Monday, 20 May 2013

Do you buy Eurovision

Love or hate Eurovision, it brings procurement challenges.

Place yourself in the position of the Irish Government deciding whether or not their average investment of sending a delegation over the last five years, at an average cost of €200,000 per year, represents good value for tax payers (including those avoiding UK tax).

Ireland has had its fair share of winners over the years and has long been a country associated with culture as ‘the land of saints and scholars’. Indeed, the country’s (and one of its more famous beverages) emblem is a harp.  But does the additional exposure to anything of between 100m and 600m viewers, at a cost of €200,000 per year add value? Being last in the competition and consistently delivering poor performance is unlikely to help cultural positioning.  Perhaps Eurovision actually detracts from Ireland’s cultural heritage – I can’t believe Eurovision would tip the balance in any decision whether or not to visit Ireland, so the tourism payback must be questionable.

However, there must have been a cultural payback in the repositioning of Irish Dancing when the high kicks and short skirts of Riverdance danced on to the stage some years ago. Yet, Riverdance only had a seven minute ‘dance on part’ during the interval of the 1994 Irish hosted Eurovision – can any of you remember which entry actually won that year?  The real beneficiaries of that investment must have been those who subsequently developed the ‘interlude’ into a full length performance, danced their way around the world and on video and DVD sales – did any money actually end up in Irish hands?  So you have a working assumption of the Irish government carrying the risk of investing in the interlude but others gaining the benefits.

What of the actual song writers and singers. It seems even the more bizarre acts can benefit but carry little risk if they lose? Does that make sense to the investor of €200,000?

Of course the logistics involved in moving so many around ‘wider Europe’ must be substantial – is there a corporate hotel and travel deal?

Then there is the perverse incentive that if you actually win you will have to pay to host the next event. That will mean infrastructure investment you may not otherwise have budgeted for and also the risk of the whole thing turning into a debacle. Maybe it only makes sense to put forward a potential winning act if you have that risk well managed and have deep pockets. Having said that, we are led to believe that commercial sponsorship covers most of the actually event costs, yet negotiating sponsorship deals is frequently hard work and the negotiating power may well have moved from the host country. Are procurement professionals even involved in the discussions?

I can honestly say I didn’t watch Saturday’s Eurovision, but the more I think of it, it must represent an excellent procurement case study.  

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