Madrid believes major sports events can help propel Spanish economic recovery
For centuries, economists and analysts have debated the best way to fix a financial crisis. Hosting major sports events may not feature in the textbooks, but in Madrid that is a strategy being championed to stimulate growth.
There is no hiding from Spain’s economic woes - European Union aid has been requested, banks have been downgraded and the unemployment rate is high, albeit the number is slowly diminishing.
A glance through the Spanish financial newspapers makes for grim reading but, if it was the decline in the construction industry which contributed significantly to the country’s economic downfall, ironically it is planned infrastructure that is now giving sports officials in the capital confidence that the International Olympic Committee and sports federations will ignore the doom-mongers.
The IOC executive board’s decision to shortlist Madrid for the 2020 Olympic Games, along with Istanbul and Tokyo, was questioned in many quarters, in part because of the huge costs traditionally associated with staging the event.
An IOC working group report said of Madrid’s bid: “There are a number of competition and noncompetition venues to be built and given the current financial climate in Spain, the delivery of these may prove challenging, as may finding partners to support the organising committee budget.”
It added that “careful attention” needs to be paid to the country’s economic outlook but noted that a well-developed general infrastructure and the high percentage of venues already in existence “helps to mitigate risk.”
Madrid has already failed to land the 2012 and 2016 Olympics but bid officials insist that, far from being at risk from the financial crisis, the new campaign is a “catalyst for economic development” in Spain, and that it has full support from all levels of government.
With a view to success, Madrid mayor Ana Botella said: “The returns will be incalculable. Winning the games would provide a great return in terms of jobs and for the image of the city internationally.”
One of the assertions in the Madrid dossier is that all of the city’s sub-venues are connected by the AVE high-speed train service. There are 36 sports venues named, 27 of which are already built, and of which only four need further work. Of the nine proposed new venues, one is in the planning stage, six will be permanent venues and two will be temporary.
The 65,000-capacity Olympic Stadium, which will become the new home of top-tier La Liga soccer club and reigning Europa League champions Atletico Madrid, and the 16,500-capacity Aquatic Centre are well on the way to completion.
The bid has not ruled out two of the planned new venues – for field hockey and volleyball – being scrapped in favour of using existing facilities should
economic factors dictate cutbacks. However, there is already relatively little work required to stage an Olympics, while the existing venues are all well-versed in the demands of staging major sports events.
The 85,000-capacity Santiago Bernabeu, the iconic home of top soccer club Real Madrid, may be the jewel in the city’s sporting crown, but, under the radar, the Caja Magica and the Palacio de Deportes are also world-class, in-demand facilities.
The Caja Magica is home to tennis’ Mutua Madrid Open, a combined annual top-tier men’s ATP World Tour Masters 1000 and women’s WTA Premier tournament, which has fast become one of the mustattend events for the world’s top players. The main court has a capacity of 12,500.
The Madrid Open, held in May, contributes around € 100 million ($125 million) a year to the local economy, evidence, noted Gerard Tsobanian, president and chief executive of the tournament, of the “value of sport.” He added: “The final is shown in 180 counties and that gives a lot of visibility to the city. It is certainly something positive for Madrid.
“In 2002 when the tournament moved here [from Stuttgart in Germany], I talked with the vice mayor of Madrid and the idea was to promote Madrid as an Olympic candidate for 2012, to show the world that this city is ready and capable of staging an international event broadcast all over the world.”
The IOC will decide on the host city for the 2020 Olympics in September 2013, meaning that next year’s Madrid Open will take on increased significance, according to Tsobanian. He said: “It will be important for the city to showcase the tournament better. It will influence the media to talk about the city better, and maybe indirectly the IOC to have a positive opinion about Madrid.
“The Olympics would be something fantastic for the city. We saw what happened to Barcelona [in 1992], it matured and became something. Madrid still has so much potential, it is the capital, we should not forget. On a cultural and culinary level it is there, but I think people do not class it as an important European city like Paris or London and I think the Olympic Games will help to showcase it as a modern, cosmopolitan city. And of course on the economic side, it will certainly help Spain.”
