Course: BUSINESS ECONOMICS

Professor: RUI ALPALHÃO

TThhee LLoonnddoonn 22001122

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STUDENTS FROM MSc.BA:

André Olaio, 30639

Bruna Salvado, 30696

Elodie Zeferino, 30731

Francisco Nascimento, 30766

Luís Pereira, 53072

Sónia Filipe, 30764

DDeecceemmbbeerr,, 22001111

2

Index

Page

Question 1 3

Question 2 7

Question 3 10

Conclusion – Analysis sport by sport 18

3

Question 1. What broad tradeoffs does Williamson face as he thinks about his tickets

prices?

While trying to set the proper prices for all the events of the Olympic Games 2012,

Williamson is aiming to fulfill four requirements at the same time: to maximize

the revenues, to maximize the attendance, to fill the seats with the right

people and to make the tickets affordable for the average Londoners.

The amount of tickets issued and its distribution among all the events is already

set. However it is up to Williamson to define the price for each event, and within

each event the different price tiers available.

People’s willingness to pay for a given event depends on the expectation based

on other sporting events in and around London, the global appeal for sports such

as gymnastic and swimming, the local appeal for Indoor Track Cycling, Sailing,

Athletics, Rowing and Swimming, if it is a event stage or not and if there is a

presence of a particular team or athlete who is able to make the difference.

This, said Williamson, has to evaluate all the supply requirements plus the demand

criteria in order to set the ticket prices and to deliver the best possible output.

Looking at each supply requirement, we cannot analyze it ceteris paribus once

there is a straight interdependence between each variable. All four supply

requirements are more easily achieved when Williamson just focus on the Big Four

events or in the events of beloved teams or athletes. He could set higher prices,

taking into consideration the Londoners purchase power, maximizing the

revenues, filling the seats with the right people and leading to the maximum

attendance, once the Big Four are the main attractions of the Olympic Games and

that people are willing to pay for those events. However, the more he increases the

Big Four ticket prices the more he has to increase the remaining ticket prices in

order to decrease the price differential and to avoid the unpleasantness among the

remaining sports. This is probably the biggest tradeoff he has to face, once he is

unable to successfully maximize the revenues of the whole program because he

needs to pay attention to the disparities among prices and the image transmitted

to the audiences of how the sports are valued. If he sets extremely high prices in

4

the Big Four or in the events with famous teams and athletes, he will have to also

increase the prices for the remaining sports. Once normally those sports have

much lower attendances, a price increase will make the attendance even worst,

compromising one of Williamson’s main goals, to maximize attendance. This

strategy would also difficult the local access to the tickets, violating his other goal

of making tickets affordable for the locals.

The Big Four events are expected to be responsible for 40% of the tickets

revenues. Due to the fact that 55% of the tickets purchase is expected to come from

the UK residents, the local appeal sports such as Indoor Track Cycling, Sailing,

Athletics and Rowing are also expected to have high demands and therefore the

same concerns arise.

The challenge lies, how we previously mentioned, in coming up with a price mix

that optimizes the hole picture, having however to compromise some of the

requirements in detriment of others. So Williamson has to decide which

requirements he will establish as priorities and which requirements won’t hold.

Another tradeoff arises from the fact that Londoners, who account for 30% of the

expected ticket purchases, probably are unwilling to cover the percentage of the

ticket’s price that is related with the one-day free pass in London transportation,

once they are most likely to have a monthly pass. Despite this fact, Williamson

cannot offer discounts to the locals unless he makes available those same discounts

to the remaining EU citizens. This is another tradeoff he needs to solve.

When trying to establish the ticket prices he could also use some guidance from

the previous Beijing Olympic Games adjusting merely the inflation, the different

currency and local purchase power, or he could look at the trend along the

different Olympic Games to decrease the tickets price. However, the conditions are

different and he needs to decide how he can measure those differences and turn

them into feasible prices. London is closer to Europe and therefore more

Europeans are expected so, the tastes, culture and atmosphere are dramatically

different; it is the first time that the tickets will be available through internet

(Beijing attempted to do so, but the website crashed due to the huge affluence) and

5

that will probably lead to a higher demand and last but not least, we are going

through a global crisis that limits people’s ability to afford the tickets.

