Olympics go 90% over budget on average, prospective hosts say, “La la la, we can’t hear you”

Since the start of the Rio Olympics, media coverage of the controversies surrounding the games has mostly been limited to things like the algae-polluted diving pool, turning attention away from the widespread protests in recent months against the Games themselves and their costs. (This is a bit of a tradition: The 2014 Winter Olympics in Sochi were widely considered an unfathomable scandal, until the events began and suddenly everyone forgot about the caviar highway and the anti-gay laws.) So it’s nice to see Fivethirtyeight turn its attention to what a massive money suck the Olympics have become, not just for Rio but for any city that hosts them:

By the time Vanderlei de Lima lit the Olympic torch at last week’s opening ceremonies, the country had already spent some $4.6 billion on venues, administration, transportation and the like, putting the games roughly 50 percent over budget. By the time the games close on Aug. 21, the tally for the games will likely be higher still.

But it could be much worse. The 2014 Winter Games in Sochi blew their budget by 289 percent. The 1980 Winter Games in Lake Placid overtopped projections by 324 percent. And the 1976 Games in Montreal ran a staggering 720 percent over projections; the city spent three decades paying down the bill. While outliers such as these distort the average cost overruns somewhat (176 percent for Summer Games, 142 percent for Winter Games), the median cost overrun for all games for which we have data is 90 percent, making Rio’s cost overrun somewhat lower than the historical norm, at least so far.

Those numbers are all from a new study by Bent Flyvbjerg of the University of Oxford, and are right in line with past estimates of the Olympics’ inherently massive cost overruns. The reasons why are simple: Construction projects of all kinds often go over budget, and when you add in the fixed deadlines for Olympic venues — you can’t just delay the swimming events if the stadium isn’t ready — it’s a recipe for inflated costs.

That said, what we should care about here isn’t really how badly Olympic organizers underestimate the costs of hosting the games, but whether cities lose money in the end on hosting them. And though Fivethirtyeight buries the lede a bit here, it eventually notes that the numbers on that count are if anything even more dismal:

Host cities almost invariably fail to cover Olympics costs with associated revenues (for instance, in 2012 London took in $3.5 billion in revenues and shelled out something like $18 billion to host the games), leaving them with piles of debt and various useless venues. Research has repeatedly shown that in most cases the Olympics are a money loser for cities, particularly those in developing nations where the cost-benefit proposition tends to skew even worse.

The Rio Games will likely be cheaper than other recent Summer Olympics, but still cost Brazil several billion dollars, in exchange for a hoped-for boost in tourism that other cities have found never arrives. You’d hope that all this would make cities think twice before looking to host the 2024 Summer Games, the next ones up for bid, but you would be wrong. At least we’ll always have Oslo.

Losing key to stadium is least embarrassing thing about Rio Olympics

Okay, so yes, ha ha, the organizers of the Rio Olympics forgot to bring one of the keys to the Maracanã Stadium for the opening event, a women’s soccer match between Sweden and South Africa, and had to call in the fire department to bring bolt cutters to open the gates. Look, hilarity!

All things considered, though, this one screwup really should be overshadowed by the ways in which the Rio Games are a far more massive screwup — not just because of incompetence, but because putting on an Olympics is a massively expensive undertaking that has doused city after city in red ink. (Chicago, which was runner-up to Rio for getting the 2016 Olympics, is currently congratulating itself on having dodged a bullet.) Brazil is expected to end up spending between $12 billion and $20 billion on hosting the games, a figure that they’ll never ever make back on Olympic revenues, especially given both Zika fears and the proven effect that the Olympics make everyone not there for the Games clear out of town for three weeks. And it’s hard to envision Rio even doing too well in terms of publicity (if anyone really needed to be told about Rio — it’s already the subject of two movies about adorable talking parrots, after all) when the enduring image of the Games could be athletes swimming through raw sewage.

