Hosting the Olympics has become the contest no one wants to win, and the IOC is worried
Overwhelming costs and public discontent have made finding a city to host the Olympic Games a challenge.
Bidding for the 2022 and 2026 Winter Games has been met with hesitancy and reluctance from potential host cities, prompting the International Olympic Committee (IOC) to consider ways to reduce the exorbitant price tag that comes with hosting.
“The 2022 (bidding) certainly highlighted the problems we were facing in attracting cities, particularly winter cities,” IOC member and former vice-president John Coates said. “We had to do something to address the cost of the games. Increased costs have forced our hand.”
Bids to host the games go down as costs go up
After six cities dropped official or potential bids to host the 2022 Winter Olympics, the games were narrowly awarded to Beijing.
“[Cities] began to see it in a different light when the cost escalated beyond all reason, and beyond the amount of dollars that they could raise through normal revenue processes,” said Robert Barney, a professor at Western University, whose research revolves around the history of the Olympic Games.
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Four cities are currently in the running to host the 2026 Winter Olympics, with Sion, Switzerland, being the only bid officially declared. Innsbruck, Austria, firmly rejected a potential bid after a public poll showed a less than enthusiastic response from residents.
“In combination with the cost, I think it’s just become onerous. And now, because they’re asking citizens what they think, we’re just seeing a large number of cities saying, ‘you know we asked people in the community and they said no,'” said Robert VanWynsberghe, a professor and sustainability expert at the University of British Columbia.
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According to a study produced in 2016 by Oxford University, the cost of hosting both the Summer and Winter Games has gone up consistently since 1960. London 2012 is the most expensive Summer Games thus far, with just under US$15 billion being spent, and Sochi 2014 has been the most expensive Winter Games thus far with over US$20 billion being spent.
In addition, cities will often spend years paying off debt taken on to host the Olympics, which Barney explained often increases the burden on taxpayers.
“The costs far outstrip the private means of raising money to put on the Olympic games, and therefore the balance needed has to come from public tax monies. People get roused about that, putting their tax money into what some observe to be a 16-day party,” Barney said.
He uses the example of Montreal 1976, where the city paid over US$6 billion to put on the event and spent the next 30 years paying it off until the debt was forgiven in 2006.
Barney also hints the IOC reserve fund of hundreds of millions of dollars could one day be used to offer cities a revenue-sharing option if a host doesn’t volunteer.
Why have they become so expensive?
VanWynsberghe explained that the rising costs to cities are a symptom of the bidding process. As cities with the most extravagant plans are continuously awarded hosting privileges, it sets the standard for cities that might bid in the future.
“In order to win these games, the hosts are promising too much to begin with. That’s how they win, and the IOC has to work with them because in many cases the host cities don’t know what the real impacts are, they don’t know what the costs are going to be,” said VanWynsberghe.
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Barney noted that significant debt is also generated in spending more money on hosting the games than can be reasonably made back in revenue.
Given the cost of urban and transportation infrastructure, he noted that the games likely run well above the originally estimated costs. Stadiums and arenas that were built to host events often stand abandoned afterwards, racking up exponential maintenance fees for minimal returns.
“If there’s any constant in history or any lesson in history, it’s these white elephant Olympic facilities built in the cities of the world who have hosted the games,” said Barney.
He cites Montreal, Athens and Rio as examples of cities that built expensive Olympic stadiums, only to have them stand abandoned or minimally used today.
In addition, VanWynsberghe argued that the benefits often touted of hosting the games — including increased tourism revenue, an upsurge in regional jobs and a more robust transportation system — don’t stick around after the medals are awarded and the athletes head home.
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“They can’t [last]. You’re putting in place temporary structures, now they’re increasingly temporary. What is it that these people are going to do?” he said.
Can the games be made more sustainable?
Several proposals have been presented to make it less onerous for cities to host the Olympic Games, starting with the proposal put forth by the IOC itself.
Vision 2020 was released by the IOC a few years ago in an attempt to make hosting more attractive by allowing cities to keep more of the revenues from ticket sales and local sponsorship deals and reducing the cost of submitting a bid.
On the Olympic Games official website, the plan is described as “a new philosophy to invite potential candidate cities to present a project that fits their sporting, economic, social and environmental long-term planning needs.” In addition, the IOC promises a “significant financial contribution.”
Coates said the International Olympic Committee is doing a “total rethink” over the way the games are presented to potential bidders, and how they’re sold to the public. For example, in courting Calgary to a 2026 Olympic bid, the IOC also suggested that it wouldn’t cost as much as predicted to submit a bid to host the games.
Experts have suggested other ways to balance the costs of hosting, which include selecting two cities to share hosting duties, building multipurpose stadiums and centres, and building these facilities on college and university campuses where they will be continuously used after the games.
“When it comes right down to it, you have to be very careful about building new Olympic facilities. The thought is that they’re going to remain there and be a legacy for the future, but in fact, they tend to be very costly. In some cases, they’re just abandoned and forgotten,” Barney said.
Barney uses the Calgary 1988 Winter Games as an example, where the speedskating facilities were built on university campuses and are still frequently used by students today. The Beijing 2008 stadiums built on universities in the region are another example of facilities that continue to be used by the public today.
He contrasts this with the Montreal 1976 stadium, which he explained costs much more to maintain annually than the stadium yields in yearly revenue from hosting events.
Some of these cost-cutting measures are being considered for the 2026 Games, for which there is still just one official bid.
The deadline to submit a bid for the 2026 Winter Games is Mar. 31, 2018. With many cities already rescinding their interest, the IOC is scrambling to convince potential hosts that the Olympics aren’t more trouble than they’re worth.
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