Researchers have known for years that hosting large sporting events like the Olympics always costs more than expected and always yields less revenue and useful long-term infrastructure than estimated. Now voters and politicians in democratically elected countries are starting to realise the same thing.
Potential host cities are dropping out of the bidding process for the 2022 Winter Olympics like crazy.
Deadspin’s Barry Petchesky has a breakdown of the cities that have scrapped their campaigns to host the event.
Krakow, Munich, and Davos/St. Moritz all withdrew their bids after the public voted against hosting. Stockholm withdrew after the city’s government said that “revenues will likely be lower and costs higher” than estimated.
Oslo’s bid is on life support amid mounting public opposition. And Lviv, Ukraine’s bid looks to be all but finished in the face of widespread unrest in the country.
Bidding on the Olympics has been justified up for years by one big economic lie: investing in hosting Olympic Games will lead to long-term economic growth.
In a 2006 paper, “Mega-events: The effect of the world’s biggest sporting events on local, regional, and national economics,” Holy Cross economics professor Victor Matheson took this idea to task:
“Public expenditures on sports infrastructure and event operations necessarily entail reductions in other government services, an expansion of government borrowing, or an increase in taxation, all of which produce a drag on the local economy. At best public expenditures on sports-related construction or operation have zero net impact on the economy as the employment benefits of the project are matched by employment losses associated with higher taxes or spending cuts elsewhere in the system.”
Matheson also argues that Olympic economic impact reports often ignore the significant costs for things like security, and conflate “general infrastructure” with “sports infrastructure.”
The things you need to stage a two-week bobsleigh event are different than the things you need for daily life.
The most obvious representation of this is “white elephants” — costly Olympic stadiums that now sit empty. From Sarajevo to Athens to (some fear) Sochi, former host cities are full of examples of buildings that served a specific purpose for two weeks during the Olympics and then immediately fell out of use.
Countries, at least democracies, are no longer buying the economic benefit argument. As a result, we could be headed into an era where only non-democratic governments will want to host the Olympics.
After dropping out of the bidding, Stockholm’s ruling party issued a statement saying they had no use for Olympic infrastructure:
“Arranging a Winter Olympics would mean a big investment in new sports facilities, for example for the bobsleigh and luge.”
“There isn’t any need for that type of that kind of facility after an Olympics.”
The final two bidders for the 2022 Olympics are Almaty, Kazakhstan — who’s first and only president, Nursultan Nazarbayev, won 95% of the vote the most recent election, which was roundly criticised by international monitors — and Beijing, China.
The International Olympic Committee will vote for a 2022 host city on July 31, 2015.