Of course, once the opening ceremonies kick off tonight, all will likely be forgotten, at least in the official coverage of the Olympics. But as much as it’s fun to laugh about Rio, just as we previously laughed about Sochi’s caviar highway, remember that those firefighters who had to cut open the Maracanã had just been through layoffs to help pay for, among other things, Olympic debts. Now that’s comedy! Or maybe that other thing.

Rio velodrome might not be ready in time for Olympics, feel free to panic if bike racing is your thing

Speaking of sports venues that may not be ready on time, that Rio Olympics velodrome, man:

Tecnosolo, the construction company in charge of the velodrome, declared bankruptcy on Monday, causing the city of Rio de Janeiro to cancel its contract and hand it over to a different construction firm. The city government has said that construction is 88 percent complete, which is probably an optimistic estimate, given the flood of bad press they’ve been under for the entirety of 2016.

The Olympics start in ten weeks, so this is pretty much officially a crisis. That is, assuming the Olympics don’t get moved somewhere else or delayed thanks to Zika virus or Brazil’s political crisis, which lots of people think would be a good idea but isn’t going to happen — the Olympics must go on, even if athletes are afraid to show up or have to race their bikes in the street.

Tokyo’s new Olympic designs are $700m cheaper, look less like potty seats

Tokyo has officially scrapped its $2 billion dollar 2020 Olympic stadium that looks like a potty seat, and replaced it with a pair of somewhat cheaper ($1.2-1.3 billion) designs that look significantly less like potty seats:

n-stadium-z-20151215-870x592As Gizmodo notes, both redesigning a stadium in response to public pressure and releasing possible designs to the public for vetting before a winner is chosen are potentially promising actions, especially in the world of overpriced Olympic stadiums. Though Gizmodo also writes that the original design had “cauterized locals” to march against it, so maybe the locals started fighting fire with fire.

LA Olympics plan facing backlash over same overrun guarantee that sank Boston’s bid

Los Angeles Mayor Eric Garcetti said last week that he’ll sign the International Olympic Committee’s pledge to cover any cost overruns if the 2024 Olympics are held in his city, saying any bid would be “dead on arrival” without it. The L.A. Times editorial board, for one, is displeased:

[U.S. Olympic officials] know they need L.A. more than L.A. needs the Olympics.

But does Garcetti know this? We’re not sure. Last week, Garcetti said he’s pushing hard to be the American bidder for the Games, and that’s good. But he wouldn’t even consider playing hardball when it comes to the requirement that the city guarantee to pay any cost overruns. That’s not so good.

The mayor and his Olympic advisors say Angelenos shouldn’t worry, as Bostonians did, about paying for cost overruns because there won’t be any. Period. The city just can’t lose, he said.

Where have we heard that before? Oh yes, Montreal’s mayor said something similar just before his city incurred $1.5 billion in debt for staging the 1976 Summer Games.

Now, there are indeed some reasons to hope than an L.A. games could avoid some of the worst of the red ink that has befallen other Olympics: The city does have a lot of existing venues, for starters. Still, the number of Olympics that haven’t lost money is so vanishingly small — the only one in recent memory is the 1984 Olympics in L.A., which notably got an exemption from the overrun guarantee — that it’s worth being cautious. And with fewer and fewer cities willing to take on the risks of being a host city, this might well have been a good time to call the IOC’s bluff on this.

That’s apparently not going to happen, at least not this time around in L.A. (Unless the L.A. city council does an end run around the mayor and gets a public vote banning any public spending on cost overruns, as it did before he 1984 games.) Still, it’s interesting to see pushback growing to the IOC guarantee requirement — first in Chicago over its bid for the 2016 games, then with Boston, and now in L.A. It’s likely to be a while before the world runs out of mayors more eager to be the politician who landed the Olympics than the politician who stood up to them, but as I said in my own L.A. Times op-ed last month, the Olympics are supposed to be about chasing big dreams, right?

