Firms wary to buy premium Olympic seats over breach of new graft laws
REUTERS LONDON THE Olympics may be the hottest ticket in London this summer but some of the best seats remain unsold as big companies weigh the cost and the risk of breaching the country’s new bribery laws before buying premium hospitality packages.
In the past, only sponsors could wine and dine clients at the Games, but London organisers have opened up the market to allow businesses to buy packages costing up to 7,500 pounds per person for the opening ceremony on July 27.
While demand for standard tickets has far outstripped supply, an economic slowdown was always going to make these corporate deals a tough sell. The Bribery Act that took effect in July 2011 has added to the challenge.
With the Act allowing “reasonable and proportionate hospitality”, the Olympics are the highest profile test of what that means in practice.
“It has, to some extent, been a thorn in our side for the last year,” said Alan Gilpin, chief operating officer for Prestige Ticketing, part owned by French catering company Sodexo and which is providing corporate hospitality.
“Everyone would liked to have sold more. Is the Bribery Act a contributory factor? Probably yes,” said Gilpin, noting sales for the 2011 rugby union World Cup in New Zealand picked up pace as the event drew near.
Prestige has an allocation of around 88,000 tickets for the Games - about 1 percent of the total - and has sold just under 70 percent of those.
Its so-called Gold package for the men’s 100 metre final on Sunday August 5 costs 6,500 pounds for a top seat in the Olympic Stadium, preceded by a champagne reception and dinner in a purpose-built pavilion nearby in the Games park.
Britain introduced some of the toughest anti-corruption laws in the world in response to criticism from international groups that existing laws were out of date.
Justice Secretary Kenneth Clarke said the act was not designed to ban corporate hospitality - an industry that has become an important source of revenue for sport.
“Rest assured - no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix,” Clarke said in the foreword to guidelines to the act produced by his department last year.
Indeed, the Olympics are the ultimate chance for sports-loving business folk to mix.
Britain is tapping into this by organising a series of business summits around the Games, including one chaired by Prime Minister David Cameron on the eve of the opening ceremony.
“It is like a long summer Davos,” said Tim Jones, a partner at London law firm Freshfields Bruckhaus Deringer, referring to the annual gathering of top executives in the Swiss Alps.
Jones, whose firm is the official legal services supplier for London 2012, said the introduction of the Bribery Act had focused the minds of a lot of companies.
“It has made everyone very careful and cautious. People have come to us to say can we invite guests? The answer is yes,” he told Reuters.
However, Jones said companies needed to put safeguards in place to avoid being caught out. He recommended keeping a register of who was being invited and the justification, reinforced by internal company scrutiny by a senior official.