Three of the Sport Business Ultimate Sports City judges – Leanne Arnold, Sean Parry, Senior Consultant, The Sports Consultancy and Tanya Heimlich-Ng Yuen – discuss the future of large-scale events hosting and the major trends that will dictate the direction of the industry.
The past few years have seen a debate about the future of large-scale sporting events and their continued viability outside all but a tiny elite of global cities. With London reclaiming its crown as the world’s Ultimate Sports City, following New York City in 2016, is this a further sign that only megacities can host mega events? Leanne Arnold: The trend is definitely focusing toward megacities. For smaller cities to be successful they have to put on more events. Budapest is a really good example – they’re looking at hosting more events, such as the Fina World Championships, they’ve announced their intention to host the IAAF World Championships. If the smaller cities want to host major sporting events, they’ve got to do what the larger ones do which is invest in hosting smaller events. In other words, they have to earn their stripes, get their skin in the game and all the rest of it.
Tanya Heimlich-Ng Yuen: As major events have evolved over the years, their needs fit more naturally with major cities – and likewise smaller events with smaller cities. This is simply a fact and while there is nothing wrong with this, it does show that there is a flaw in the traditional hosting model. Sean Parry: If considered at a city level, the list of potential mega-event hosts around the world is naturally limited. Either the city must already possess all the required infrastructure to host the event or have an appetite, backed by public support, to invest significant sums of money – often public – in new facilities. It must also have the operational capacity and physical infrastructure to cope with an influx of hundreds of thousands of additional visitors during a short period. While rights-holders can take cost and risk-sharing measures, these simple facts will remain.
Is money now the main factor in determining where events go? LA: If you look at what happened with the bids for the 2024 Olympic Games, with Hamburg, Boston, Rome and Budapest all pulling out, they’re all significantly smaller than LA and Paris. With the economic circumstances that the world has faced in the last few years, for smaller cities the cost is proportionally a lot more than it would be for a city with eight million people, for example. In cities like Rome, where they can’t deliver their own civic amenities, it’s hard to justify why you’d spend a couple of billion euros on hosting an event. Sean Parry: For rights-holders, in many cases, major event portfolios generate a large proportion of operating revenues, either directly through event-specific income, or indirectly by bolstering the value proposition for broadcasters, sponsors and other partners. Therefore, the overall financial viability of event portfolios will always be a key factor in deciding where events should be hosted. However, sophisticated rights-holders are increasingly taking a balanced approach to how they use major events, both as an overall portfolio, but also over the longer-term cycles of individual events. Major events can be used to access new markets, attract new audiences to the sport, bolster participation, create unforgettable content and build long-term stakeholder buy-in – outcomes which are in many ways as important as the financial for the long-term development of rights-holders and sports. The success of London sits at the intersection of all these goals – they host events which the public engage with, are financially successful and create tangible wider impacts for the local population.
How can smaller cities ensure that they’re still able to host major sporting events? What kinds of strategies can they put in place to maximise the limited resources they have? LA: I think they just need to have the ambition and follow-through. Budapest hosted the Fina World Championships last year and showed that it was such a shame they missed out on 2024, because Budapest would have hosted a fantastic Olympic Games. If you take that as an example, what people need to do is experience these smaller cities. Another example is Doha, which hosted the cycling Road World Championships, they hosted a Fina event the year before, so they’ve invested in it and people have experienced large-scale events and international events there. I think that’s what they have to do. Sean Parry: The cities that are the most attractive event hosts for rights-holders have two things in common: they create a value proposition which identifies how they will deliver on a wide range of rights-holder objectives, and – as importantly – present a clear vision of the how the delivery of the event will be integrated into the wider strategies and plans of the city. Smaller cities offer rights holders a different set of opportunities when compared to mega-cities, in particular the opportunity to be the headline act and the high levels of commitment to deliver that accompany this status. If they can communicate these benefits in a compelling manner, as well as demonstrate a clear hosting strategy and legacy, smaller cities can be just as attractive as larger ones for major event rights-holders.
On the other side, what can rights-holders do to work better with smaller cities to bring their showpiece events to the widest possible audience? THN: With rights-holders facing decreased interest in hosting from cities of all sizes, they must do all they can to ensure their events remain relevant and attractive, which includes adapting to new hosting models. For smaller cities to host major events, a good solution can be co-hosting with other cities or regional hosting. The idea of regional hosting is one that is gaining ground – why can’t Wales host an Olympic Games? Queensland, Australia or Alberta, Canada, for that matter? When an event is spread out it has greater potential to involve more people and reduces the financial risk put on a single host city. By moving away from the rigid traditional hosting models, rights-holders can increase interest in their events and open themselves and their events up to many new opportunities. Sean Parry: Rights-holders can do two things: first, they should closely evaluate the value that their events can provide to cities across the spectrum of economic, social, media and environmental impacts. Second, they should help their hosts to maximise these outcomes in the way the event is calibrated and delivered in market. A genuine commitment to partner with a host city will increase the return on investment and objectives for hosts, creating a positive legacy for the event and opening a wider pool of potential future host cities. To achieve these goals, rights-holders need not only to accurately communicate how their event can be used as a platform to achieve a wide range of public sector objectives, but also to create tools and approaches which allow them to maximise these outcomes.
For example, at the outset of their relationship with a new host, they could run a series of impact creation sessions. A focus on enhancing city benefits also allows rights-holders to ensure that the operational and capital costs required to host their event are proportionate to the value the event can bring and that rights and benefits are optimally allocated. A good investment is a good investment, for big cities or small. LA: It’s a difficult question to answer. On the one hand, a rights-holder like the IOC must continue to attract younger people and grassroots participation etc. On the other they’ve got to be able to still attract those people who are going to attend the Olympics – the average age of an Olympic spectator is 52. So it’s a difficult balance and a difficult question to answer.
What major trends show the future of the ultimate sports city? How are the criteria the rights-holders look for in host cities changing? Sean Parry: Major event bodies across sport, culture, business and heritage have historically worked in silos, missing out on the opportunity to create a cohesive approach to deliver wider city- and national-level goals through events. We now see event agencies that we work with, such as Event Flanders, starting to take a more holistic view of ‘major events’ in general. Major events should be simply viewed as a platform that a city can use to deliver almost any outcome they like. Developing a joined-up approach which connects wider public-sector strategy with the selection and delivery of all major events – across sport, culture, business etc – creates consistency in approach, efficiency in delivery and amplifies outcomes to the benefit of the general public. LA: I think increasingly it’s about the experience, the human experience. Youngsters are becoming more attracted to online experiences and artificial intelligence. But I think that increasingly, just because you haven’t got a ticket doesn’t mean that you can’t be part of this great big festival, doesn’t mean you can’t be proud that your city and your country are hosting these types of events. I think it’s becoming more and more about the experience, whether that’s online or in reality. That’s becoming more compelling for people. Everybody can get involved, it’s not an elitist event. Formula One for example has the most expensive ticket on the circuit, but they’re creating fanzones and festivals in the cities they visit, to ensure everyone can be involved.