Japan issues guidelines for cheaper Olympic stadium, doesn’t include actually making it cheaper

The Japanese government has issued guidelines for designing a new Olympic stadium that isn’t as insanely expensive as the one they scrapped last month:

Japan on Friday approved guidelines for its new Olympic stadium, vowing to build an “athlete’s first” stadium as cheaply as possible and complete it by March 2020, a year later than planned, but without including any cost estimates or limits.

Great start, guys!

Prime Minister Shinzo Abe also announced that “We should make a structure that will emotionally move people all over the world,” which the original design certainly managed to do. Hilarity is an emotion, right?

 

Beijing to host 2022 Winter Olympics, probably should just host all Olympics from now on

Beijing has been chosen to host the 2022 Winter Olympics, defeating Almaty, Kazakshtan in a two-city race after every city you’ve actually heard of dropped out. This will make Beijing the first city to have hosted both the summer and winter games, which is interesting from a trivia perspective I suppose, and the second city where there isn’t really any snow to host a Winter Olympics. (Events requiring actual winter will be held 100 miles away in Zhangjiakou.)

If there’s an upside here, it’s that at least Beijing already has lots of event spaces left over from the 2008 Olympics that can be repurposed for 2022, and presumably has already evicted everyone necessary to make way for the Olympic Village and such. In fact, once Beijing has a full set of Olympic venues for all seasons, maybe it would be best just to let it have the Olympics permanently, as Chris Dempsey of No Boston Olympics suggested earlier this week in my article for Vice:

Dempsey, for one, dreams of a day when the Olympics will just settle down in one place and put this orgy of beach-volleyball-stadium-building to an end. “Since 1896, we’ve invented the radio, TV, the internet, air travel,” he says. “You’re in a world now where 99.9 percent of people watch it on a screen. And the vast majority of the other people who are going to be there will fly in to see it. So they could really fly anywhere in the world for it — they could fly the same place every four years, and you could build this stuff once and not have to worry about with these massive capital and infrastructure costs.”

Sure, China has a terrible human rights record, but clearly the IOC doesn’t care much about that anyway. It would mean North America and Europe watching lots of events in the middle of the night or on tape delay, but we do that regardless, and who’s to say that Asia’s huge population doesn’t deserve to watch the Olympics in their own time zone? If Beijing wants to be Olympic City, I’m all for it, so long as it spares the rest of the world’s cities the headache. Now we just need to do something about the World Cup.

Boston doesn’t want your stinking Olympics, should any city?

I’m sure you all caught this already, but Boston’s 2024 Olympic bid imploded spectacularly on Monday, with Mayor Marty Walsh declaring that he wouldn’t let the USOC rush him into signing a guarantee to cover cost overruns, and the USOC promptly declaring that it was withdrawing Boston as its chosen bid candidate.

It was all very sudden, but, as I wrote at Vice Sports yesterday, not entirely unexpected given how poorly the bid was going so far:

All the talk about ballooning costs not only worried Boston residents — who were mostly opposed to hosting the Olympics from the start — but garnered opposition from more than a few local elected officials, the sort who typically fall into line once there’s sports to be chased. Boston city councilor Tito Jackson had already announced he planned to subpoena Boston 2024 for more financial details; Massachusetts Gov. Charlie Baker, meanwhile, hired economists Brad Humphreys and Allen Sanderson — both notedskeptics about the benefits of sports construction — to put together that report on whether the Boston bid numbers made a damn bit of sense. (One hopes we’ll still get to see it, as it would be fun reading, though the governor may end up deciding that would be rubbing salt in Boston 2024’s wounds.) Walsh, in all likelihood, merely put the final nail in the coffin with yesterday’s announcement, though he certainly did it with gusto.

