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regarding the 2010 Olympics
in British Columbia, Canada

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Buying INK by the Gigabyte

Steve Matheson
Senior V.P. Venue Development VANOC

In another era one's power was directly proportional to the number of barrels of ink one purchased. Those days are gone. Independent publishing has usurped the power of newspaper tycoons. Granted, news tycoons still have a hold on the gullible and naïve, but the smart-set have access to information that in the past would have been kicked under a boardroom table or thrown away with the used ribbon of an editor's Corona.

If you want to make smart business decisions you have to perform due diligence, which means looking in wastebaskets and under rugs. Smart people know that just like newspapers, television and radio, some of the information you see online also isn't true. Fortunately, online, suspect information can be tossed out with the click of a delete button. Sorting the wheat from the chaff has always been a coveted business skill, but today it is even more so when you take into account all the misinformation being distributed by large companies, governments and organizations. Knowing what to believe is the new-era Holy Grail.

Steve Matheson Senior V.P. Venue Development VANOC spoke in December 2004 at an NAIOP breakfast at the Hyatt on Burrard. It was the last meeting of the year for the National Association of Industrial Office Properties Vancouver Chapter and it was obvious from the moment Mr. Matheson entered the meeting area outside the ballroom that he had many friends in the audience. Everyone who shook his hand welcomed him with friendliness and genuine warmth. He seems to be a well respected and revered member of the good old boys club. Matheson last served as Senior V.P. for Dominion Construction. He helped build General Motors Place, Richmond City Hall and Burnaby Mountain School. As I watched him make his way through the crowd into the ballroom I wondered how many of those in the audience would still think of him the same way after the reality of the Olympic machine shifts into gear.

One of the hallmarks of the Olympics is that it eats its young. The Olympics operate on a culture of volunteerism that extends to every nuance of the specter. The Games could not possibly happen if they had to pay their way on any level. Most companies don't realize until it's too late that its not uncommon for Sponsors to also act as their own contractors, and even their own suppliers, therein creating a circuitous conflict of interest that would never fly in the real world. An even less-obvious, but truly contentious part of the relationship is that local Olympic committees and Sponsors also often work hand in hand to define and set the conventions of the tendering process and delivery of projects. According to others, it's also happened where the tendering processes was set up so that the in-house contractors receive the more lucrative and easiest to deliver segments of the project, and that everything else is pawned off on their competitors who have no idea that they will fight a perilous uphill battle. Basically it amounts to a Sponsor buying products and services from itself, which effectively shuts out other local businesses. All inclusive you say Mr. Furlong? We'll see.

Once Matheson's friends become aware of this convoluted ethical maze and how they fit into it things could take a sharp right turn on the genuine warmth front. You can only have so many best friends, and if anyone in the room that morning thought they were a shoe-in for Olympic projects they are in for a rude awakening. Bell Canada verses Telus is a good case in point. Money talks as Telus learned when Bell outbid them by $65 million for the telecommunications sponsorship for 2010. But already Telus has embarked on a subtle "ambush-like marketing" campaign that endeavors to align their company with the Games through the use of a toucan bird with an Olympic-style gold medal hanging from its beak, and a slogan that promises to turn paper into gold. The pitch is that if a company invests in the Telus package a portion of the proceeds go to amateur sport. Smooth. The medal hanging from the toucan's beak looks like a Gold Medal from any sporting competition, but in this Olympic sensitive market the implied association gets through loud and clear.

Matheson's NAIOP presentation was pretty reserved compared to VANOC CEO John Furlong's usual Rah Rah Rah cheer, but all in all, it too didn't amount to more than a superficial rehash of information most people already know. Matheson started off with the requisite 2010 video to get us in the mood and then went on to recite statistics in a dry, but very professional engineering demeanor. For what it's worth, I appreciate his matter-of-fact delivery more than I do Furlong's minor league coach-style exuberance. Matheson is believable.

As I listened to him though I couldn't help wonder what Matheson was really thinking when he told us that in the last few months he's come to realize that the Olympic machine is much more complex than he first imagined. What sparked my wonderment was the recent and unexpected departure of Jeff Chan, one of Matheson's counterparts from the VANOC executive dream team. I suspect that Mr. Chan, V.P. of HR also realized that the Olympic machine isn't what he thought it would be and it didn't take him long to rethink his position. The public still doesn't know why he resigned, but considering his new found realization of the complexity of the challenge a number of reasons could be possible, like not getting cooperation from VANOC or a budget that he thought inadequate to do the HR job properly. One thing we do know, he wasn't fired. He left of his own volition only five months into his mandate.

Matheson still has me wondering how he will maintain his good relationships with the business people at the NAIOP considering that Olympic organizations have a history of burning bridges. The Olympics is a cult that demands unconditional loyalty. You are either with them or against them. There is no middle ground and quite often companies find that they have to contribute more than they bargained for. It's not unheard of for a Sponsor or contractor to hound Olympic organizations for many, many months to get them to execute contracts while nervous contractors invest hundreds of thousands of their own dollars. Once you start on this slippery slope it's extremely hard to back out for fear of destroying your public credibility, not to mention losing your investment. Jeff Chan I'm sure knew it was now or never if he wanted keep his sterling reputation intact. Sponsors and contractors rarely have this foresight.


*Ed. Note: We invested over three years and a six-figure budget researching Olympic organization relationships with sponsors, contractors, suppliers, partners, etc. The results surprised us too -- mouseover below





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