By DAN REYNOLDS, senior editor of Risk & InsuranceŽ
In the clearest and coldest terms from an insurance claims perspective, the death of Georgian luger Nodar Kumaritashvili during a practice run at the Whistler Sliding Center in British Columbia on Friday, Feb. 12, at the Vancouver 2010 Winter Olympics may not amount to much.
It may sound harsh to say it, but Kumaritashvili--ranked in the top 50 in the world--was a relatively unknown amateur athlete in a sport that is about as valued monetarily as badminton. Premier League soccer players and NBA and NFL stars and their teams have insurance policies protecting their enormous income streams, sure, but not an Olympic luger, according to experts.
It is in the realm of reputational risk, however, that the Olympian's death may linger and haunt Vancouver for decades.
In terms of any possible legal action, the Georgian Olympic committee seemed to be still weighing its options as Kumaritashvili's body headed toward his hometown of Bakuriani for burial on Feb. 20.
In their first lunge at an assessment of Kumaritashvili's deadly crash, Vancouver Olympic officials said that Kumaritashvili was inexperienced and that it was he, not their superfast track, that was at fault for the wreck.
Yet if the track's layout wasn't in question, why did officials pad the steel beams at trackside and erect a 12-foot wooden wall barricading them after Kumaritashvili collided with one of the posts?
"We think this is a planning mistake," Josef Fendt, the president of the International Luge Federation, told the London Daily Telegraph soon after the incident.
"I exclude the possibility that Nodar was not experienced enough," Georgian Olympic Committee Chief Giorgi Natsvlishvili said in televised comments in the days immediately after Kumaritashvili was launched from his sled at nearly 90 mph.
Some history is in order here by way of added perspective. Despite the dangers inherent in some of the Winter Olympics riskier sports--events like ski-jumping, alpine skiing and the biathlon (where out-of-breath cross country skiers shoulder rifles carrying live ammunition)--Kumaritashvili's death is only the third in the history of the Winter games.
That's not all that has plagued these Vancouver Olympics. As many as 19 people were injured at a pre-Olympics concert; indoor ice events have suffered from poor track and rink maintenance; and opening ceremonies suffered from a technical glitch or two.
Cities spend years, decades in some cases, trying to win the games. And the economic impact of hosting them is substantial. Estimates place the value of the Winter Games to British Columbia's economy at some $2 billion to $3 billion.
Vancouver, which would have hoped to have garnered years of ancillary tourism income from the games, may have lost some of that value in a reputational sense with the death of the luger.
"I think it is a really good example of what is going on today with reputation," said Mary Adams, the found of the Boston-area-based I-Capital Advisors.
"In the case of this situation, people put confidence in a brand, and there are a lot of assumptions that get made because of the brand. So, they have seen that the IOC has policies and procedures, that the cities have standards, and that races have standards and regulations, so there is this assumption that there is all of this infrastructure behind the scenes to support something," Adams said.
All that brand confidence has taken a knock in this case, and that is what will degrade the games' value for Vancouver going forward.
"Dollars tell you whether you were successful in the past, but reputation tells you whether you are positioned to be successful in the future," is the way that Adams put it.
Lillehammer, Norway, the site of the 1994 Winter games, is still said to be garnering substantial tourism revenue from that original public relations score.
Tiny Lake Placid in upstate New York has had the good fortune to host the winter games twice, in 1932 and 1980. St. Moritz, Switzerland, held them twice in a 20-year span in 1928 and 1948, and Innsbruck, Austria, was able to host them twice in 12 years, in 1964 and 1976, despite the deaths of Austrian skier Ross Milne and British luger Kazimierz Kay-Skrzypeski in training runs in 1964.
These days, with the media saturation, like that which attended the death of Kumaritashvili, the reputational impact of an athlete's death is much greater.
In other words, don't bet on that $2 billion to $3 billion windfall coming back to Vancouver anytime soon, if ever.
(Photo credit: ŠVANOC/COVAN)
February 22, 2010
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