The Olympics officially begin tomorrow. Actually, some games are already under way in the tournament sports, such as soccer. Oh, I'm sorry. Futbol.
Already there is a group that has won gold in Athens: firms providing security for the games. The amount that the International Olympic Committee is spending in Athens on security measures is massive. Understandably so, of course, but get this: The total expenditure in Athens on security measures will be more than 15 times what was spent in Atlanta in 1996. It is five times more than was spent in Sydney in 2000.
These are different times. When people think of security annoyances, it's also more than a little natural that the vision of a plane flying into a building flashes into their minds. And in the next two weeks the Rosetta Stone for potential mayhem is going to open up in a country that hasn't exactly distinguished itself in the pantheon of security: Greece.
Physical security has turned into a huge business, with publicly traded companies such as Brinks (NYSE:BCO), Diversified Security Solutions (AMEX:DVS), and Tyco (NYSE:TYC) prominent in the business. But another company will have a big security presence in Athens, and it's not one that people tend to associate with security at all: SPX Corporation (NYSE:SPW), which has a majority of its business in industrial products, also has a subsidiary in the security business called Decision Strategies, with $145 million in revenues per year. SPX acquired Decision Strategies in 2001, but the company has a long history in providing Olympics security, having done so at multiple games since the Los Angeles games in 1984. Drew McKay, a senior vice president with Decision Strategies, gave me some of the background of how big a business security has become since 2001.
We tend to think of things such as airports, public transportation, and big events, but the needs of corporations to secure their assets has exploded. Decision Strategies and its sister company Vance International provide security solutions at office buildings, at military bases, on construction (and in Iraq re-construction projects), and so on.
McKay noted that the thing that keeps him up nights is that the IOC simply isn't going to be able to manage everything. This past week the U.S. State Department warned Americans traveling to the games to anticipate upwards of three-hour delays for security getting into the venues. As we've learned in Iraq, these very choke points are inviting targets by themselves. But McKay insists that the security measures in Athens are the best the world has to offer, that Athens is very much a "hard target." This opens up the question -- are there other potential targets that will be softer while the world concentrates on Athens? The cost to consider these things is immense -- the Olympic Games are going to cost $15 billion, more than double what Athens' original proposal estimated. Much of the extra cost is for security measures.
That's something security firms think about constantly, and the demand for their services isn't likely to decline any time soon.
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Bill Mann owns none of the companies mentioned in this story.
