Examination of Witnesses(Questions 20-31)
MR CHARLES
ALLEN, MS
FRANCES DONE,
MR DAVID
LEATHER AND
MR HOWARD
BERNSTEIN
WEDNESDAY 11 DECEMBER 2002
20. What sorts of things are you hoping to do?
(Mr Bernstein) One of the things which we encouraged,
again through Frances and some of the legacy work, Spirit of Friendship
festival, was the development of links between different schools
and different nations throughout the North West region. We know
certainly in other parts of Greater Manchester, particularly Rochdale,
where those links are flourishing even more today than perhaps
they were several months ago. So we see all of that as being a
continuing process which we are only too happy to support and
encourage.
21. But did the fact that the World Cup was
taking place a little bit too close to the Commonwealth Games
make it difficult for you with publicity? I think we talked about
that in an earlier session.
(Mr Allen) We did, and we were anxious about it, in
terms of would you get sports burn-out; actually, we got the opposite,
because the BBC marketed it as a summer sport. We built a very
close relationship with the BBC. Wearing my day job hat, we know
them very well and we are also competitors, but actually we have
got a very close relationship there, because it was quite key
to market it as a summer sport, rather than the sense, the football
is over and therefore there is nothing to look forward to. So
actually it worked incredibly well for them, and they got fantastic
ratings, nine million viewers for the opening ceremony, it is
the only opening ceremony that got that volume and actually built
every 15 minutes, which is unheard of in terms of any of these
Games.
(Mr Leather) If I can just add to that, I think probably
there were two areas where it did impact negatively, and that
was with certain companies who had invested very heavily in the
World Cup, it was then very difficult to attract them to the Commonwealth
Games for sponsorship, and some of those companies we only got
on board very, very late in the day. And the other area was probably
merchandising, because World Cup merchandise was everywhere, it
was very difficult to interest people in our merchandise until
really the World Cup had died down. And of course many of the
stores that might have stocked our merchandise were more interested
in the World Cup because they perceived that had a bigger commercial
return to them. So a couple of negatives there.
22. Finally, who was it thought up the rain
ceremony, who gets credit for that?
(Mr Allen) It depends which rain ceremony, the one
we meant or the one we did not mean, in the closing ceremony.
There were two rain ceremonies.
(Ms Done) We have repositioned rain, the rain for
Manchester anyway.
(Mr Allen) We did not call it rain, we called it a
water ballet, so we had a water ballet at the end of the Games.
23. Congratulations again.
(Mr Allen) Can I just record our thanks to yourself,
actually, in helping us manage the relationship with Heathrow
Airport. That was very, very useful indeed, in terms of having
them as a partner and coming on board. So I would just like to
record our personal thanks to you; that was very helpful.
Chairman
24. Mr Leather mentioned merchandising, and
the witnesses will know that that has been a preoccupation of
mine throughout, and, in fact, the material you produced in the
end, particularly the shirts, turned out to be collectors' items.
One thing that I do disagree with in the material you have sent
me was the view that it was only in the run-up to the Commonwealth
Games that merchandising became an attractive proposition. Now
I grant you immediately that it was only fairly shortly before
the Games that the buzz went round and that people felt that a
really big thing was going to happen. On the other hand, when
this Committee went to Australia at the beginning of 1999, and
it was from the report after that that resulted the appointment
of Mr McCartney and the structure that was so successful, at the
beginning of '99, when I was in Sydney, they had Olympic Games
shops open in Sydney and they were crowded, and at Sydney Airport
as well. Now, as I say, I am not diminishing the fact that the
Commonwealth Games are different, but then again these Commonwealth
Games were different from other Commonwealth Games, and they were
a much bigger and more publicised event. Given your time over
again, would you have started merchandising sooner?
(Mr Allen) I think David made a very good point. The
problem is the mental shelf-space, if you like. Retailers will
not start considering it until they know it is live, and the problem
we suffered from was "Is this going to be a big event or
not?" And even after the opening ceremony we had a number
of doubters, saying, "I don't know if it's going to be successful."
It is amazing the number of people who now come up to me and remind
me how successful they always thought it was going to be. But
the two and a half years when we had certainly the Chairman's
support, in terms of what we were doing, we were pretty much alone
in that area. I think a couple of lessons. Coming directly after
the football was unhelpful, and still people's perception of what
this might be was quite different. I think people know what the
Olympics will be, they did not know what this was going to be.
And in some ways that was helpful, because we were able to exceed
their expectations because we knew what we could deliver, but
in areas such as you have talked about it was less helpful. I
think the performance of the team needs to be put in context.
This was the most successful merchandising for any Commonwealth
Games ever. And I think some of the points that you asked to look
at last time when we saw you were actually very helpful in steering
us in the right direction, in terms of moving it forward. So I
think the honest answer is that, yes, you can always do better,
but would it be materially different, probably not, actually.
I think for the next Games then they have the opportunity to build
on what we have done and label it as a global event. And the thing
that always amazed me was the number of pins sold, they became
a currency, it was an incredible volume that we were selling.
David, do you want to add to that?
(Mr Leather) Yes. I agree with everything you have
said about the value of the Olympic brand, and therefore it was
easier to establish merchandise in the market-place. You encouraged
us, in fact, to open stores earlier, we did open three stores,
they were all in the North West, one at the Arndale, in the town
centre, one at the airport and one at the Trafford Centre; and
we looked at opening other stores. Firstly, we found it difficult
to encourage licensees, if you like, to take the risk of stocking
up; and secondly we did find that, only perhaps six weeks, two
months out from the Games, sales in those stores, even in the
North West, were actually quite slow. So I think if we had been
encouraged by greater sales in those stores we would have pushed
the boat further and perhaps come further south, if you like,
to open up additional stores. But with the experience that we
had and the resistance and the reluctance of licensees to risk
investing in stock, we kept it to just those three stores.
