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!
About 500 protesters took part in the demonstration while carrying signs that read “We want a compact and economical Olympics” and “Reverse the 2020 Tokyo Olympics.”
“The proposed stadium is too big,” said Kazuhisa Oriyama, one of the organizers of Saturday’s protest. “The organizers of the games need to reconsider their plans and make the public part of decision-making process.”
The new Olympic stadium, which is set to replace Tokyo’s existing 56-year-old National Stadium, would seat 80,000 people, have four times the floor space of the old stadium, cost $1.7 billion to build (down from an initially planned $3 billion), and look like yikes:
If Japan does not replace this design with one that looks less like a mammoth futuristic bicycle helmet, protestors will almost certainly continue to lock arms around the stadium and hold balloons.
I don’t know exactly what tipping point we reached last week, but it appears that the entire planet came to a mass realization that mega-events like the World Cup and the Olympics, far from being massive revenue generators for host cities, are gigantic money pits that any public official should run screaming from as fast as possible. Witness, all within the past seven days:
- Philadelphia Mayor Michael Nutter withdrew his city’s bid for the 2024 Summer Olympics, calling it “a tremendous, costly endeavor,” while a top aide to New York City Mayor Bill de Blasio said he decided bidding on the Summer Games “doesn’t make sense.”
- Almost every formerly interested city has now pulled out of the bidding for the 2022 Winter Olympics, with Krakow joining Stockholm, Munich, and St. Moritz-Davos in deciding hosting the event would be too rich for their blood. The only bids left standing now are Oslo (where an upcoming referendum on hosting the Games is likely to go down to defeat), Lviv (which is in Ukraine, which has its own troubles), Beijing, and Almaty, Kazakhstan. “This is urgent,” said Norwegian IOC member Gerhard Heiberg. “We need to sit down and discuss what is going on. We are at a crossroads here.”
- The Japan Sports Council announced that it was trimming the budget of its planned $3 billion stadium for the 2020 Summer Olympics by almost half, but a prominent local architect still decried the plans as “a sin” and “a crime” for being out of scale with its surroundings.
- After the UK’s Sunday Times revealed that former Qatari FIFA vice president Mohamed bin Hammam paid more than $5 million in bribes to have the 2022 World Cup awarded to his broiling-hot-in-the-summer-when-the-World-Cup-is-played nation, FIFA vice president Jim Boyce announced that he would support a re-vote on a new host for that year’s soccer tournament.
- It was announced that Itaquerao Stadium in São Paulo, which is supposed to host the 2014 World Cup opener in ten days, will only be able to open at 62% capacity for its final warm-up match, with the fire department having refused to issue a safety permit for one entire seating area.
No, it doesn’t mean that the World Cup and Olympics are now defunct, and will be replaced by one of those sporting events that involves everyone batting a giant ball into the air. But suddenly lots and lots of people are saying aloud that these mega-events tend toward being terrible catastrophes for the locales tabbed to host them, which isn’t a new concept, but isn’t usually discussed quite so widely. Though, of course, a few months ago people were actually interested in Russian human rights abuses against lesbians and gays, until they actually started playing sports and there was curling to watch, so maybe this is just the usual “the games haven’t started, we’re bored and have nothing to report on” run-up that will be completely forgotten later on.
Washington, D.C.’s Olympic organizing committee has announced plans to … bid to host the Olympics, dummy, what do you think Olympic organizing committees do?
According to USA Today’s Kelly Whiteside (hi, Kelly!), hosting the 2024 Summer Games is expected to cost D.C. from $4-6 billion, including building a new stadium for track and field and the opening and closing ceremonies (and, possibly, for the city’s NFL team later on). Whiteside also notes that D.C. 2024 president Bob Sweeney said the city is “in a better position to host with a convention center, a new baseball park and an improved Metro system,” which might be more convincing if baseball were actually sure of being included in the Olympics.
I’ve written at length in the past about what a boondoggle hosting the Olympics has been for other host cities, so instead, I’ll leave it to U.S. News’s Pat Garafolo, who calls it the worst idea in Washington:
But what about the myriad economic benefits that will come with hosting the games? As I wrote in the Baltimore Sun last year when the prospect of a D.C.-Baltimore bid first arose, those benefits are mostly a mirage. Economist Jeffrey Owen put it this way: “To date there has not been a study of an Olympics or other large-scale sporting event that has found empirical evidence of significant economic impacts. … It is unlikely that anyone ever will.”…
For D.C. residents (myself included) there will, of course, be more parochial reasons to gripe about a D.C. bid, such as the inevitable traffic and delays associated not just with the games, but with the construction that will precede them for years on end. But the reason that non-residents should care whether or not D.C. plays host in 2024 is that the Olympics keep getting more expensive, cities keep getting less out of them, and yet lawmakers and corporate sponsors keep pushing for ever more elaborate facilities and spectacles to be foisted onto the backs of taxpayers who should be paying for new services that can make their own daily lives a little bit better.
The New York Jets Manhattan stadium plan may be long dead, but its legacy lives on in the form of “Hudson Yards,” the mixed-use development project that was supposed to surround it on Manhattan’s West Side. Back in 2005, you will recall, Mayor Michael Bloomberg succeeded in convincing the city council that key to getting tens of thousands people to shlep several blocks west of Midtown to see football, the Olympics, or whatever, was to build an extension of the #7 subway line west of Times Square. This would cost $2 billion (if you think that’s a lot, don’t get me started on the 1,500-foot tunnel in Queens that cost $645 million), but never worry, as it would all be paid off by increased property tax payments by new development on the site — that’s right, a TIF.
