The metaphor was all too apt. In August last year a crowd of spectators, press and athletes gathered at a sparkling new rowing and canoeing venue northeast of Athens to watch the World Rowing Junior Championships and test out one of several new venues built specially for the 2004 summer Olympic Games. The excitement built as the rowers for the men’s eights climbed into their boats. The starting gun went off, the oars hit the water and … the boats promptly capsized. What the executives of the Athens Organising Committee (Athoc) hadn’t reckoned on was what the locals call meltemia, the ferocious winds that rip through the region every summer. No fewer than five boats sank during the first day’s qualifying rounds. Some of the rowers were fished out of the water by rescue boats; those more determined to finish swam several hundred metres to the finish line with their boats in tow.

No one said organising the Olympic Games would be easy. But for Athoc, the mammoth task of staging the world’s largest and most prestigious sporting event has been particularly onerous. It has had to deal with scepticism and in-fighting ever since it won the bid to stage this year’s games back in 1997, beating Rome, Stockholm, Cape Town and Buenos Aires.

Athens is hosting the first summer games under an unprecedented austerity drive in Olympic financing. In the wake of the bribery scandal surrounding Salt Lake City’s winning bid for the 2002 winter games, the International Olympic Committee (IOC) — the Switzerland-based organisation that runs the games — has sought to play down the commercial aspect of the games by restraining sponsorship and other revenue generators. For its part, Athoc has been keen to inject some of the original Olympic spirit — pure athleticism, noble competition and all that — back into the games, and has set commercial restrictions of its own. The games are tapping government coffers to a degree not seen since the 1980 Moscow Olympics.

Bearing much of the responsibility for delivering the games on time and on budget is the CFO — typically a seasoned corporate finance chief taking on the challenge of a lifetime. And it is a unique challenge. As Pat Glisson, CFO of the 1996 Atlanta organising committee, puts it, an Olympic finance chief’s job is to “create a Fortune 500 company from scratch, then take it apart at the end.” For Athens, it also means fighting political fires all around. Tension between Athoc and the Greek government has been behind much of the rocky start to preparations.

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In the last few years, as deadlines were missed and spending mounted, Athoc went through two CFOs in rapid succession — Costas Bakouris, a former Esso and Eveready finance head who resigned in 2000, and Petros Synadinos, an architect who lasted just six months before also resigning. Next up: Ioannis Spanudakis, the 50-year-old former Dow Chemical executive who’s been in the hot seat since March 2001. With a wink, Spanudakis describes his move to the stricken Athoc as “an interesting twist in my career,” having spent 16 years climbing the management ladder at Dow.

The scale of the project facing Spanudakis is massive — Athoc expects 16,500 athletes and team officials, 60,000 volunteers, 22,000 accredited journalists and broadcasters, and over 5 million ticketed spectators to descend upon the ancient city for the two-week festivities. Along with finding accommodation for these masses, 35 competition venues as well as 72 training facilities are needed in this city of 3m people. On top of that, there’s all the infrastructure to be upgraded by the government in time for the games, including new and extended railways and more than 200 kilometres of roadworks. “We work for seven years for something that matters for 17 days,” quips Spanudakis.

But following the 2002 Salt Lake City winter games, the IOC, to shore up its scandal-hit balance sheet, cut the percentage of broadcast revenue it passes on to organising committees to 49%, from 60% previously. Athoc itself, appealing to “the ideals of Olympism,” has restricted the maximum number of official local sponsors to 40 (down from 100 in Sydney and 200 in Atlanta). It has also limited ticket sales to 5.3m — compared to 7.6m in Sydney and 11m in Atlanta — and cut ticket prices by 30% compared to four years ago.

The Odyssey

A year before Spanudakis’s arrival at Athoc, the IOC dropped a bombshell. Unhappy with the squabbling between the government and Athoc over the slower-than-slow pace of preparations, IOC president Juan Antonio Samaranch threatened to move the games to another city if the organisers didn’t get their act together, a threat last made in the run-up to the 1956 Melbourne games.