All these facts lead to a huge tradeoff in whether to follow the Beijing example with

some adaptations regarding the local appeal and the previously mentioned

changes in inflation, etc. to decrease the prices so it becomes affordable during the

crisis or to increase it, once the online platform leads to an increase in demand,

and therefore, according to the economy equilibrium, when the demand highly

exceeds the supply, the equilibrium changes and the price increases.

Football is loved in England and in Europe and it is expected to contribute with

10% of the ticket revenue. According to the available information, 75% of those

who will purchase tickets are either from the UK or the European Union and the

data claims that football is one of the most beloved sports among the Europeans

so, in an optimistic vision, 75% of the ones who purchase the tickets would show

interest in watching the games. However, this vision is purely unrealistic once

some of the games are of women football, with a low rate of interest for the

majority of the viewers and that the football interest is closely related with the

team playing and with the players. Once the regulations forbidden players over 23

years old, the majority of the football idols won’t be playing and therefore it is

harder to set the price because it has nothing to do with a classic match as the ones

from Manchester, West Ham etc, it stays far behind when in comparison with the

European Cup Football but it is also quite different from the England Football

Friendly games and the England Under-21 Football games.

As we already mentioned the main problem is that in order to set high prices in the

Big Four, Williamson also needs to come up with higher prices for the remaining

sports that already suffer from the lack of interest among the audience. Well let’s

see how this can come out. These same remaining sports are expected to generate

the remaining 50% of ticket revenues and include the local appeal sports, so, the

task is mildly facilitated by these sports that attract UK citizens. If he decides to go

for high prices he will maximize the revenue of the Big Four but he will sell few

tickets for the remaining sports, minimize its tickets revenues, present lousy

audiences and discourage the teams or athletes that are performing. As he states,

6

an attendance lower than 65% is a disaster so this high price strategy can turn into

a dead end. So if he looks to the other way around, and sets a lower price, he will

lead to the increase of demand and offer affordable prices. However, there is also a

huge gap in this line of thinking. Besides decreasing the revenue, if the tickets

become cheap, the probability of purchasing a ticket and after not attending the

events increases and he is aiming to achieve 85% of the available seats. In addition

to that, it will harm the image of certain sports and labels them as cheap,

unworthy, and the price will be perceived as a last attempt to bring audience. This

would lead to major problems with the sports foundations and discourage the

athletes to perform.

One solution adopted in the past Olympic Games involved the practice of higher

prices, that led to a small audience and that was “solved” with the placement of

volunteers along the benches. However, the few real fans were able to feel the lack

of connection and knowledge regarding the sport and instead of improving the

situation it compromised the image and credibility of the Olympic Games.

However, this is another possibility for Williamson to consider.

In the end, the outcomes he has to evaluate are: to exceed the ticket revenue

targets by $50 Million having 70% of attendance or settling with less $50 Million

than the established goal in terms of revenue by having 90% of attendance and, to

evaluate if his current inclination to one of the possible outcomes will hold within

the next eighteen months.

7

Question 2. On what dimensions does he need to optimize? Why? Which are less

important?

In the process of deciding what the optimal price is, we need to consider four

different dimensions and how they relate with the decisions needed to make. It is

crucial during this report, to not forget the motto of this next Olympic Games, in

London: “Everybody’s Games”. We will try to assure that this goal will be fulfilled.

The Dimensions

We identified the dimensions that should be taken into account by Paul Williamson

and they are:

Maximizing the Revenues – Ticketing is an important part of the Games

bottom line and should be taken into account when making the price of the events,

do we want higher prices to every sport distributed in an even way or prices set

according to the success of the sports?