Except that the development still hasn’t happened, which as Juan Gonzalez reports in today’s Daily News has resulted in the inevitable consequences:
The Bloomberg administration paid $234 million during fiscal year 2012 to a city-created development group that oversees the huge new commercial and residential complex, one of the mayor’s most ambitious projects.
City Hall quietly earmarked most of that money — $155 million — to the Hudson Yards Infrastructure Corp. in late June, because the group has not been generating enough revenue to pay the annual interest due on $3 billion in bonds it issued.
Incomparable corporate subsidy reporters Donald Barlett and James Steele have tallied up the taxpayer dollars that went to the 2002 Winter Olympics, and come up with:
Many records were set at the 2002 Winter Games, but chances are that one will never be broken. That’s the amount of federal dollars that Romney and his crew siphoned out of the federal treasury to help pay for the Olympic games: $1.5 billion. That was more than the federal government had spent on all seven Olympic Games held in the U.S. since 1904—combined. In inflation-adjusted dollars…
With the help of Utah’s congressional delegation, Romney’s Salt Lake Olympic committee pried federal dollars out of more than three dozen agencies on an unprecedented scale: $500 million for highways, bridges, roads and interchanges; $30 million for parking lots; $25 million for buses; $11 million for infectious-disease monitoring, food inspection, and medical response; $2 million to house the media; $1 million for a weather forecasting system; and several hundred thousand dollars to plant new trees in and around Salt Lake City—to name only a few of the goodies.
That’s not actually all that unusual for the Olympics — massive public subsidies for the Games are a given — but it’s notable here because the guy in charge of the Salt Lake City Olympics is now running for some public office or something. And is running on a platform of cutting government spending, though not actually government spending on stuff that helps rich people and corporations.
Barlett and Steele note:
When we asked Romney in 2001 how he could justify the record flow of federal dollars to one community to stage the Olympics, he accused us of writing a “ridiculous” article and said, “Do you realize this is just an absurd bogus approach?”
No comment so far today from the Romney camp. He must not read Deadspin — which is a shame, because it means he also missed out on the best explanation of the NHL lockout I’ve seen so far.
The Washington Post has visited London shopkeepers to see how they’re benefiting from the Olympic rush, and the early results aren’t promising:
“We employed more staff because we were told millions of people were coming to London,” said Siu, 54, the manager of the Melanie Italian Restaurant, around the corner from the Palace Theater, which is staging the musical “Singin’ in the Rain.” “Now we’ve realized it’s not getting busy, and we’ll have to give them notice.”
The problem, according to the Post: Sports fans are spending lots of money in the areas around the Olympic venues, but nobody’s venturing out into the rest of London, leaving business dead there. And with non-Olympic tourists steering clear of the city and many Londoners heading out of town or working from home to avoid the crush of Games visitors, museums and theaters have been left largely empty.
None of this should be surprising to anyone who’s read the findings of economist Phil Porter (aka Sir Not-Appearing-In-This-Washington-Post-Article), who’s repeatedly found that mega-events like the Olympics don’t create much of an increase in consumer spending, because new visitors just displace other tourists.This is especially true of a city like London, which already has no trouble filling its hotels in the summer, and doesn’t exactly need the Olympics to put itself on the tourist map.
The Post does note that Athens and Beijing (though not Sydney) saw summer visitors decline the years they hosted the Games. Still, London Olympic committe CEO Paul Deighton insists that long term, “given the images of London that are being sent around the world from the opening ceremony, the torch relay and these events, it will be a huge economic boost to the capital.” If future summers see hordes of confused tourists wandering about and saying, “Where’s that torch relay we saw on TV? Oh, never mind, let’s just pop into this nice Tate Modern place,” then we’ll know it was all worth it.
More evidence that Olympic stadiums are hopeless white elephants:
The “Happy Snow and Ice Season” will run all winter at the stadium where Chinese directors staged a stunning opening ceremony for the 2008 Summer Olympic Games and Jamaican sprinter Usain Bolt set world records. Now slushy mounds of machine-made snow and a single ski slope occupy the grounds.
It’s a long way from Olympic grandeur for the Bird’s Nest, meant to symbolize China’s decades of vast economic growth and status as a new world power.
With a price tag of $450 million, the world’s largest steel structure has been called a potential white elephant, a big, expensive building that no longer serves a purpose. Its maintenance costs are $15 million a year.
Since the Olympics ended, the stadium has hosted an opera, an Italian soccer match and a Jackie Chan concert. Stadium management is also wooing Spanish soccer team Real Madrid to come play a game.
Both attendance and reviews of the Happy
Fun Ball Snow and Ice Season have been bad, with visitors complaining that the attractions don’t live up to the ads, and about the $26 admission fee with additional charges added once you’re inside. Best quote, from a Beijing dad who drove an hour to the stadium with his 12-year-old son to the stadium:
Ma [Tianjun], who drove an hour to get to the park, said he realized too late how expensive it would be. “Once you board the thieves’ ship, you can only go forward,” he said, using an old Beijing saying.
Speaking of the questionable benefits of sports mega-events, here’s another one: Public libraries forced to cater to Olympic advertisers!
An internal memo obtained by The Tyee advises Vancouver Public Library branches to protect Olympic sponsors.
“Do not have Pepsi or Dairy Queen sponsor your event,” read guidelines sent to VPL branch heads and supervisory staff last fall. “Coke and McDonald’s are the Olympic sponsors. If you are planning a kids’ event and approaching sponsors, approach McDonald’s and not another well-known fast-food outlet.”
VPL marketing director Jean Kavanagh added that the ban extends to such things as audio-visual equipment made by non-sponsors: “I would get some tape and put it over the ‘Sony.’ Just a little piece of tape.”
The city of Vancouver says this is the library’s call, but given that it already passed its own legislation banning “unauthorized” signs near Olympic venues, it’s kind of abandoned the moral high ground here.