Why would anyone want to host the Olympics? Pretty soon, it will only be mad dictators lining up to host the great games.
How do you think the Brazilian government is feeling about the Olympic games right now?
There’s so much fanfare around the selection of the Olympic city – so much excitement, jostling and bribes. But is it worth it? Does it even come close to being worth it?
For Brazil, the Olympics was meant to mark their promotion to first world status. When they were awarded the Olympic games back in 2009, the economy was booming on the back of a commodity boom. Brazil had jumped up the leaderboard to be the sixth largest economy in the world.
The future looked Brazilian.
By then commodity prices collapsed – and its two biggest export earners – minerals and sugar, were hammered.
(Fun Fact: Australia’s total sugar output is less than the statistical error estimate on Brazil’s estimated output.)
And like all booms it had left Brazil with a hangover of dud investments. And so by the time the games rolled around, Brazil was mired in recession.
Talk about awkward timing.
And that timing has made the massive financial burden that comes with the Olympics feel all the more heavier. And it’s hard to justify billions on a new stadium when your teachers aren’t getting paid.
The Olympics can be massively expensive. The Athens Olympics cost the Greek government about $16 billion – accounting for a full 5% of total government debt!
And the Olympics always costs more than you think. Always. A recent study found that Olympic costs always blew out by between 4 and 10 times the original estimate.
Think about that. The best case scenario is that it costs you 300% more than what you had budgeted for.
(Handball that one on to the future generations.)
But that cost doesn’t include the dozens of white elephants that get built in the process. Brazil still has an overhang of massive stadiums from the World Cup. One stadium, which has a capacity for 40,000, has been given to a team that pulls 1,400 on a good day.
But massive stadiums are expensive to maintain. There’s complex drainage and sewer systems. Air-conditioned change rooms. Gardens and car parks.
And most sporting infrastructure isn’t really re-purposable. What are you going to do with an Olympic velodrome? Flood it and turn it into a massive aquarium?
These white-elephant costs are the true ‘legacy’ of the Olympics.
But the expense is worth it right? These things are huge money spinners right? Well, no, actually.
Of the 17 Olympic tournaments held between the Second World War and 2012, only one of them – the Los Angeles Olympics in 1984 – actually made a profit.
Even London ran at a loss. David Cameron was saying the games was a financial success, but only if you included estimates for future business consulting to future host cities – i.e, if you just made stuff up.
London, already a tourist Mecca, actually saw a fall in tourist numbers during the games, and business saw reduced flows of traffic as locals stayed home.
And this is all before we include ‘legacy’ costs. So there’s no financial case for hosting the games.
The IOC has to take some of the blame here. The IOC has gouged out more and more revenue from the local hosts (see chart). At the same time, they tend to favour hosts who promise to build flash new facilities, rather than leveraging off existing ones. That means they are biased towards more expensive games.
Ok, so the games is a financial disaster. But what about the glory? Surely there’s all that national pride and brand recognition.
Well, how do you think Brazil is feeling about that now?
News and social media aggregators love disaster stories – and Rio has been full of them. From the green “fart-smelling” diving pool, to body parts washing up on the beach volley-ball venue, you get the impression it’s a total cluster-smurf.
To be fair, these incidents are probably blown out of proportion, and a great chunk of the Olympics is running smoothly, but that’s the way the media works. Good news never made a paper sell.
And what about the tourism pull – a benefit that supposed to live on long after the closing ceremony.
Well, I know I’m pretty well travelled, but I would of thought Rio of one of the most famous cities in the world already. Its not like it needs to be put on the map.
And so the question is what do we know about Rio we didn’t already? Well, for me, it’s that the recession is getting out of hand, there are armed gangs roaming about the place, and the bay is full of human faeces.
Sell it baby.
So it brings me back to the question – why would you ever want to host an Olympics?
And I think people are waking up to the waste of money that it is. 12 different cities bid for the 2004 Olympics. The 2020 round drew just 5. Currently there are only two cities in the running for the 2022 Winter Olympics – Beijing and Almaty, Kazakhstan.
In the near future, no sane city will want to host the Olympics. All we’ll get is tin-pot dictators with delusions of grandeur looking to fluff their egos.
Which, to be fair, is kind of what we get now, with tin-pot elected officials putting future generations on the hook for huge bills, in order to fluff their own egos. But now people are wising up to it.
It would be a shame if we went down this road. But if we’re going to avoid it, the IOC needs to stop selling itself as one of the jewels of civilisation. From what I’ve seen of the IOC, I don’t think they have the humility.
Here we come Angola 2024!
Can the Olympics ever be more than a way for dictators to get into dict measuring contests with each other?