Maximizing the Attendance – There is a high reputation risk involved in the

Olympic Games. As we saw from Beijing’s Games in 2008, having half full arenas

are bad for the image of the Games and the city, since they are both directly

related. Giving importance to this dimension means that measures should be taken

to keep the arenas full in all events, not just the high appeal ones.

Fill Seats with Right People – The Olympic Games atmosphere was always a

topic of great concern for the organizing cities. Having the stadiums filled with

people that do not understand the sport that is happening, gives a bad image of the

Games because the public will not interact with the event and that will give the

general audience (TV viewers) the idea that there is no emotional connection.

Affordable Tickets to Average Londoners – Residents of London projected

attendance on the Olympic Games is about 30% of the full 7.9 Million tickets

available and another 25% are from other UK residents outside London. This

makes the decision process of Ticketing very important at a regional level. What

this means is that more than 50% of all the attendance is from UK itself and price

should reflect the reality of the country. It is the intention of the organization of the

Olympic Games to make the motto of this year as “Everybody’s Games”, and for

that to be accomplished, the price for Londoners is a very important issue.

8

What are the most important dimensions?

For the 2012 London Olympic Games to be a success, all of the above dimensions

have an important role in the decision making of the price. If all of them are

balanced, we can say that the Games were a success. Even though this is true, we

should consider some with more priority than others.

Maximizing Revenues must be considered at first, in the process of ticketing.

Ticket revenues are a big part of the total profit made from the Olympic Games,

and as such, Paul Williamson cannot forget that making money is one of his main

objectives.

At second place, we should not forget Maximizing Attendance, because is a big

part of the Ticketing process. Empty seats are bad for the reputation of the

organizing city and country and there should be measures taken to ensure that all

events have a high attendance level. However, if they certify that there will be

tickets affordable for everybody, the problem of maximizing attendance is solved,

because tickets will be easily sold. And so, the aim of achieving at least 65% of

attendance will be fulfilled.

The importance of Filling Seats with the Right People comes next in the decision

making process of Ticketing. Now that one of the biggest aims is Games create

revenues and, therefore, allow to make sure that there will have great levels of

attendance, Paul Williamson needs to make sure that the right people attend the

events. It is important to involve the associations of the sports with less appeal as

they are directly interested in raising awareness to the sports they support, mostly

because there is expectation from other events and the public is waiting an event

with quality.

The LOCOG wants the Games to be known as “Everybody’s Games” and as so,

having Affordable Tickets to Average Londoners rises as an important issue to

take into account, but not the most necessary to be optimized. Price should reflect

the organization’s effort to make tickets available to the average person and so this

dimension needs to be carefully handled as well. Nevertheless, it is known that the

9

price for the Big Four tickets have to be, or tend to be, higher than the less popular

sports.

We are sure that if all these dimensions are taken into account in the decision of

Ticketing, although ones will have more importance than others, then the Games

have all the conditions to be a success.

Furthermore, to become more efficient the analysis of those dimensions, in order

to find which must be optimized, we think that we can be better divide our analysis

in three parts:

- “Big Four” events: swimming, artistic gymnastics, athletics and ceremonies

- Football matches

- Remaining games: local appeal, games with less attendance

Type of event

Dimensions

to be optimized

BIG FOUR Football matches Remaining Sports

Maximizing revenues 1st 3st 4rd

Maximizing

Attendance 3th 1rd 1st

Filling Seats with the

Right People 2nd 4th 3th

Affordable Tickets to

Average Londoners 4rd 2nd 2nd

10

Question 3. What would you do if you were Paul Williamson?

In order to determine the possible price that the London 2012 Olympic Games’

tickets should have, we started by analyzing the price of the tickets of the previous

editions, that are represented in the table in the next table.

We organized the events according to its relevance (which means that first we

present “Big Four” events and after, track cycling and table tennis) and divided it

into the main tiers that compose each one. After doing that, we transformed the

price that was current at the time of the Olympic Games (2000, 2004 and 2008 for

Sydney, Athens and Beijing, respectively) according to the inflation rate, what

means the cost of the Olympic Games’ ticket if it was bought today (in US dollars).

