By Morf Morford
Tacoma Daily Index
With the 2020, ahem, 2021, Tokyo Olympics firmly in the rearview mirror, it might be worth considering what it takes, financially, to host the Olympic Games.
To put it simply, it is an enormous investment of time, money and what could be called reputational capital.
And like an investment in any other area, this investment does not always pay off.
Montreal, Canada for example, held The Olympics in 1976. And took 30 years to pay for the privilege. It took Montreal until 2006 to pay of its debt for the 1976 Games.
The premise is familiar, though it seems more peculiar the more one thinks about it; multiple nations vie, in a complicated, expensive, convoluted and controversial process, to earn the right to host a gathering of world class athletes in a range of competitions from javelin to horse-centered activities.
Submitting a bid to the International Olympic Committee (IOC) to host the Olympics costs millions of dollars. Cities typically spend between $50 million and $100 million in fees for consultants, event organizers, and travel related to hosting duties. For example, Tokyo lost approximately $150 million on its bid for the 2016 Olympics and spent approximately $75 million on its successful 2020 bid.
To re-state the obvious, the arenas, housing, transport and storage of such an event can be, and usually is, insanely expensive.
For example, London paid $14.6 billion for hosting the Olympics. Rio de Janeiro paid over $20 billion for the 2016 Olympics.
Under normal (non-pandemic) conditions, cities must build housing for the athletes in the Olympic village, as well as at least 40,000 available hotel rooms, and specific facilities for the events.
Rio constructed 15,000 new hotel rooms to accommodate tourists. Sochi invested approximately $42.5 billion in constructing nonsports infrastructure for the 2014 Olympics.
Some cities construct temporary facilities, others use them for another round of sports events or adapt them to an entirely different use (a large portion of the Lake Placid, New York, 1980 Olympics site is now a Federal prison: https://www.lakeplacid.com/story/2016/02/olympic-prison-story).
Perhaps like other Olympics settings, during the games the Olympic Village provided entertainment and food service as well as lodging for the athletes in residence, at a cost of $22 million (not adjusted for inflation), funded by the federal government.
The Lake Placid facility had a movie theater, fitness center, disco, (this was 1980) chapel, medical services, post office, bank, game room filled with video games, and a shopping center. Six cafeterias served the nutritional needs of the athletes with a wide range of fare to accommodate the tastes of its international residents. In the entertainment area, five-time Grammy winner Dionne Warwick performed during the Games.
Some cities retrofit existing structures, while others (like Beijing in 2008, for the most part) clear off an area and build an entirely new facility.
Beijing 2022, by the way, will be the first Winter Olympics to be held in China, the second overall Olympics to be held in China (after Beijing 2008), the fourth Winter Olympics in East Asia (after Sapporo 1972, Nagano 1998 and Pyeongchang 2018) and the last of three consecutive Olympics to take place in East Asia, following the 2018 Winter Olympics in Pyeongchang, South Korea, and the 2020 Summer Olympics in Tokyo, Japan.
I usually support “creative re-use” of resources – especially buildings, but somehow the idea of incarceration does not quite gel with the deliberate facilitation of international fellowship and excellence that the Olympics usually promote.
If you or anyone you know is considering advocating for The Olympics, you might want to review Montreal’s experience here: https://www.theguardian.com/cities/2016/jul/06/40-year-hangover-1976-olympic-games-broke-montreal-canada.
Remember the financial problems that seemed to engulf if not overwhelm (and define) Greece a little over a decade ago?
Some economists trace the beginning of Greece’s ongoing economic catastrophes to the Olympic Games held in Athens in 2004. Those games (and their spiraling expenses) stand as the embodiment of excess and irresponsible spending.
The total cost – an estimated $15 billion – far surpassed the original budgeted amount, though to be fair, the overrun was due in part to additional security costs incurred in the aftermath of 9/11 (which were unforeseen when Greece bid for the Games in 1997).
This lack of foresight and planning left the nation with a shortfall of 50,000 euros (about $60,000 USD) per Greek household, which has been shared among the taxpayers ever since.
Brazil was the last nation to host the Olympics during a health crisis (remember zika?) in the 2016 Olympics in Rio de Janeiro.
Lingering, often paralyzing debt is the usual lasting legacy of urban hosts of the Olympics.
The cost for the Tokyo Olympics looks like it will pass $20 billion US dollars.
This is not something that can continue.
As Slate puts it (https://slate.com/business/2021/08/paris-olympics-2024-cost-preparation.html);
The Olympics are going on a diet. After decades of host cities stuffing themselves with expensive, useless velodromes and riflery ranges, the International Olympic Committee has relaxed its requirements—not out of magnanimity, mind you, but because cities stopped bidding. The new emphasis is on temporary structures and adaptability, and the test case is underway in Paris, which is set to host the 2024 Games.
Instead of an isolated, dedicated and ticketed Olympic Park hosting journalists, athletes, and stadiums, the Paris Games will be distributed across the city and its suburbs. Instead of a dozen brand-new stadiums, Paris is building a few, relying on temporary or pre-existing buildings for the rest. After the Games, dorms will be converted into nearly 3,000 apartments.
Paris is even expanding its subway lines for the Games and, more importantly, for the permanent use of the neighborhoods long after the Games. For the first time, the budget for construction (3.35 billion euros) is lower than the budget for the event itself (3.9 billion euros). https://www.investopedia.com/articles/markets-economy/092416/what-economic-impact-hosting-olympics.asp
In short, many countries and their cities bid tens of millions of dollars for the chance to host the Olympic games.
Many believe that the level of tourism and foreign investment that result from hosting the games can be an economic boon. Others see the games as overly expensive, leaving cities and nations with massive debts and economic woes. In other words, unlike the Games themselves, there is often not always a clear winner.
For more background on the costs and promises of the Olympics, I suggest this article: https://www.investopedia.com/articles/markets-economy/092416/what-economic-impact-hosting-olympics.asp
And if you can’t get enough Olympics, The Beijing Winter Games happen in February of 2022 (about 6 months from now).
Beijing will be the first city to host both the Summer and Winter Olympic Games, having previously hosted the 2008 Summer Olympics, and it will be the eleventh city to host the Olympic Games twice.
Due to the pandemic, this would mark the first time since 1992 that the Winter and Summer Olympics would be held less than six months apart.
