NY Times still asking if the Olympics pay off, five years after answering own question

The New York Times investigated the pressing question of “Does Hosting the Olympics Actually Pay Off?” this week, and discovered exactly the same thing everyone else ever has found: There’s pretty much zero evidence that any Olympics has helped any city, ever, anywhere.

Even though Brazil, like other recent hosts, has sought to make stadium spending more palatable by also building general infrastructure, like highways and airports, the public would derive the same benefit at far less cost if the transportation projects were built and the stadiums were not. The Los Angeles Olympics were successful, after all, because planners avoided building new stadiums. Barcelona, long neglected under the rule of Francisco Franco, was in the midst of a renaissance that would have probably occurred without the Olympics.

Organizers and their supporters routinely neglect what economists call “opportunity costs” — in this case, what might have happened if a country didn’t host the Games. In some of the world’s most expensive cities, perhaps the greatest opportunity cost is the loss of scarce and valuable real estate. While many facilities remain in use after the Games or are converted for new purposes, quite a few sit virtually as empty as the original in Olympia, Greece. Tourists can ride a Segway around the Bird’s Nest in Beijing for $20.

Similarly, it’s misleading to calculate how much money is spent in a city during the Olympics. A fair comparison requires some estimate of how much would have been spent without them. When the Games come, after all, other kinds of tourism go. During the 2012 Games, the Adelphi Theatre in London’s West End suspended performances of “Sweeney Todd.” The British Museum received 480,000 visitors that August, down from 617,000 the previous year. Indeed, Britain received about 5 percent fewer foreign visitors in August 2012 than it did in the same month the previous year. Those who showed up spent more, sure, but London spent billions of dollars to lure them. “If Boston hosts the 2024 Olympics, there’s no doubt that [the city] is going to be overrun with sports tourists,” said Victor Matheson, an economist at the College of the Holy Cross in Massachusetts. “But Boston is already overrun with tourists in the summer.”

The article is actually a good overview of all the reasons why the Olympics are a massive money suck for host cities, but having the headline in the form of a question is pretty unforgivable — especially when the Times’ “Room for Debate” page asked the exact same question five years ago and came to the exact same conclusions. Here’s a suggestion for the next Times investigative story: “Can Overwhelming Evidence Get the Times to Make a Declarative Statement Even When It Might Anger Powerful People?” It would work just as well under Betteridge’s Law!


7 comments on “NY Times still asking if the Olympics pay off, five years after answering own question

  1. Blaming the NY Times for putting this in the form of a question seems awfully silly. It is a legitimate question, even if some people (like you, Neil) are sure they know the answer.

    After the 2004 Olympics Michael Bloomberg said “without the looming deadline of the Olympics, Athens never would have gotten around to building a new airport.” He may be right about that (and he may be wrong) but it shows why the headline should be in the form of a question.

  2. Looking at the Olympics as a means to improve public infrastructure is a puzzling way to look at the issue, given that many economists believe the massive building frenzy for the 2004 Olympics increased Greece’s vulnerability to the financial crisis a few years later (and left it with little of practical use afterwards). Greece may well have been better off today without the Olympics and without the airport (or putting the airport off by a few years).

    This is just a nice subset of arguments which like to “credit” a stadium’s construction with “revitalizing” a neighborhood while ignoring the often lengthy list of other factors (increasing wealth, improving job market, interest in living downtown, etc.) that are the real factors in driving urban development.

  3. The headline in the form of a question is a way to play nice with the IOC, one elitist outfit soft punching another. After all NYT doesn’t want to lose prime access at the games, no different than asking non-threatening questions to a powerful politician. IOC has been punitive to outlets who don’t kiss their butt.
    As far as Boston staging the games, that’s a bigger joke than the NYC2012 debacle. It’ll make the big dig look like child’s play no matter what the pol’s looking for a piece of the action will spew.
    For any city that’s looking at the “you pay and we play” quadrennial boondoggle – RUN AWAY FROM IT AS FAST AS YOU CAN!

  4. Articel on Yahoo on 10 year anniversary of Greece Games and its effects on the economy

    http://sports.yahoo.com/news/ten-years-athens-2004-gives-greece-little-cheer-102555878–oly.html

  5. “Can Overwhelming Evidence Get the Times to Make a Declarative Statement Even When It Might Anger Powerful People?” Exactly. The Guardians of the Status Quo, I dropped my subscription and stopped reading the NYT years ago. I don’t even read their book reviews anymore.

  6. The article is good but leaves out some key points. Whether or not the specific Olympic-related spending was “only” 11 billion Euros (after being projected for about 4-5 billion), spending for the Olympics (in terms of infrastructure, etc) was also high and worsened Greece’s financial position. the fact that Greece waited until they were in the Euro to start the extra spending meant they had to spend a lot more for these infrastructure projects because of round-the-clock work, etc.

    In opposition to what the PR-guy says, the Olympics did little to “promote” Greece, so its hard to say following governments squandered much of any goodwill. The event was marred by transportation difficulties (its hard to move quickly and often in a country made up of islands), low tickets sales for some high-profile events, and widespread accusations of price gouging by hotel operators. If anything, the tourist experience of these games accelerated the movement of tourism away from Greece and towards places like Croatia.

    If you need an airport, build an airport. Don’t wait for the Super Bowl.

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