Olympic rings in Sochi

What are the Olympic Games in Sochi? For today there are three interpretations. First one is that the Olympics are a marketing product. The second – it is an elegant way of application of a huge budget. The last explanation is that the Olympics are a method of State machinery capitalization.
Something was promoted
Victorious reports about the Olympics 2014 in Sochi don’t cease. The head of the bid for the 2014 Winter Olympics, Dmitri Chernyshenko said: “Now, looking back we can be absolutely confident that the bid committee has done its best to win. We created a unique bid, seriously influenced on image of Sochi and all our country in the world. We’re proud of our result”. It turned out, from this statements, that skeptics from the IOC were defeated by almost all Russian people. And the end of the statement was proper, in a way that “it is not time to relax”, “we are to go on working and turn the dreams in reality” an so on. The style is easily recognizable – it is one of an Old Russian epos The Tale of Igorґs Raid (admittedly, in the tale “the ours” got it hot) but of a bureaucratic kind.
There are still more considered comments. One of the specialists in sport marketing reckons, as he has said to polit.ru, that there are three factors that favoured Russia’s victory/ The first one is personal participation of Vladimir Putin in the race (it is remarked by all analysts, so the statement is correct). In spite of some pathetic element, the president strengthened the Russian delegacy a lot; so if it were not his support, Sochi had lot less chances to win. The second factor is that the delegacy has spent a lot of time in Guatemala, lobbying themselves and successfully convincing everybody of their sincerity and stability.  Russia’s appearance was quite emotional, in contrast to South Korea and Austria. The third component is a happy usage of marketing technologies. The bid of Sochi  was created according to the most prominent rules and technologies of promotion of a brand. We saw bright wrapper and attractive content, well thought-out ideology and developed communication. There is however a small nuance: the product does not exist. On the whole the election campaign coasted tens of millions of dollars, reckons the expert. It is comparable with a promotion campaign in an extremely competitive market. And the figures are approximately the same as ones of the G8 summit in St. Petersburg.
A moving speech
Usually everybody inquires how many does “it” cost. For some reasons it can be hardly estimated. Our expert noted that if divide cost of the holding the Olympics from costs of reconstruction of the city, the proper holding the Winter Olympics 2014 will be hardly much more expensive that one in Turin 2006, i.e. $1,5-3 billion.
But at the moment there are no sport facilities and proper transport infrastructure in Sochi, so the Olympics are a kind of ideological factor that warrants such huge investments. The expert has also indicated that funds invested in reconstruction of the city can be returned as taxes, since the matter concerns creating of a colossal tourists and sport centre.   
However the Olympics are an unprofitable enterprise. Pure profit from Turin 2006 was about $265 mln. It is difficult to estimate, if it is many or few, but it is obvious that there one can’t reckon on such income from the Sochi Olympics.
That is so for many reasons, for example for a common human element. According to the expert, the fact of building of all facilities in terms itself is beyond doubt. The high risk is exploiting of the facilities, since one of the main problems in Sochi is lack of skilled staff. So the staff will be hired and taught or brought from all the Russia.
The expert has almost confirmed our conjectures that the budget will be executed according to the principle of “appointed sponsors”. The main investors of the project are well-known, it is several big business-groups, including “Base element”, “Interros”, “Gazprom”. It is not quite clear, if they have been really appointed project’s investors or they just root for Russia’s prestige.  There is an opinion that businessmen will earn on the Olympics – on building the facilities, on tourism if the Russians visit the new Sochi after the Olympics. And one never plays with milliards without the idea to earn.
And the last thing is that the Olympics are nice and harmless way of budget development.
And the image of the country
At the same time some officials will receive the opportunity to add themselves weight in the State machinery. The State machinery capitalization is an effect that can be difficulty estimated. Say, it seems that the vice-premier Alexander Zhukov has benefited from the Olympics, since the great project give him opportunity to appear on television constantly. But German Gref has broken even – just after he had left for Guatemala some officials from his ministry were arrested.  Just try to guess, were there some profit for officials if the Russia had lost.
But let’s end on an optimistic note – there is an evident profit from the Olympics in Sochi. It can be hardly imagined, said the expert to polit.ru, but at present in the view of sport marketing Russia is on the level of the Third World countries. But already in five, seven, ten years sport in our country will advance to the level of the market economy. And Sochi 2014 will play a significant role in it. In Europe such processes lasted during tens years, in our country that can occur in several years. And the head of the bid committee is right, Russia receives a unique opportunity to solve a problem of status and image of the country in the world community’s opinion. How officials will deal with this opportunity – that’s another question. In the end the first vice-premier Sergei Ivanov promised recently that in 2020 we will live in democratic Russia. And 2014 is halfway to the long-expected goal.
Ivan Grinko
Mikhail Zakharov