The Olympic Games fear

Rio 2016 is over; in 2020, Tokyo will host the Olympic Games. What’s after Tokyo? Nobody knows yet, and it’s the case to add a long imaginary awkward silence afterwards.

Despite there being a list of possible cities that could host the event in 2024 (Paris, Rome, Budapest or Los Angeles), the truth is that the IOC is struggling and facing a very hard time in finding future Olympics hosts.

For instance, Los Angeles has placed its candidacy after Boston’s surprising pullout. Hamburg, in the last minute, said “no, thanks” to the IOC, after having previously confirmed itself a candidate. Also, while there are still some countries that are offering themselves for a collaboration to host the Summer Games, the situation gets even worse when it comes to the Winter Olympics. In this case, only Beijing and Kazakhstan bidded, and IOC has had to beg Norway which has denied the request, protesting against the high costs to host an Olympic Games edition and the IOC-members’ requests, which were apparently a bit too ridiculous for the Norwegian government (so Beijing will host the 2022 Winter Olympics).

So, why this mutiny? Why is there no more enthusiasm or pride into the possibility of being the next Olympic Games home? Think for a second, yes you’re right: money.

Over the years, the mechanism to host the Olympics has been clearly defined, and it’s not that promising. Basically, the country chosen by the IOC has to face increasing expenses to renovate, build, build and build over and over again for four years (under IOC rules, each host city has to build brand new sports venues). However, while frittering away billions and increasing public debt (a nightmare for every country after the 2009 economic crisis), the country lives with the hope that it will be able to pay off these expenses by selling tickets, tourism and selling the rights to distribute the Games to television networks worldwide.

Unfortunately, there’s nothing more evanescent than this scenario and the history of the Olympics can confirm this. In the past, the list of cities that have ended up with debt is way longer than the list of cities that have earned something or, at least, equalised the expenses.

For instance, there’s Toronto in 1976. The estimated costs to prepare the city for the Games were around US$250 million and over the time, they snowballed to US$2 billion. To face this unexpected situation, the Canadian government introduced a special tax on tobacco, and it only managed to extinguish their debt in 2006.

The Toronto case reflects the situation of almost every city that has hosted the Games.

There is a special case though: Los Angeles in 1984. The city has effectively ended up intact after hosting the Games, thanks to the city’s director and general manager of the organising committee, Peter Ueberroth.

When LA was chosen, the situation was pretty clear: he had to realise everything without receiving any help from the public administration. That’s because after the big fiasco of the Olympic Games in Moscow in 1980, it was boycotted by the U.S, West Germany and 60 other countries; nobody wanted to host the Olympics anymore and, for the 1984 edition, only Los Angeles proposed itself.

Of course, the IOC has had to accept all their conditions and within those, LA inhabitants demanded that no public money was to be used (to avoid the possibility of facing another Olympics like the one in Moscow).

IOC modified its statute and accepted that the expenses for the Olympic Games were paid by a private society. Ueberroth worked hard not to exceed a certain amount and he was even able to sign an amazing US$225 million deal with ABC for television rights. Pretty much a happy ending.

Unfortunately, this case is rare and almost inimitable. The truth is that the Olympic Games are paid for with public money and that expenses are so large that they can’t be compensated with anything. Aside from the big opportunity, the honor and pride that an Olympic Games can be for the hosting city, there is nothing more that it can receive because sadly, honor doesn’t pay in cash.

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