Then we decided to analyze the difference between the higher and the lower tiers

to assess its accessibility towards people from different social segments.

Now, analyzing the values that are presented in the referred table, we can see

that there is a larger difference on the countries where there are a major number

of medals won in that same sport. The only exception occurs within Indoor Track

Cycling, since Australia is the country (from this sample of three countries) that

has a larger number of medals won. Having this said, the number of medals won by

Great Britain should be a factor to be paid special attention while setting the

ticket’s price.

We can also notice that the event where we can find a greater difference

between tiers is the ceremonies, one of “The Big Four” events, with the exception

of Athens in 2004, which registered a greater difference on athletics. Regarding the

Ceremonies, we can also see that this event is the one with the higher ticket prices,

what will influence the price we will define for The London 2012 Olympic Games.

Finally, we can see that there are events in Sidney and Athens where it doesn’t

exist the lower tiers, like ceremonies and table tennis. However, Beijing decided to

create those tiers to show that those were “everybody’s games”, what had a

terrible result in terms of revenues and also in terms of attendance, like what was

previously said in this coursework.

It is also important to inform that we did a research about the prices that are

already settled for the 2012 Olympic Games, so that we could assess the

differences between this season and previous ones.

11

Sydney 2000 Athens 2004 Beijing 2008

Event/

Sport Event Stage

Price

Tier

Ticket

Price

With Inflation

(31,5%) Difference

Ticket

Price

With Inflation

(19,9%) Difference

Ticket

Price

With Inflation

(5,2%) Difference Difference

Opening

Ceremony

Tier 1 869 1142,62

13,2 13,2

597 715,58

9,5 9,5

627 659,38

25,1 25,1

Tier 2 619 813,91 472 565,75 376 395,42

Tier 3 318 418,13 220 263,7 188 197,71

Tier 4 66 86,78 63 75,51 100 105,16

Tier 5 - - - - 25 26,29

Aquatics -

Swimming

Preliminaries

Tier 1 88 115,71

4

13,0

44 52,74

2,3

6,6

38 39,96

2,9

5,8

Tier 2 50 65,74 28 33,56 25 26,29

Tier 3 22 28,93 19 22,77 13 13,67

Prelim/Finals

Tier 1 286 376,05

4,8

126 151,03

4,1

75 78,87

3,9 Tier 2 142 186,71 63 75,51 38 39,96

Tier 3 60 78,89 31 37,16 19 19,98

Athletics

Preliminaries

Tier 1 53 69,69

2,4

13,0

16 19,18

2,7

31,5

25 26,29

4,2

16,7

Tier 2 41 53,91 9 10,79 13 13,67

Tier 3 22 28,93 6 7,19 6 6,31

Prelim/Finals

Tier 1 104 136,75

2,5

57 68,32

2,3

100 105,16

4,0 Tier 2 79 103,87 44 52,74 50 52,58

Tier 3 41 53,91 25 29,97 25 26,29

Finals Tier 1 286 376,05

4,8 189 226,54

4,0 100 105,16

4,0 Tier 2 179 235,36 94 112,67 50 52,58

12

Tier 3 60 78,89 47 56,34 25 26,29

Gymnastics

- Artistic

Preliminaries Tier 1 88 115,71

1,7

4,2

41 49,14 1,9

5,7

13 13,67 2,2

6,3 Tier 2 53 69,69 22 26,37 6 6,31

Prelim/Finals Tier 1 223 293,22

1,2 126 151,03

1,68

38 39,96 2,0

Tier 2 179 235,36 75 89,9 19 19,98

Track

Cycling

Preliminaries Tier 1 41 53,91 - 1,6

35 41,95 -

1

6 6,31 - 2,2

Prelim/Finals Tier 1 66 86,78 - 35 41,95 - 13 13,67 -

Table

tennis

Preliminaries Tier 1 25 32,87

-

1,9

6 7,19 -

3,2

13 13,67 2,2

10,5

Tier 2 - - - - 6 6,31

Quarter Finals

& Semi-finals

Tier 1 35 46,02 -

9 10,79 -

38 39,96 2,0

Tier 2 - - - - 19 19,98

Finals Tier 1 47 61,8

- 19 22,77

- 63 66,25

2,5 Tier 2 - - - - 25 26,29

Given the aforementioned points, we now move to the actual pricing for the

London’s 2012 Olympic Games.

We follow a two-step methodology. In the first step, we define for each event an