Beyond the delays and derision from international observers, what irked Greeks most were growing signs that Olympic organisers were failing to keep a firm grip on the money they were pouring into the event. Athoc, which is responsible for all services related to the games, has seen its budget grow from initial estimates by €500m, to almost €2 billion. Meantime, the Greek government, with responsibility for all infrastructure projects, says its share of the costs has ballooned from around €2.5 billion to a widely mistrusted official estimate of €4.6 billion (others say €10 billion is more realistic).

As one member of the parliamentary opposition party, former sports minister Fani Palli-Petralia, groused, “2004 preparations are turning into a theatre of the absurd. People here will be paying taxes for the games for the next 25 years.”

To avert a crisis, Greece’s prime minister, Costas Simitis, personally led a purge of the Athoc executive crew. Astutely, at the helm of the new, streamlined five-member executive group he placed Gianna Angelopoulos-Daskalaki — a flamboyant former politician and national hero following her successful management of the bid committee that clinched Athens as host. Under Angelopoulos-Daskalaki, the IOC has grown more confident that on August 13th, the show will go on—and as part of her inner circle, Spanudakis has been the driving force in steadying the games’ shaky finances.

Finance Champions For Spanudakis, the key to the turnaround has been decentralisation — or “venuisation,” in Athoc parlance. “This allows us to carry out activities at multiple locations simultaneously, without the need to route every decision or action through a central bureaucracy,” says the finance chief. As a state-owned company whose sole shareholder is the Greek finance ministry, Athoc suffered mightily from unwieldy bureaucracy early on — one of Spanudakis’s predecessors lamented to the press that it took 18 months just to hire a typist.

The “venuisation” has meant building up a finance staff of 100, double the number employed by Sydney, and assigning individual controllers to Athoc’s functions — from press services to translation to catering — and to each Olympic venue, a structure inspired partly by Spanudakis’s experience at Dow. “I think this was a great development in Greece — Sydney did not do this,” he says proudly.

To bear down on spending, one of his chief aims has been “to make budgeting a central activity for everybody,” says Spanudakis. “When every function has their own finance person, all their activities can be explained through the lens of finance. It is easier to control and track spending accurately, and to reallocate funds based on real-time spending patterns.”

Maintaining discipline on expenses is no mean feat for an Olympic CFO, as the extremely backloaded nature of the project means that more than three-quarters of the necessary expenditure comes in the last two years of an organising committee’s life. Meantime, “people get very excited, and finance has to play a key role in trying to keep everyone on milestones within a logical progression,” notes Atlanta’s Glisson.

“It’s about thinking ahead and constantly monitoring the critical success path, the ‘How do I get there?’,” says Spanudakis. “This is something that a big corporation teaches you.”

The result of his finance overhaul, says Spanudakis, is that “we probably have one of the best finance departments in the country.” Indeed, under his watch, most of Athoc’s budget surprises have been of the welcome sort, like soundly beating its original €200m target for national sponsorship, instead raising close to €300m.

Of the €2 billion revenue that Athoc needs to meet its budget, about half has already come from the IOC in the form of television rights and international sponsorship revenue. The Greek government has injected another €235m into Athoc’s coffers, leaving the rest — national private-sector sponsorships, ticket sales, merchandise marketing — for Athoc to raise. Though the self-imposed restraints haven’t made this easy, Spanudakis is pleased with the amount of money raised — equal to Sydney’s from a fraction the number of local sponsors. Most of the sponsors have come since Angelopoulos-Daskalaki’s arrival, notes Spanudakis, describing Athoc’s marketing function as “one of the most capable teams within a very capable Athoc.”

The finance chief pushed hard on marketing to secure as much sponsorship revenue in cash as possible. And they delivered. Nearly 60% of Athoc’s local sponsorship revenue is in cash, rather than “value in kind” (in which, for example, Olympic Airways donates €10m worth of tickets). Sydney’s local sponsors gave only 40% of their support in cash.