25. Another issue is sponsorship. If you go
into the Olympic Museum on the lakeside at Lausanne and you walk
in, what faces you is a huge wall on which the Olympic idea of
sponsorship is symbolised by a list, a huge wall covered with
a list of Olympic sponsors. Now before you people took over there
was only one sponsor, and it is clear that the sponsorship was
very, very important in terms of the financial viability of the
Games. Are there any lessons to be learned? I remember you had
that event at 10 Downing Street, where the Prime Minister had
an event for sponsors. Is not one of the lessons that (a) advance
work has got to be much more effective and committed, and, two,
this is yet another lesson that, although Commonwealth Games,
Olympic Games, whatever, are localised in a particular city, national
support and national promotion is indispensable?
(Mr Allen) I think the big issue, one of the biggest
challenges for us, as we came together as a team, was with sponsors,
we had one, effectively, at that point in time. And the key issue
that people asked was, "Is it going to happen, and is it
going to be successful?" So until you had the funding in
place, the structure in place, an overt Government partnership
with Manchester City Council in place, then that was a barrier
to success. Having said that, looking at the performance in context,
this is the worst advertising and sponsorship recession for the
last 20 years; it is my day job, so I know.
26. Where did you get that experience, Mr Allen?
(Mr Allen) But actually I think what we put in place
was a very hard-nosed sales process that identified not only the
people who could provide the money but the type of sponsors that
would actually give global appeal. So it is not only about getting
somebody who can write the cheque, it is about somebody who can
exploit it, so things like getting Cadbury's on board, and then
fully funding £3.8 million, the whole baton relay was quite
key and quite an important part of the sponsorship proposition.
As Frances said, although there were a number of cultural things,
we actually sat down and said, "Eleven days of sport will
not give us enough of a commercial proposition," so we had
to create a new commercial product that had an educational element,
that had a sports element, that had a youth element, that had
the baton relay. So stage one was creating that product, and then,
having done that, a very hard-nosed sales approach to actually
going out and finding those international sponsors of the quality
of Cadbury's, or Microsoft, those international players, as well
as what we had in the beginning, which were local sponsors. So
I think the team did a good job. The thing that would have helped
is if we had been able to say earlier we had the funding in place
and it was going to be successful, that early commitment, it goes
back to one of the points the Chairman has made, because that
early commitment is crucial to the whole commercial success.
27. I suppose that, in fact, the success of
the Manchester Games will make it easier for Melbourne to get
the sponsorship?
(Mr Allen) Absolutely. I think some of the sponsors
that we had are already in discussions with Melbourne.
28. As I understand it, when the Games actually
were on, businesses and organisations were coming to you at that
point and saying "Can we be sponsors?"?
(Mr Allen) The only mistake we made was we should
have got some commission for this.
29. One other thing, (-inaudible -) apart
from the least important thing, financial outturn. There was a
real fear, was there not, in advance of the Games, that the financial
outturn would be such as to impose a huge burden on Manchester
council taxpayers, and indeed there were certain people waiting
around almost hoping that that would happen. In the end, that
did not happen at all. To what extent was that due to the commitment
that Gordon Brown made, not just simply for the opening and closing
ceremonies, that was very important, but the financial underpinning
of the Games by the national Government?
(Mr Allen) I think that was crucial to the overall
success of the Games. Because with that underpinning it allowed
us to be more confident with our sponsors, and it allowed us to
put in place a policy that had sort of full stadium with fair
prices. That ability to know that you had that then allowed us
to have policies that I think ensured that the Games were financially
successful. And, David, I do not know whether you want to comment
further on the financial side, in terms of the overall position.
(Mr Leather) I think we adopted a very robust financial
management process prior to and during the Games, and in fact
the contingencies monies that committed £9.3 million out
of the £25 million, that commitment was all made prior to
the Games, not because we were experiencing problems or because
costs were running out of control but because we had made decisions
to improve service levels in areas like the athletes' village
and transport and security. And actually during the Games we managed
to come in under budget on the majority of expenditure headings,
so it was a good result overall.
Rosemary McKenna
30. I want to congratulate you as well, because
it was fantastic, and I am very glad you learned the lessons of
the Edinburgh Games. I was also in at the Victoria Games, which
were extremely successful, and I think that was where the lessons
of the volunteers came from, because they were superb. So it was
excellent. I just wanted to ask Mr Allen one thing, and that is,
have the Scottish Executive been in touch with you to give them
any assistance in their joint bid with Ireland for the Football
World Cup, sorry, the European?
(Mr Allen) Actually I met the First Minister, who
came to the Games, and they were very keen to learn lessons, so
there have been people from the Executive who actually have talked
to the organisers, in terms of lessons to be learned. And we were
very open, in terms of, like the volunteers, some of the key lessons
we have learned, in sharing that, and we have actually got quite
a detailed pack that can help people, but also we have got several
people in place that we have encouraged them to talk to.
Rosemary McKenna: That is excellent.
I am very pleased to hear that. Thank you.
Mr Doran
31. Will you be charging a commission for this?
(Mr Allen) You have given me an idea.
Chairman: I would like to thank you very
much. I think that one symbol of the success of the Games is the
absence of frantic press coverage here today. Whenever we do anything
about Wembley we cannot provide enough room on the press table.
And it may well be that even the Manchester Evening News, which
participated very much, will report our report when we publish
it. Thank you very much indeed, and once again congratulations.
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