average price and for that, we consider only our two main objectives: maximizing revenue

while not compromising attendance. In the second step, we define the number of tiers and

specify the upper and lower tiers prices, considering two other objectives: getting the right

people and giving average Londoners and the local community around the Olympic park

the opportunity to watch the games.

For each step we present a table that resumes our analysis and recommendation.

First, for the average prices (in USD, British Pounds and, still, Euros).

SPORTS Avg. tickets

available per session

High revenue OPPORTUNITY

Low attendance RISK

Outcome

Ceremonies 60.000 YES(+++) NO

The opening and closing ceremonies are the events with higher prices in previous years which demonstrate a really high revenue opportunity and low attendance risk because it is the most successful event of the Olympic Games.

Swimming 10.882 YES(+++) NO

Swimming, as one of the Big Four events, is not a problem in terms of revenue, since it is really successful in general and also because it is a sport where Britain has won some medals. This helps lower the attendance risk.

Athletics 37.800 YES(+++) SOME(-)

Athletics is the third major winning sport in Great Britain and, therefore, there is a high revenue opportunity. However, due to the high number of seats available, there is some risk of low attendance.

Artistic gymnastics

12.368 YES(+++) NO Artistic gymnastics is other of the "Big Four" events, which assures a high revenue opportunity. Since it has so few seats and great importance, there is not the risk of low attendance.

Track cycling 3.111 YES(++) SOME(-)

Track cycling is a sport with broad local appeal (namely by the high number of medals won by Great Britain in this sport), which leads to a high revenue opportunity. However, due to its low global appeal there is still the risk of low attendance.

Table tennis 2.656 NO YES(+)

Since table tennis has both low local and global appeal, there is not a high revenue opportunity and a low attendance risk, despite the few seats available.

Football 47.024 YES(+) YES

For football there is a low attendance risk for small teams, under-23 and women and also due to Euro ’12 competition. However, there is high revenue opportunity, due to the number of seats and the interest that Europeans have on football.

Other - SOME(+/-) YES The category "others" include several sports. Therefore there is the low attendance risk but also some revenue opportunity due to the diversity of sports offered

13

After presenting a table that mirrors the relation between the different sports and our two main objectives, it is now time to show the

average price for ticket that we propose, according to the conclusion we reached previously.

SPORTS % Avg.

attendance1 Total

tickets # Expected attendance

Avg. price ($)2

Avg. price (£)

Avg. price (€)

Total revenue % within total

revenues

Ceremonies 100% 120.000 120.000 720 $ 462 £ 546 € 86.400.000 $ 15,9%

Swimming 97% 185.000 179.450 265 $ 170 £ 201 € 46.127.623 $ 8,5%

Athletics 82% 756.000 619.920 285 $ 183 £ 216 € 144.875.304 $ 26,7%

Artistic gymnastics

97% 235.000 227.950 220 $ 141 £ 167 € 48.644.530 $ 9,0%

Track cycling 92% 28.000 25.760 205 $ 132 £ 156 € 4.858.336 $ 0,9%

Table tennis 71% 85.000 60.350 80 $ 51 £ 61 € 3.427.880 $ 0,6%

Football 71% 1.975.000 1.402.250 45 $ 29 £ 34 € 44.801.888 $ 8,2%

Other 80% 4.577.000 3.661.600 56 $ 36 £ 42 € 164.039.680 $ 30,2%

TOTALS 80% 7.961.000 6.297.280 86,3 $ 55 £ 73 € 543.175.240 $ 100%

1 Here, we expect always an extra 1-2% of higher attendance due the implementation of a yield management systems. To define either 1 or 2%, for each sport, we

took into consideration i) the popularity of the sport, and ii) the amount of tickets available.

