mega events get more and more unprofitable is because many of the new countries on the bidding scene have a type of monopolistic leadership. That means that they can bid as much money as needed for the events because there’s no opposition to argue for the lack of profit. In general these countries hasn’t got the type of efficient management tradition like for example the European countries, therefore raising the risk, that a mega event won’t leave a long-lasting legacy that can benefit the local population.

- South Africa is hosting the soccer World Cup in 2010 and they are building a stadium in the middle of very poor area that’s without water. By doing that they believe to attract tourists, says Markus Kurscheidt.

Markus Kurscheidt believes that the looser in this development will be the poor.

- Maybe the lower class in those countries will get a temporary job during the event, but it won’t have a long legacy. This type of event will be for the middle- and upper class, says Markus Kurscheidt.

The vicious circle begins in the international organisations. They have to change the bidding process it self to solve this problem, he ends off.

- Will the World Cup in South Africa only benefit a small part of the South African population?
- Will the World Cup in South Africa leave a lasting legacy in South Africa?
- Will the other nations in Southern Africa benefit from the coming World Cup?

Tags: Theme: Mega-events

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