Glisson of the Atlanta games says that the “arcane nuances” of value in kind is one of the details that set the Olympic CFO’s job apart from any other finance chief’s. “The trick is to figure out the value, whether you really need it, and how do you use it,” he says. “There’s always more than you bargain for in terms of translating this into financial planning.”

The Finish Line

Along the way, Spanudakis has also built up an adept treasury team. The department has generated $80m after selling Athoc’s dollars for euros in a forward exchange transaction in 2002: “a tremendous achievement,” beams Spanudakis. “Very successful and, of course, a bit lucky.”

Another testament to Spanudakis’s finance acumen has been in procurement. Because Athoc is state owned, it must follow all Greek and EU procurement policies, a “cumbersome and long-lasting process that takes all sorts of top management’s time,” laments Spanudakis. Still, he has proved himself an astute negotiator. “Nobody else in Greece has ever dealt with so many tenders in such a short time,” says the finance chief, joking that “it’s probably a record.”

So impressed was the government by Athoc’s purchasing efficiency that it ceded much of its own tendering work for Athoc’s team to handle. This has allowed Athoc more of a direct say on how the government runs its side of the preparations.

As a result, Athoc nipped over-ambitious plans to build extensive new permanent seating at several venues, instead opting for a quicker roll-out of more temporary grandstands. Plans for a second hockey field were also scotched before construction crews broke ground. In all, these changes saved the government between €200m and €300m and, most importantly, time.

With five months to go before the opening ceremonies, Athens’s Olympic organisers are now gaining praise from former sceptics, the IOC chief among them. “Everyone seems to be confident that delivery will take place as scheduled,” says Denis Oswald, the IOC’s envoy to Athens. But with the world watching, organisers have little room for error. “Delivery times are a little tight,” Oswald notes. And at this advanced stage, each new delay carries potentially grave consequences.

After all, poor execution can turn the Olympic mega-event into a major money loser for the host city. The 1976 Montreal Olympics left that city deeply in debt — taxpayers have been paying for the blunders to this day.

There continue to be worrying signs that preparations in Athens may yet fail to deliver on time. The company that owns two of the 11 cruise ships expected to provide much-needed accommodation went bankrupt in January, placing the ships’ scheduled rendezvous at the port of Piraeus in doubt. In mid-February, the contractor in charge of building the swimming stadium’s roof said it couldn’t complete the project, forcing a rethink of plans. Even Mother Nature eventually got involved — also in February, a heavy blizzard brought construction on key works to a halt for days. Dimitris Gerou, a government spokesman, jokes that “There are no delays, just a shortage of a few weeks.”

For Spanudakis, in addition to dealing with these and other unexpected hurdles, the key in the months ahead will be to keep a tight grip on the control mechanisms he put in place while his other duties come to the fore.

Incorporating new employees is one major task as the games draw near. “There are shake-ups now and then in the corporate world, but here it moves much, much faster,” says Spanudakis. “When I came we had 235 people. Today we have roughly 3,000. In June, we will have 6,500.”

And seeing through remaining open tenders to completion remains a drain on Spanudakis’s time. “The vast majority of tenders are complete, but there are still some we hope to conclude by April at the latest,” he says.

Today, the finance chief’s days are filled with “a lot of fine tuning” as his teams are out checking goods and services delivered against contracts and mobilising the logistics operation so that everything is transferred smoothly “from warehouse to venue.” Moving “from the planning phase to the implementation phase” has involved a swift shift of focus, says Spanudakis and the intense planning sessions that took place at his office in Athens’s Nea Ionia district when he first joined Athoc are now a distant memory.

And more change is on the way. Though for many at Athoc the closing ceremonies on August 29th will be a welcome relief, Spanudakis’s work doesn’t end there. He’ll have to keep an eagle eye on assets as the committee is dismantled — “making sure that all the furniture, computers and telephones are returned to their owners.”

