The ex-Goldman man bringing his banking skills to the Olympics
AS far as many people are concerned, ex-Goldman Sachs banker Paul Deighton has quite possibly the best job in the world. Today he’s precisely two years away from organising the most prestigious sporting event in the history of mankind, the Olympic Games. And so far it’s going swimmingly well, he says. And he’s still in the job after four years – the comparable agency for the Sydney games went through three chief executives.
Sure, there’s the little problem of selling 10m tickets to often little known sports, and yes, the Games might not be as environmentally friendly as was once pledged. Yes too, there are question marks about transport and the lasting legacy and the ticket allocation – will domestic fans miss out to corporates and overseas visitors, for example?
But the chief executive of the Local Organising Committee of the Olympic Games and the Paralympic Games (LoCoG) feels things are on track. Crucially, he has raised sponsorship money from a bunch of corporate backers such as Lloyds Bank and BA and now he wants to “warm people up” for the events ahead. “Now’s the time to plan your Games,” he says. “Because two years will go quickly and there are a number of ways to get involved.” Now that the infrastructure is two-thirds ready, Deighton’s priority is to attract the 70,000 volunteers and 10m ticket-holders to ensure the Games’ success and financial viability.
POT OF MONEY
Deighton is in charge of a £2bn budget, which is funded from the private sector and from ticket sales. This pot of money is for the costs of staging and hosting the games – everything from feeding the athletes, buying sports equipment, venue overlay, technology, marketing, recruiting and paying the workforce, and so on. Then there’s a £9.3bn fund, which is the ODA’s publicly funded budget to build the new venues and infrastructure for the Games, and for the regeneration of East London.
Deighton has already raised around £650m of private sponsorship, a figure he’s enormously pleased with given the economic circumstances. “The thing I’m most proud of is that we have raised all this money from private sponsorship in a market that went from credit crunch to recession to an era dominated by deficit reduction. To have raised a record amount of sponsorship in those circumstances is gravity-defying.”
As evidenced from a view out of the windows of the Organising Committee’s reception in Canary Wharf, the Olympic stadium and the other venues rise somewhat majestically from the previously barren ground of East London. And they appear to be on time and on budget. Deighton is now able to look ahead to dates, in the not too distant future, when some of the main venues will be ready to host test events.
But the job of organising London 2012 is not without further challenges and some of these on first sight look different to those he encountered at Goldman, where, in the first phase of his career, he worked on corporate finance deals such as the spinning off of Vodafone from the more defence-focused Racal or on the selling of British Caledonian to British Airways.
For instance, of the 10m tickets that need to be sold for the Games and the Paralympics combined, quite a few of those will be to watch less well known events such as volleyball. Indeed, Deighton tells me with a hint of trepidation, there are 76 volleyball sessions in a venue that holds 15,000 a time (the Earls Court arena), which amounts to rather a large number of seats to fill for a sport that has next to no popular appeal in the UK. As an ex Goldman banker, Deighton has no doubt dealt with some complex problems, but all the same this is a big ask.
The hope of the Olympics committee is that people will be so desperate to take part in the Olympic experience that they will support the lesser known events – but until the ticketing process begins in earnest, there’s no knowing quite how high the demand will be. So far, the signs are encouraging in that more than 1m people have put their names down for the Just Sign Up campaign, which registers interest in tickets and gives those who have enlisted priority availability when the sale process begins.
There have been murmurings that the organisers will renege on their earlier commitment to provide a certain number of affordable tickets but Deighton, who applied for the job after seeing an advertisement in the Economist, is not getting drawn on this and indeed reiterates that affordability and accessibility are two prerequisites of the sales process.
He says his team has been fortunate to have learnt from some of the huge events of the past few years, such as Beijing, the Vancouver Winter Olympics earlier this year and the South African World Cup.
He feels Beijing 2008 suffered from a lack of support at some of its venues. “I think there was some political distribution of tickets around the country which contributed to this. People living far away from the venues were sent tickets but many of them didn’t use them; many just stuck the tickets on the wall as souvenirs. We need full stadia to create a great atmosphere,” he says.
A common complaint at recent sporting events has been the high allocation of tickets to corporate guests who might not be as committed to the sports they are supposedly watching. Too many of them spend the bulk of their time being entertained, critics say.
While acknowledging the importance of the corporate sector to the revenues the Olympics organisers must raise, Deighton thinks he has got the proportions right.
Of the 10m tickets on sale, 75 per cent will go to a domestic public ballot, with the remaining 25 per cent being split between overseas visitors, corporates and organisers.
Transport is another of the most important issues ahead of the Games and already the unions are warning that they have not signed any agreements on extended services during the Olympic period and upgrades to the Northern Line now look unlikely to happen on time. Deighton expects the transport system to hold up well. “Compared to most other large cities London has an extraordinarily rich transport infrastructure. In the main spectators will be able to get to the Games by public transport. There’s been £8.5bn of transport upgrades over the past five years which expands capacity and there are 11 different train lines into the Olympic Park. The system is mature and has got capacity.”
The race to sign up volunteers is another thing on the organisers’ minds, with a big push planned now that the two years to go milestone has been passed.
Up to 70,000 volunteers are being sought and Deighton reckons they will play a crucial
role in the success of the events. “The character of the games will be based on the
volunteers and people will remember the Games in terms of the volunteers.”
Above all, Deighton is hoping that London can rise to the occasion in a manner that will have lasting effects for its economy and its attractiveness. “Whether you’re from Sunderland or Rio de Janeiro the atmosphere in the city should create an end to end experience that you will remember for the whole of your life.”
There’s little doubt that the Organising Committee has had a reasonable first four years and preparations appear to be well on track. But as Deighton well knows, closing a deal is the key. And the business end of this particular transaction starts around now.
CV | PAUL DEIGHTON
EDUCATION: BA in Economics from Trinity College, Cambridge
CAREER: Started at the Security Pacific National Bank and Bank of America. He joined Goldman Sachs in 1983, and rose to be the bank’s chief operating officer in Europe and a member of its European Management Committee. He became a partner in 1996. He lives in central London with his wife Alison. He became chief executive of LoCoG in 2005.