With so many cities pulling out of the Olympic bid process because of predicted financial loss and disillusionment, why do the latest hosts think they can make a success of it?
Paris and Los Angeles have recently been announced as that the hosts for the 2024 and 2028 Olympics Games respectively. Both cities have held the Games on two occasions previously, with Los Angeles playing organisers as recently as 1984, but key to recent bidding processes for major sporting events has been the growing awareness and acceptance of the financial burden that hosting brings with it.
Cities and bid teams love to talk about legacy, but such promises rarely deliver. Such projects include the creation of jobs, as well as the improvement of facilities and infrastructure such as local transport, but are often fraught with over spending, poor planning and a lack of long term strategy.
According to one study, by Bent Flyvbjerg and Allison Stewart a Oxford University, which looked at the financial costs of the Summer Olympic Games between 1960 and 2012, they found that ‘the Games overrun with 100 per cent consistency. No other type of mega project is this consistent regarding cost overrun, with an average cost overrun in real terms of 179 per cent – and 324 per cent in nominal terms’.
Five cities were originally announced in September 2015 as candidates in the bidding process for the 2024 Games, with Los Angeles and Paris joined by Rome, Budapest and Hamburg, but the latter three withdrew their bids at various points in the process. Similarly, for the 2022 Winter Olympics, Oslo, Krakow, Lviv and Stockholm all withdrew their bids, leaving just Almaty and Beijing (which was eventually selected to host).
For the 2024 bid, Hamburg withdrew a little over two months after being announced as a candidate, with the city’s residents deciding themselves in a public vote and 51.6% deciding against. After the result the city’s No campaign declared: ‘The people of Hamburg want a city policy that is geared to the basic needs of the population, rather than focusing on global events or flagship projects’.
In September 2016, Rome’s city council voted against their Olympic bid. Italian Prime Minister Matteo Renzi was keen for his country’s capital to host, but the city’s mayor, Virginia Raggi, believed the bid was irresponsible and ultimately helped ensure the withdrawal happened. Raggi came to office in June 2016, set with a task of improving a city laden with debt, corruption and poor infrastructure. For her, the idea of spending $5.2 billion on hosting the Games was a non-starter.
Then in March 2017, Budapest became the third city to pull out. With the number of Hungarians against the bid increasing, Budapest’s City Council formally annulled the bid before notifying the International Olympic Committee (IOC). Among the concerns, their NOlimpia petition campaign believed ‘the unaffordable splurge that would invite corruption’.
Athens, in particular, seems to have have scared people off. Hosting the 2004 Olympics, at best, ended up costing €9 billion ($11 billion at today’s exchange rate), at worst, arguably began the decline of Greece’s economy. Over a decade after playing host at sport’s grandest dinner party, the country has experienced a depression, as well as record levels of homelessness and unemployment, all the while the venues built for the Games sit idle, abandoned and falling apart – each one a very real and literal example of blind, unrealistic ambition, painfully apt for the country that gave us the story of Icarus.
With such a clear pattern emerging, it raises the question of why Los Angeles and Paris have been so committed to the process? What is it that they believe they can do differently to avoid another Athens, or even Rio for that matter, happening to them. If a city wants better roads or an improved airport why not spend the money on that directly? Spend the money on the things you want improve, rather than hosting the world’s biggest party that really only benefits the the lining of the IOC’s pockets.
Resources play a huge part. LA’s mayor, Eric Garcetti explains, ‘voters in LA County have approved $120bn for investments in transport over the next four decades, one of the most ambitious public works in US history and voters also approved $3.5bn to tackle homelessness. I don’t know of another place in the country that has those resources’.
LA is on the up. Two football franchises, the Rams and the Chargers have returned to the city, from St Loius and San Diego respectively, and will share a new stadium. There is a concerted effort to find alternatives to LA’s notorious traffic problem, with greater transport links promised by Garcetti. Key to the potential success is that the city has all the venues it needs already in place, with stadia and facilities already at a world class level and athletes able to use UCLA’s dormitories, rather than building a new Olympic village. It was also the last host city to generate a profit, in 1984, when it brought home $225m overall.
Similarly, for Paris, plenty is in place. With the likes of the Stade de France, Roland Garros and the Grand Palais all ready to go, plenty is already covered. Paris’ transport system is also already very good, and is set to get better, with a €25 billion development underway. Paris will hope that the development of an athlete’s village will help aid regeneration in deprived areas, similar to London and its East End after 2012.
The lesson to be learned for the French, however, is not to simply to displace local residents for only those that can afford the new properties, something that highlighted London’s consistent and developing problems regarding gentrification and, for want of a better term, social cleansing.
The positive in the bid process appears to be that those physically and financially unable to follow through and deliver such a huge project without it putting their economy into real jeopardy – or at least admitting that it will – have had the foresight, and the power to follow through, in putting a halt to proceedings, rather than simply pissing into the wind and pretending you’re not getting wet.
Paris and LA will now have to go some way to ensure their Olympics are successful. Bucking the recent trend only highlights the negatives involved, but they seem as well placed as any of the last 20 years. Only London could claim its 2012 effort was a success, but even that was more show than substance, and as for its ‘legacy’, Londoners are still searching for that bit.
Short of restructuring the entire process (having one permanent venue, or partially moving the financial risk onto the IOC as much as the host cities, for example) the same obstacles will remain. Good luck to LA and Paris in their Olympic Games, few things in world sport are more difficult to get right.