The Caja Magica has staged Real Madrid basketball games when the team competes in Euroleague Basketball, the sport’s top European clubs competition. However, the team’s domestic games are played at the 14,500-seat Palacio de Deportes, a multi-purpose venue that is slated to stage taekwondo and judo at the 2020 Olympics if Madrid is awarded the games.
The venue has recently hosted world championships in badminton and taekwondo, and previously staged the European Athletics Indoor Championships in 2004. It will be the focal point of
“The capital has demonstrated its competence countless times, but this gives us the chance to remind the world once again of its calibre as a host for major sporting events”.
basketball’s 2014 FIBA Men’s World Cup in Spain, which won the right to host the event ahead of China and Italy.
Group games in the 16-day tournament will be played in Bilbao, Grand Canaria, Sevilla, and Granada, with the quarter-finals and semi-finals in Barcelona and Madrid, and the final in the capital itself.
Miguel de la Villa, managing director of the organising committee for the tournament, said: “The [basketball] World Cup is a big event, the next level down only from the Olympic Games or the Fifa World Cup. It is one of the biggest sporting events in the world that you can be asked to stage.
“We have an organisational budget of € 25 million to € 30 million, and we have already got that covered. The World Cup is an important income-driver, whether it is through ticket sales, merchandising or licensing. A World Cup isn’t just about the 16 days of competition; it is a three-to-four-year buildup process that gives you more time to activate promotional programmes.”
De la Villa claimed that despite the muchpublicised financial crisis in Spain, FIBA, the international basketball federation, has no reservations over the country’s preparations for the tournament. He said: “FIBA knows that we have enough venues, strong enough corporate support and the experience in organising top basketball events. They have no concerns.”
The Spanish government has categorised the 2014 FIBA World Cup as a ‘Special Interest Event’, offering companies that decide to sponsor the tournament certain tax breaks. The Madrid 2020 bid has been given the same regulatory status, an important factor considering that the IOC working group report warned of the potential difficulties in attracting partners in the current economic climate.
De la Villa said of the tax concessions: “This was a strong point for us, and will be for Madrid . It is now easier for us to get money for the tournament and hit certain targets.”
De la Villa, the sports director of Madrid’s unsuccessful bid to stage the 2012 Olympic Games, believes the city has made substantial progress in the last decade, saying: “This  Olympic project is a strong, realistic project with a lot of venues already in place. There is less investment needed than many cities that have bid for, or even hosted, the Olympic Games before.
“We started the 2012 project in 2002. Ten years on, a lot has changed in Madrid. We have a new big airport terminal, a new road system, and more top class venues. Top federations like FIBA and the IHF [International Handball Federation] have trusted us with their top properties because they know they can rely on us to deliver.”
Spain was awarded hosting rights to the 2013 Men’s World Handball Championships in October 2010, after Norway pulled out of the contest. The event is scheduled for January 11 to 27, with the Palacio de Deportes and the 12,000-seat Madrid Arena, which staged the Madrid Open from 2002 to 2008 until it was switched to the Caja Magica, both set to stage games.
Miguel Sanz, of the Madrid Visitors & Convention Bureau, said the media frenzy associated with sport makes it a key part of the organisation’s promotional activities. He explained: “Television audiences, online viewing, social networks and coverage in traditional media are so huge [in sport] that there simply isn’t a better way to promote our brand.
“What’s more, the prestige of successfully organising an event lasts far into the future. It’s easy to recall the names of the cities that have hosted memorable Olympic Games or an exciting [soccer] World Cup. These occasions generate unprecedented levels of publicity as they reach such a wide range of audiences and all sorts of people.”
Sanz concluded: “The capital has demonstrated its competence countless times, but this gives us the chance to remind the world once again of its calibre as a host for major sporting events.”
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The Caja Magica in Madrid