Issue 1, 2014. February-March

   

A SPORTING BUSINESS: GEORGIA BETS ON BIG SPORTS TO BOLSTER LOCAL ECONOMIES

From building hotels to encouraging young people to volunteer, Georgian officials hope the slew of large sporting events slated for venues across the country over the next three years to be a boost for cities and communities country wide.

Monica Ellena

Sochi's stellar costs showed that throwing the world's biggest party is an expensive business.

Estimates put the total cost at $51 billion against the $12 billion that President Vladimir Putin pledged when Russia was awarded the Games in 2007, making the 2014 Winter Olympics the most expensive in history.

Although the Olympics Games are not on Georgia's horizon, in the next three years the country will host a series of major sport events, including the European Youth Olympic Festival (EYOF) and the UEFA Super Cup in 2015, the Karate European Cup in 2016 and the Handball Under 19 World Championship in 2017.

"Sport has a long tradition in Georgia, we can boast thirty-four Olympic champions and medals won in over 25 sports," explains Tamaz Tevzadze, Deputy Minister of Sport and Youth Affairs and member of the Georgian Olympic Committee since 1993. "The upcoming events signal the strong political will to make Georgia a sport hub for the South Caucasus."

In 2010, Tbilisi outbid the Czech city of Brno to get the rights of hosting the EYOF, an event reserved to athletes between 14 and 18 years coming from 49 countries. Dubbed as the Youth Olympics, the festival features nine disciplines: athletics, basketball, cycling, gymnastics, handball, judo, swimming, tennis and volleyball.

Aleksi Akhvlediani, chairman of the organizing committee, labels the event "the biggest sport event in the history of independent Georgia," that will "increase communication, global contacts, and international involvement. The success of the games will guarantee our country future massive sport competitions."

The price tag is estimated is set at EUR 27,4 million (GEL65 million) which, according to George Ivanishvili, EYOF's Head of International Relations, will cover the upgrading or building of the needed infrastructure. The cost does not include the Olympic Village, adds Ivanishvili, currently under construction on the outskirt of Tbilisi.

"The Chinese investor Hualing Industry and Trade is investing about $150 million in the village, employing up to 3,000 people. The venue will be able to allocate up to 3,800 people."

According to Tbilisi City Hall, the event will require twelve sport facilities, four of which already exist and will be renovated, while eight will be built from scratch. The latter include tennis courts, the swimming arena, and the volleyball hall. Merab Chikobava, Head of Sport services at Tbilisi City Hall, says that the municipality allocated GEL50 million ($28 million) for 2014 to cover all the expenses related to infrastructural upgrade or build, and is expecting additional GEL15 million ($8.5 million) from the central government.

"It is a lot of money, but worth it," admits the former rower who still dreams of a Georgian rowing team. "Relevant sport tournaments tend to be assigned to developed and rich countries, Georgia wants to get into the international system. The investments are not one-off, they aim at bringing Georgian sport facilities in line with international standards for future events. They also show a clear commitment to develop a sport culture."

Importantly, Tbilisi will not take it all. The handball world championship for example will be hosted in six cities across the country: Batumi, Kutaisi, Poti, Rustavi, Telavi, and the capital.

"Standard-sized sport halls will be built in each city, they will provide a key reference for sport once the event will be over," adds Tevzazde.

It is expensive, why bother?

Indeed the expected 7,000 people, between athletes and officials, for the EYOF and a similar number for the UEFA Super Cup will place Tbilisi under a spotlight. And under a lot of pressure to look good.

"Countries bid for the right to host sporting mega-events for many reasons," explains Simon Chadwick, founder and director of the Centre for the International Business of Sport at Coventry University's Business School in the UK. "The assumption is that such events provide an growth boost, stimulating economic activity in areas ranging from construction through to tourism," In his view these events also serve "the nation's branding purposes, building soft-power influence in global sport, and stimulating participation in sport."

Still, the price tag is high. Chadwick, who has worked as a consultant with organizations the like of UEFA and the Qatar Olympic Committee, adds that "creating the facilities necessary for hosting such events or addressing issues such as security are indeed a cost."

In December 2012, UEFA - Union of European Football Associations, Europe's administrative body for association football - made a radical move after it received only three bids to host the 24-team European championship in 2020, instead deciding to stage the contest in 13 cities around the continent, each hosting three or four games. While UEFA President, Michel Platini has said that this multi-format is a "romantic" one-off event to celebrate the 60th birthday of the European Championship competition, there are financial advantages as even smaller countries usually have one stadium where they can stage two or three games.

Tevzadze, whose Ministry has a 2014 budget of GEL39 million ($22 million) for sport, 12 of which only for events, thinks mega sport events are worth every penny.

"The return is placing Georgia on the world map not only for sport but also tourism. It is an investment for the future," he said.

Is Georgia ready?

State of the art sport venues are not enough. Big sport events require adequate hospitality infrastructure. Talks about expanding Tbilisi airport have been abandoned as Kutaisi International Airport is taking off.

"Studies show that Tbilisi's existing airport is enough, especially teamed-up with the Kutaisi's which is handling a good inflow of visitors from Eastern Europe," noted Chikobava.

The shortage of middle-range hotels is another challenge the municipality is trying to tackle. According to Sevdia Ugrekhelidze, Acting Mayor, the renovation of Old Tbilisi and Aghmashenebeli will allow families to rent rooms and set up small hostels. The plan though is to attract investors interested in opening 2 and 3 stars hotels.

"Pending budget approval, we also envisioned loans at low interest rates, around 6 percent, where the city hall will act as guarantee for the bank."

One key element for the success of sport events is, increasingly, the role of volunteers. The 2006 Commonwealth Games in Melbourne formally recognizes the contribution of what the committee called its "Unsung Heroes" by listing all 14,500 of them by name. The Youth Olympics would need about 2,000 volunteers.
"Volunteers are vital for the delivery of large scale sport events," adds Ivanishvili. "At the moment that looks like our biggest challenge, as volunteering is not that widespread in Georgia. In March we'll travel to Poland which is hosting the World Indoor Athletics Championship to see how the committee is managing the role of volunteers and learn from it."