2 We mean by average price the weighted average of the different tiers, preliminaries and finals. That is, we present a number that represents those calculations. We

did not actually made these as we only considered what would be the top and lower tier (see the next table), assigned a weight of available tickets (0,3 and 0,2), and 0,5 to the remaining tiers/tickets available. For these intermediate tiers (1 or more) we assigned also an average price. Thus, this method assure us a clean definition of price, that is sensitive to different factors

14

The next table will present the number of tiers and its maximum and minimum values.

SPORTS Weight

(Right people and Londoners) Max. tier (global)

Min. tier (global)

No. of tiers

Ceremonies There is no such thing as ‘the right people’ for the opening and closing ceremonies but average Londoners should be able to afford what is the main event of the OG

1.800,00 $ 35,00 $ 5

Swimming

The UK has won some medals in Swimming and this will be a main attraction for Londoners. We must guarantee affordable tiers even if taking advantage of the revenue opportunity. About the right people to support, the sport is popular enough to attract a majority of people who love and support it.

500,00 $ 25,00 $ 4

Athletics

The UK has won some medals in Athletics. Besides that, this is one of the OG main events, with huge affluence and support. Getting the right people to watch won’t be a problem but one should guarantee Londoners affordable tickets.

500,00 $ 25,00 $ 4

Artistic gymnastics

Being one of the Big Four events, this sport won’t have many problems attracting the right people, As for Londoners, this should not be a major attraction.

420,00 $ 40,00 $ 3

Track cycling

This sport needs the right supporters but that won’t be that hard to find as it has huge local support. Moreover, support from Londoners and UK citizens is guaranteed because the UK has been winning a lot of OG medals in this sport.

335,00 $ 60,00 $ 3

Table tennis

Table tennis has neither a local nor a global appeal. It might have some problems attracting both the right supporters and Londoners. Nevertheless, as it has not so many tickets available per session, even a minority of supporters might fill in the space.

150,00 $ 20,00 $ 3

Football

Football needs the right people to support but that is not very hard to find as Europe and the UK are huge fans. Nevertheless, tickets should be affordable to fans, Londoners and locals from other cities as football games have place all around the UK. Also to take into consideration is the different status of OG football, women football and the need to travel to support national teams.

150,00 $ 25,00 $ 4

Other

Other’ includes a variety of sports and events. Some will have no trouble in finding the right supporters, others will. By the same token, some will attract Londoners while others will not. Price must reflect this as it does and tiers (max./min. & no.) should differ accordingly

140,00 $ 15,00 $ 4

15

So that all this results were possible, we also calculated some ratios that allowed

us to prepare our recommendation and evaluate it, that is, compare attendance and

revenues from different Olympic Games.

Looking at the first auxiliary table, we can admit that our main goal is to guarantee

an attendance of at least 80%. It is relevant to mention that Beijing 2008 show an

attendance of 100% but that only means that all the tickets available were sold, not that

all the seats were occupied (there were sports where the organizers of the Olympic Games

had to count with the help of volunteers to fill in the empty seats).

The previous table shows the revenue won from the tickets in each of the Olympic

Games. As we can notice, our goal is to present revenue from tickets of about 550 million

dollars.

