Welcome to the corp-Olympic Games

COMMENT

While the company contracted to provide security for the London 2012 Olympics has admitted it cannot live up to its promise, one group of guards are fanning out across Britain with the power to issue fines of up to £20,000.

They are the brand police who are looking out for the intellectual property of the Olympics major corporate “partners”.
In non-business speak we know these partners as sponsors. In order to protect the rights of these sponsors the 286, uniformed, brand police will visit shops, pubs and other businesses all over the country to ensure that nobody is using any of the words which now, temporarily at least, belong to the multinational corporations. Among these words are ‘gold’, ‘silver’ ‘bronze’, ‘London’, ‘sponsors’ and bafflingly, ‘summer’.
If businesses are found to be using these words to promote themselves or advertising the fact that they are showing the Games on a board featuring a product other than the partner organisations, they can expect a knock on the door and a dip in their bank account.
Anyone unsure as to whether this can actually be serious should read about the fact that 800 retailers at 40 Olympic sites were recently told they cannot serve chips because it may infringe on McDonalds exclusive rights to serve them at the Games.
According to the Independent, “£1.4bn of the Games’ £11.4bn budget comes from private sector sponsors. The International Olympic Committee’s 11 global partners, including Coca-Cola, Visa and Proctor & Gamble, are contributing £700m while £700m comes from London 2012 partners, including Adidas, BT, EDF, and Lloyds TSB.”
As well as the shiny, happy, feel-good benefits of being associated with a world event like the Olympics, these brands are enjoying some very special benefits which garner much less media coverage.
One of the quieter requirements of hosting a modern monolithic sporting event is the implementation of a number of new tax laws in the host country. If you seek the Midas touch of FIFA or the International Olympic Committee you must be ready to convince them of your worthiness as a host by ensuring that the taxman won’t get his hands on the profits of the Games’ “partner organisations”.
For this reason in London 2012 the “Corporate Commercial Delivery Partners” will pay not a penny of tax on the money they earn. Given that McDonalds has a monopoly on selling branded food and Visa a monopoly on tickets sales, the savings for them will be potentially massive. The legislation also extends to all foreign nationals working at the Games be they journalists, cameramen, athletes, judges or anything else.   
In terms of loss to the British exchequer, Ethical Consumer puts the figure at £700 million lost tax revenue. This is added to the £11billion already paid out to fund parts of the project. Benefitting from this mini tax bubble will be a help to the companies but many of the Olympic partners and sponsors are already using tax havens to house their subsidiaries so will be well aware of the benefits.
The 11 “Worldwide Olympic Partners” of the International Olympic Committee have almost 200 subsidiaries registered in tax havens between them. Interestingly, seven of the 11 list Ireland as one of their tax haven bases. General Electric is a particular fan with almost 100 registered subsidiaries there. Of the seven London Olympic sponsors three have subsidiaries registered in Ireland but most seem to favour the old classic destinations such as the British Virgin Islands, the Cayman Islands and Switzerland.
The benefits to Ireland look fairly positive at the moment with a number of countries selecting Ireland for their pre-tournament training base and Irish companies have won contracts reportedly worth €250 million associated with the Games.
This is possibly partially as a result of the work of the previous government that in 2009 formed a “high-level co-ordinating group” and spent €114,000 on a consultants report to see how Ireland might benefit from the Games being held so close by in Britain.
It again highlights the fact that, in many ways, sport is the last thing on many people’s minds in the run up to the Games. The event has now become such a corporate affair with companies vying for rights and enjoying massive tax breaks, the athletes and their endeavors get lost behind the hype.
Add to this the taint of doping and other forms of cheating which tend to become an issue as the Games progress and it is difficult not to feel that the Games represent a monument to all that is wrong in the world rather than a celebration of human sportsmanship and athleticism. 
This story is not all doom and gloom however. At the time of writing one of the major corporate partners at the Games had agreed to not take advantage of the tax breaks they are entitled to. The campaign group 38 Degrees, upon learning of the tax breaks, launched an online petition calling on the companies to pay their fair share of tax during the Games and simply be content to take the profits they will still earn when the tax has been paid. Within minutes of the campaign being launched, McDonalds announced they would waive the tax break and pay their fair share.
This represents a victory on two levels. Firstly it shows the positive power of investigative journalism in shedding light on the dark places in which corporate deals and special legislation are hatched. It also speaks to people power and the fact that when people come together and stand up for what is right, even the most powerful corporations in the world will listen. It is an achievement that should be awarded a gold medal and certainly will count as one of the highlight achievements associated with this year’s London 2012 Games. Meanwhile, the campaign continues and it will be interesting to see how many other major corporations will have bowed to public pressure by the times the closing ceremony takes place.