There are three big Olympic hosting stories going on right now. Together, they give you a sense of where the world’s biggest sporting event stands in 2015:
1. The US Olympic Committee killed Boston’s 2024 Summer Olympics bid barely six months after backing it. Behind an organised opposition group, public support for the bid dissipated over the spring and summer due to concerns about cost overruns and new construction. The final straw came when Boston mayor Marty Walsh refused to immediately sign the standard host city contract that puts taxpayers on the hook for any cost overruns.
2. Senior Japanese sports official Kimito Kubo resigned in the wake of widespread outrage at a new report that put the estimated cost of Tokyo’s 2020 Olympic Stadium at $US2 billion, nearly double the initial amount. The stadium plan has since been scrapped, prime minister Shinzō Abe announced earlier this month. He said in a statement, “We must go back to the drawing board. The cost has just ballooned too much.” Drawing up a new stadium plan means it won’t be ready for the 2019 Rugby World Cup Final, which was supposed to take place in the new stadium.
3. Beijing is believed to be on the verge of winning the rights to host the 2022 Winter Olympics, despite open IOC criticism of their bid. Since 2013, every potential host city with a democratically elected government dropped out of the bidding for the 2022 games, leaving only Beijing and Almaty, Kazakhstan. Among the problems outlined in the IOC’s evaluation of Beijing’s bid: it doesn’t snow on the mountain which will host the downhill skiing events.
There’s a theme here: cities all over the democratic world can no longer justify spending billions in public money (or, guaranteeing to spend untold amounts of public money if the event goes over budget) on the Olympics.
Academics have long argued that hosting the Olympics isn’t a wise financial investment. The economic impact is consistently overstated, the cost almost always exceeds the original budget, and the venues used for niche sports instantly lose their functionality the minute the games are over. Boston attempted to deflect criticism by framing the $US5 billion in public money as “roadway, transportation, and infrastructure improvements” that would leave a lasting legacy, but as the professor and mega-event expert Victor Matheson wrote in 2006, “general infrastructure” that exists only to serve sports infrastructure is still a sports-related expenditure that doesn’t have much of a net economic benefit:
Furthermore, the separation between what is “sports” infrastructure and what is “general” infrastructure is not always clear. The new Wembley stadium in London was originally slated to cost around $US500 million. In addition, over $US150 million in “general” infrastructure improvements were proposed at the same time including new roads and a completely renovated Underground station. Without the presence of Wembley Stadium, however, no new roads or subway station would be required. Therefore, from a objective standpoint, the entire $US650 million price tag should be considered specialised sports infrastructure, and an analysis of the expenditure would likely lead to a negative appraisal of its economic benefit.
As the writer Simon Kuper put it in an article about Brazil’s spending for the 2014 World Cup, the things you need for a big sporting event are not the same things you need for daily life.
The International Olympic Committee is aware of this trend, and has adopted some solid reform measures aimed at reducing the cost of hosting the event. The use of preexisting venues will be encouraged, for example, to prevent the sort of white elephants that the 2004 Athens Olympics produced.
Paris, perhaps the frontrunner for the 2024 Olympics, has all the major sports venues already and only needs to build an aquatics center. Los Angeles, which many believe will replace Boston as the USOC’s host city, could basically host the Olympics tomorrow if they had to.
For the foreseeable future, it appears that cities that bid for the Olympics will fall into two camps: 1) cities with authoritarian governments that don’t have to justify $US5+ billion price tag to the public, 2) cities that already have all the stuff you need to host.
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