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The Olympic investment: What do cities get out of hosting the Games?

Cities scramble to bid for a hosting, but not all of them enjoy their ROI
By Immanuel Canicosa |


 

The Olympic Stadium in Montreal, Quebec stands out among all the other structures in the city’s Olympic Park. It includes a tower, the world’s tallest inclined structure, and has the capacity to seat more than 56,000 people, the highest in Canada. One of its two nicknames is “The Big O,” a reference to the donut-shaped appearance of the stadium’s roof.

 

The stadium was used as the main venue for the 1976 Summer Olympics. The problem was, parts of the stadium, such as its roof and the tower, were not completed until 1987 due to several factors. The 1976 Montreal Olympics began with the stadium half-finished. Construction started in the 1970s, when it was projected to cost US$ 71 million, but it was only fully paid by the city in 2006, and its cost had risen to a staggering US$ 700 million. This is what earned the stadium its second, unflattering nickname, bestowed by the city’s taxpayers: The Big Owe.

 

The stadium still stands today, the tower resembling a giant insect, the stadium a turtle’s shell. Not so much a monument as a warning about the financial burden that comes with hosting the Olympics.

 

 

The rough road to Rio

And yet, cities are still lining up for the chance to host the Games. In October 2009, Rio De Janeiro bested six other cities and won the right to host the ongoing 2016 Summer Olympics, the first to be held in South America. The road to the Rio Olympics, however, has been anything but smooth, with a recession, an outbreak of the Zika virus, and above all, a difficulty to gather funds. All these plagued the city’s preparation for the Games.

 

Before the Games, officials predicted that the Olympics (both the Summer Olympics and the Paralympics) would cost roughly US$ 3 billion. However, by the time the elaborate opening ceremonies had begun, the city had spent more than US$ 4.6 billion, exceeding their projected budget by nearly 50 percent. This number, however, pales in comparison to the cost overruns of previous Olympics, such as Athens (60 percent), Barcelona (417 percent) and Montreal (around 800 percent).

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Cost overruns have become an unsurprising and even expected trend when it comes to hosting the Olympics. And once the Olympic torch is extinguished, once the last firework has illuminated the city’s night sky and the athletes have gone home, attention will turn to the legacy and the impact of the Olympics on the city of Rio De Janeiro.

 

 


Great expectations, unfulfilled promises

Seven years ago, as the hosting rights for the 2016 Olympics hung in the balance, Rio De Janeiro’s bid committee focused on giving South America the chance to host the Games, while also highlighting celebrations as a part of the lifestyle of the city’s people. The Olympics, officials said, offered a chance for social integration through different programs.

 

Promises were made regarding the lasting legacy of the Rio Olympics. Improvements on the city’s security, public transportation, housing and tourism were seen as its biggest potential benefits. The facilities that will be built for the Games will be used to train the country’s athletes to prepare them for international competitions. Sewage in areas such as the Rodrigo de Freitas lagoon and the Guanabara Bay will be treated as part of an effort to improve the city’s environment.

 

However, not all of these promises have been met. Violence has continued and even increased in Rio’s favelas or slums during the Olympics, with an average of 4.8 people wounded daily by gunfire. It was promised that 80 percent of the city’s sewage would be treated by the time the Olympics are finished, but the actual number is close to only 60 percent, according to environmental experts.

 

 

Not all gloom and doom

Despite the issue of overspending, other stagings of the Olympics have actually been seen as successful. The 1992 Olympics helped improve Barcelona’s infrastructure and tourism, stemming its decline and turning it into one of Europe’s most visited cities. Beijing hosted the 2008 Olympics as a way for the Chinese to introduce themselves to the world stage, and, for the most part, that goal was achieved.

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When it comes to the Games, another advantage of hosting the Olympics is the automatic seats given to the host country’s teams and athletes. For instance, Brazil’s volleyball and basketball teams automatically qualified for the 2016 Olympics without going through arduous qualifying tournaments that take away precious time for preparation.

 

Any athlete will tell you that playing in front of their home crowd has a positive impact on the way they play, and this is something that has translated in the medal tallies for host nations. China won just 63 medals (32 golds) in the 2004 Athens Olympics and finished second overall behind the US, but won 100 medals (51 golds) in the 2008 Beijing Olympics, enough to pull ahead of the Americans and finish first overall. Great Britain won just 47 medals (19 medals) in the 2008 Olympics, but won 65 medals (29 golds) four years later in London.

 

And for the most successful Olympians, business comes in the form of sponsorships and endorsements, for as long as the public values their celebrity. Hosting also favors media companies and corporations in terms of earning coverage and broadcast rights that attract ratings, and therefore, advertisements. But all these still appear small compared with the weight of financial investment that a host city pours in. That investment after all is largely funded by taxpayer’s money, and not every taxpayer will be satisfied with Olympic legacy as profit.

 

 


Manila as Olympic host?

With the risk of cost overruns and a myriad of other problems, is it possible for developing countries like the Philippines to host the Olympics? The Philippines has previously hosted the Asian Games in 1954, the World Basketball Championships in 1978, the Southeast Asian Games three times, and other international sporting events such as one of the qualifying tournaments for basketball at the 2016 Olympics.

 

Hosting the Olympics, however, is another matter, with thousands of athletes, coaches, officials, members of the media and tourists flocking to witness the Games. The International Olympic Committee (IOC) has 11 different criteria when considering bids for the Olympic hosting rights, with accommodation, general infrastructure, and sports venues carrying the most weight.

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Aside from infrastructure, another arguably more important criteria is the overall project and legacy. If Manila hopes to host the Olympics in the future, it does not only need to prove that it has facilities capable of housing the athletes and conducting the Games. It also needs to make sure that the Olympics will help speed rather than deter the country’s development.

 

 

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Immanuel Canicosa is a writer and segment producer for Sports5, and co-created programs on the PBA Rush Channel of the Philippine Basketball Association. His coverages for Sports5 include the 2016 PBA Governor's Cup, the 2016 Asian Olympic qualifiers for taekwondo, and the local broadcast of the ongoing 2016 Rio Olympics. He is also consultant for ClientComm, Inc. and a long-time sportswriter for GoArchers.com, where he has covered De La Salle University's varsity teams since 2011.

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