The question now is whether the USOC will put forward a candidate at all for 2024 — the deadline is September 15, which doesn’t leave much time to revive a candidate from the ashes, though they’ve already put in a call to Los Angeles — and whether we’re entering a new era of cities steering clear of the Olympics as a nightmarish money suck, after most of the 2022 Winter Games candidates withdrew for that reason. Writing in the Guardian, Les Carpenter suggests that that would be an excellent idea:

The internet is clogged with slide shows of empty, broken, useless stadiums built in the euphoria of a coming Olympics or World Cup then abandoned soon after, allowed to fill with weeds, rodents and other signs of human escape. Is there a better sign of Greece’s collapse than a pile of useless sports facilities crumbling since the torch went out in the summer of 2004? What use did Athens have for a baseball stadium anyway? It’s crumbling among the weeds just like the field hockey venue, the canoeing center and the training pool green with algae…

After Rome, Paris, Hamburg and maybe Toronto or Doha – all fighting to host the 2024 Games – the list of Olympic hopefuls may quickly dwindle until only bidders will be places like Beijing or Qatar or breakaway Soviet republic. These are places that won’t need to worry about local opposition when writing checks in the name of national pride. The concept of getting one big city to compete against another, with each promising more extravagance is probably an old one.

Of course, that’s still plenty of cities to keep the Olympics in business, though at some point the IOC may have to reduce its lavish demands a tad if it finds no takers. (Or gets tired of holding all its Olympics in China.) After all, the last time cities started bailing on the Olympics, after the financial disaster of the 1976 Montreal games, Los Angeles ended up the host by default, despite a plan that built no sparkly new facilities at all. We’re not there yet by any means, but the 2026 and 2028 bid processes are going to be real interesting.

Japan changes course, won’t build $2B Olympic potty-stadium after all

Holy cow, Japan’s war of cartoons against their $2 billion Olympic stadium actually worked:

Three years after Japanese Olympic organizers selected a vast, sleek stadium design by a prominent Iraqi-British architect for the centerpiece venue of the 2020 Summer Games, the government announced on Friday that it would scrap the plan and start over because of spiraling costs…

“The current plan will go back to being a blank sheet of paper, and we will rethink it from scratch,” [prime minister Shinzo] Abe said at a news conference.

This just two days after Abe said there was no way he was going to change the design, because there’s only five years left before the 2020 Summer Olympics, and that’s too short a time to come up with something cheaper, somehow? But that was before this:

x3dgqr93vluqumudThe new plan is, well, a blank piece of paper, so no one knows what it will look like or how much it will cost. Reuters reports that Abe “made no mention of costs and whether this meant another competition for a design, or if another design from a 2012 competition would be used.”

Anyway, this kind of thing happens from time to time — the Brooklyn Nets were originally going to have an arena designed by Frank Gehry, recall, until it turned out to be too crazy expensive and featured an office building next door that looked like a stack of post-apocalyptic milk crates. The hope is that Japan can now come up with something both cheaper and less ugly, though the precedent here isn’t exactly promising.

Tokyo’s 2020 Olympics stadium now set to be priciest, ugliest in history

I haven’t been providing updates on Tokyo’s butt-ugly 2020 Olympic stadium, mostly for lack of time, so let me remedy that now: Japanese prime minister Shinzo Abe says it’s too late to change the design, and also the price tag has now risen to a breathtaking $2 billion, making it the most expensive stadium the world has ever seen:

What is the money buying? The design of the stadium’s ribbed roof on huge steel arches resembles a bicycle helmet. To support a natural grass field, the roof’s southern end will be translucent to let in sunlight and underground will be soil ventilation and temperature control systems. Movable seats will bring the crowd closer for more intimate events, and this being Japan, the stadium will have earthquake-resistant features…

Andrew Zimbalist, an economics professor at Smith College in Massachusetts, added that he suspects the cost will rise further during construction, which is due to begin in October.

Despite widespread popular opposition to the plan, it looks like the stadium, and its soaring price tag, will go ahead as scheduled. At least it’s given the Japanese public the opportunity to create lots of macros comparing the stadium to a potty seat, and who can put a price on that?