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Opinion

Fun and Games

Fun and Games
July 26, 2012
Fun and Games

Yes, I do know. I see the Olympic (oops) stadium from the train every day. And no, your eyes do not deceive you. There is no Olympic feature or news story, no "citius, altius, fortius" stock screen anywhere on our website.

The reason for this omission is not the cynicism for which we Brits are so famous, nor any antipathy towards sport - quite the reverse. It's just that the Olympic Games, like most major sporting events, are unlikely to have any lasting impact for the investor.

True, building all those shiny new venues created lots of work for construction companies - like every Olympiad since 1960, London 2012 went over budget - but at wafer-thin margins and spread out over years. Certain companies, like temporary power supplier Aggreko or advertising giant WPP, might reap a short-term benefit. But the chances are that was priced into the shares months or even years ago - and for for some, the Olympics has even become a curse.

David Cameron wants you to believe there'll be a boost to the economy, and after this week's second-quarter GDP figures, it could certainly do with one. But while the Office of Budgetary Responsibility reckons there'll be a 0.2 per cent boost in the third quarter (half of which will come from recognition in the national accounts of ticket revenue from last year), any gains will be largely given back in the fourth quarter. The Games won't pull the UK out of recession.

What about booked-up hotels and jam-packed restaurants? That wasn't the experience of Sydney or Beijing, both of which saw lower tourist numbers when they hosted the Games. Sports fans came, but every one else stayed away and many locals cleared off too. Here, booking website Hotels.com says there is no shortage of rooms, with hoteliers even having to drop rates. Research from spareroom.co.uk found that nine out of 10 people who'd tried to rent rooms out during the Games had failed to find any takers.

Most of the money made by the Games accrues instead to the International Olympic Committee in Lausanne, which nets around $5bn (£3.27bn) from the sale of broadcast rights and worldwide sponsorship packages.

Alas, you can't buy shares in the IOC. So by all means sit back, pray for British medals and enjoy a glorious summer of sport - but don't believe anyone who says you can make money out of it.

■ Royal Mail has warned us that the Olympics may disrupt deliveries of the Investors Chronicle to some London postcodes. If you are a magazine subscriber, you can always view this week's edition online at www.investorschronicle.co.uk/digitaledition.