Part 3 in a series of reports on the Beijing Olympics
boycotts
I recently stated President Bush can not
afford to snub China and the Beijing Olympics because China holds so much US
debt that even a threat of calling in that debt can have a dramatic affect on
the U.S. economy. Recently, however, British Prime Minister Gordon Brown
announced he will not be attending the opening ceremony of the Beijing
Olympics, but will be attending the closing ceremony instead. In perspective,
the British do not have as much at stake as the U.S. when it comes to an
Olympic boycott, but a large number of world leaders boycotting the opening
ceremony would give President Bush a valid excuse, at least in the eyes of
China, to also not attend the opening ceremony as long as he attends some other
major events, such as the closing ceremony. In essence, Prime Minister Brown
may have created a de facto way out for President Bush, at least politically.
The problem remains, however, that a general boycott
against the Olympics by consumers will not affect China, which is the target of
the boycott. At this point, sponsorships are a done deal, and the merchandising
plans for memorabilia such as t-shirts, for example, are also a done deal, even
four months before the Olympics. This is because the printing has to be done
early so the t-shirts can be loaded on containers, shipped around the world,
and finally delivered to retail stores. China has already been paid, so the
remaining question is if American businesses, thus the shareholders, will get a
paycheck.
The pressure to boycott is growing, both
to sponsors of the entire Olympics and sponsors of Team U.S.A. In both cases,
these sponsors are essentially advertisers who are looking for their company
logo to be displayed as widely as possible on television in hopes of a strong
return on investment. The main difference between the two are that general
Olympic sponsors get their logos on venues such as arenas, while team sponsors
have to boast their sponsorships in other advertisements. In both cases, large
investments are involved because of the national and world-wide reach of the
Olympics, thus these sponsorships must be by large corporations with deep
pockets. These companies, therefore, have signed contracts with obligatory
payments long ago.
From an economic standpoint, the
Olympics can be compared to two weeks of daily football championship games,
where Americans will watch the big games to see how the home team, Team U.S.A.
in this case, will do. It is an opportunity, or sometimes an excuse for
Americans to buy new wide-screen TV's and audio systems so they can hear
announcers scream GOOOOAAAALLLLL in surround sound stereo. It is also an
opportunity for Americans to show their nationalistic pride every time we win a
medal, preferably gold. It is a chance for Americans to feel great at the water
cooler and splurge a little when they go to lunch with co-workers.
In essence, the Olympics are a time when Americans
from all cities can stand together with pride as our national athletes compete
for the U.S. as a nation, and take pride in the accomplishments of people who
we never met, but will remember forever as Mary Lou, the Miracle on Ice Team,
and Jesse Owens, among other greats. All this national pride and fun will
result in Americans spending money they otherwise would not have, thus
stimulating the economy. This is because happy consumers spend more for things
that make them even happier, thus having a stronger stimulating affect on the
economy than a tax rebate check to pay existing credit card bills.
The reason cities want to host major sporting events
is the money and pride it brings into that city. While the Olympics are not in
the U.S. this year, every American city can benefit when retailers have a surge
in sales, especially for big ticket items, not to mention the increase in beer
sales both in and out of sports bars, plus t-shirts and other memorabilia.
If American consumers are going to boycott the
Olympics, the US economy will be affected and not China's. The boycotters
complain about China's treatment of Tibet, but have yet to do anything about it
other than protest to America. Rather than complain to companies who want to
advertise to and do business with Americans, a smarter move would be to
complain to businesses about why whey are not investing in Tibet.
The Wall Street Journal recently reported that U.S.
companies have invested almost one hundred billion dollars in China, but only a
few hundred million dollars in Tibet. Surpassing Hong Kong as China's economic
monster should be the goal of Tibet and its freedom activists. Although China
controls Hong Kong, the communist government effectively has little power over
the island except for passport control. If people want to see improvements in
Tibet, they should demand investment in Tibet, not boycott of China or the
Olympics. |
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