And before he turns the lights out, he’s responsible for drawing up Athoc’s final financial statements — watch out for the “accounting morass” created by excess value in kind, warns Atlanta 1996’s Glisson — probably some time in late 2005.

When asked about his plans down the road, Spanudakis won’t say: “I’ve left it open — corporate, private or other. It all depends on how successful the games are.” For this reason, between now and August he’s hoping that there’s nothing more out there that can sink his plans.

Big Money

With the Greek government investing billions of euros on infrastructure in the run-up to the Olympics, the hot debate in Athens is on the long-term impact such a vast sum will have on the city after the summer games are over. Whether spending big means winning big is unclear.

When it comes to sporting events like the Olympics, “economic impact estimates are contested often as vigorously as the games themselves,” says Robert Baade, an economics professor at Lake Forest College, Illinois in the US. His own research showed that Atlanta’s $1.7 billion (€1.3 billion, at today’s rate) 1996 Olympic Games created about 25,000 part- or full-time jobs. At a cost of around $63,000 per job, the impact was roughly equal to what non-Olympic public spending had produced in the past.

But the model Athens is hoping to follow is Barcelona, whose big infrastructure overhaul ahead of the 1992 Games is seen by most as the greatest Olympics success story. Ferrán Brunet, a professor at the Autonomous University of Barcelona, estimates that the economic benefit of the 1992 games — to tourism and industry over and above what could be expected if the city had not hosted the games — is approaching €20 billion.

According to Gregory Papanikos, director of the Athens Institute for Education and Research, a think tank, the Greek capital could see an extra 450,000 tourists a year until 2011, injecting €600m into the economy annually. But that’s the best case, and Papanikos isn’t sure the reality will be so rosy for most Athenians. “Alternative uses of these funds would have had greater impact on the social and economic welfare of citizens,” he contends.

Still, “Athens was in desperate need of infrastructure,” says Baade of Lake Forest College. “Maybe that will give it a boost that differentiates it from the experience that we’ve seen in many past Olympic host cities.”

But the model Athens is hoping to follow is Barcelona, whose big infrastructure overhaul ahead of the 1992 Games is seen by most as the greatest Olympics success story. Ferrán Brunet, a professor at the Autonomous University of Barcelona, estimates that the economic benefit of the 1992 games — to tourism and industry over and above what could be expected if the city had not hosted the games — is approaching €20 billion.

According to Gregory Papanikos, director of the Athens Institute for Education and Research, a think tank, the Greek capital could see an extra 450,000 tourists a year until 2011, injecting €600m into the economy annually. But that’s the best case, and Papanikos isn’t sure the reality will be so rosy for most Athenians. “Alternative uses of these funds would have had greater impact on the social and economic welfare of citizens,” he contends.

Still, “Athens was in desperate need of infrastructure,” says Baade of Lake Forest College. “Maybe that will give it a boost that differentiates it from the experience that we’ve seen in many past Olympic host cities.”

Balance Beam

There is one peculiarity of Olympic finance that Athoc’s finance team will definitely not want to take with them to future jobs. The committee, naturally, tries to avoid losses, but also profits. Since a large chunk of any excess revenue over expenditure achieved by an organising committee must be given to the International Olympic Committee (IOC), “organising committees have become smart enough to invest any surpluses and keep it in their city,” explains Holger Preuss, professor of sport economy and management at Johannes Gutenberg University in Mainz, Germany.

After the 1988 Seoul organising committee outdid the 1984 Los Angeles games, making a huge profit, explains Preuss, the IOC came calling and the Koreans backtracked, shuffling the books so that the financial outcome wasn’t quite so impressive.

Subsequent organising committees have kept their final balances as close to zero as possible, though on a strictly operating basis they have all made profits equal to hundreds of millions of euros. This is usually done via “legacy contributions” to national sports federations or “overlays,” the beautification projects that spruce up a city and make it user-friendly for athletes and visitors.

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