Available Sold Ratio

Atlanta ‘96 11 8,3 0,76

Sydney ‘00 7,6 6,7 0,88

Athens ‘04 5,3 3,8 0,72

Beijing ‘08 6,8 6,8 1,00

London ‘12 7,96 6,3 0,79

Revenue from tickets Tickets sold Avg. ticket price

Atlanta ‘96 425 8,3 51,2 $

Sydney ‘00 551 6,7 82,2 $

Athens ‘04 228 3,8 60,0 $

Beijing ‘08 200 6,8 29,4 $

London ‘12 543 6,3 86,2 $

16

We decided to do the previous table, which mirrors the average number of tickets

per session, because that way we understood the low attendance risk and high revenue

opportunity, and also the number of tiers, something that was really useful when defining

the average price.

Another important data that we used to calculate the value of ticket prices for the

2012 Olympic Games, regarding football, was the price of tickets for Euro 2012 that will

also occur in Europe (Ukraine). It is also important to make clear that the price of Euro

2012’ tickets have a higher price when compared to the tickets of Olympic Games due to

the fact that in OG there will also be female football and sub-23 teams, that do not have the

same popularity as the major teams, that will play in Euro 2012.

Ceremonies Football Swimming Athletics Artistic

gymnastics Table tennis

Track cycling

Total sessions

2 42 17 20 19 32 9

Total tickets per sport

120000 1975000 185000 756000 235000 85000 28000

Tickets per session

60000 47024 10882 37800 12368 2656 3111

Ratio/ Ceremonies

1 0,78 0,18 0,63 0,21 0,04 0,05

Euro 2012 Category 1 Category 2 Category 3

Opening match 250 € 140 € 45 €

Group matches 120 € 70 € 30 €

Quarter-final 150 € 80 € 40 €

Semi-final 270 € 150 € 45 €

Final 600 € 330 € 50 €

17

Conclusion – Analysis sport by sport

The Big Four (Ceremonies, Swimming, Athletics, Artistic gymnastics)

As we said, these represent a huge revenue opportunity. Therefore, we

draw on higher prices (higher than in previous Olympic Games) even if we follow

the motto Everybody’s Games by lowering the minimum tier, allowing average

Londoners and the local community to participate. Depending on the amount of

tickets available, we recommend a larger or smaller number of tiers to attract the

right people and the average Londoners even if charging always an extra in the

upper tier. Note that the UK has won some medals in swimming and athletics, and

China has won some medals in artistic gymnastics, which might reveal itself

important (see below).

Track cycling

For this sport, we expect a huge affluence from UK supporters and prices

must be affordable to average Londoners, while not compromising the revenue

opportunity. The attendance level may be at risk in the sense that track cycling is

not that popular abroad. For this reason, we went up on the average, mainly by

increasing the maximum tier. As there is not a great demand for this sport but the

amount of tickets is relatively low, we expect to naturally expect the right people.

Table tennis

Table tennis does not have any particular appeal and does not represent a

revenue opportunity. Notwithstanding, table tennis may attract Chinese tourists,

that now travel a lot, as table tennis has a huge tradition in China and they have

won a lot of medals in this sport. Besides that, it does not have many tickets

available per session and as there is less offer, we increased a bit the average price.

For the same reason, we do not recommend a large number of tiers.

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Football

Football is the most important sport in Europe. Notwithstanding, football in

the OG is not that important as i) there is another more important competition, the

Euro, in the Summer 2012, ii) there are lot of teams less attractive, with sub-23

players, iii) women football is less appealing (and these games correspond to 45%

of the total football games), iv) football games do not fit that well as other sport in

the OG spirit as games are spread all over the UK and not concentrated in the

Olympic village or the city of London. Note that usually, the countries who win the

OG in football are not top teams.

On the other hand, football gives other UK cities the opportunity to

participate in the OG. Thus, football games may be able to attract people that

otherwise wouldn’t attend any OG event, i.e., beyond Londoners and those who

will choose to travel to London. Nevertheless, it may be hard to fill in stadiums as

each event has many available tickets and football does need cheerful attendance.

For this matter, we chose to lower the average price. Also, giving the

amount of tickets available, it makes sense to have a larger number of tiers and

charge a little extra in the maximum tier to maximize revenues, of course.

19