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Debate: Hosting the Olympic games

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Is it worth hosting the Olympic games?

Background and context

For 17 days every four years the Summer Olympics attract the world’s attention and the host city gets immense media coverage. Yet many argue that the huge cost of hosting the Olympic games means that cities are left with crippling bills and empty stadia once those 17 days are over. Montreal, the host in 1976, is still paying off the cost of staging the games today and the Athens Olympics of 2004 ran billions of euros over the original budget - at state expense.[1] The scandal surrounding the bidding process for the Salt Lake City 2002 Winter Games revealed that 13 of the 124 International Olympic Committee (IOC) members who were tasked with deciding who should be awarded the games were ‘bought’ with gifts and bribes. Since then the IOC has tightened up its regulations but rumours of corruption amongst some members remain and were revealed by a BBC sting operation in 2004.[2] Whilst proponents of hosting the games generally accept that they will inevitably cost significant amounts of money, they argue that the ‘feel good factor’ and longer term benefits justify this outlay.

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Economics: Does the Olympics benefit the economy of its host?

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Yes

Hosting the Olympics stimulates regeneration, investment, and long-term economic benefits. The IOC is enthusiastic about bids that will leave a lasting impact and have looked favourably on cities that locate their Olympic Villages and stadia in deprived areas in need of regeneration. The 1992 Barcelona Olympics were used as a means to completely overhaul the port and coast of the city creating an artificial beach and waterside cultural area that became a lasting tourist attraction. Along with cleaning up areas and new stadia, Olympic Villages release between 5,000 and 20,000 new homes which governments can choose to hand over as low-cost housing (as is proposed for London 2012). Whilst these projects could be completed without the Olympics, the need to provide an overall package (transport, accommodation, stadia, greenery etc.) for a set deadline means that there is far more incentive to get the projects done. An example of this in London is the plan for a new 15bn underground rail system called ‘Crossrail’, first proposed over 20 years ago but only now being developed because of the attention surrounding the London 2012 bid. The fact that international scrutiny will follow the building program means that it is far more likely to be completed to a high standard (consider the detailed coverage of the preparations for Athens 2004).[3]

Whilst none of the Olympics of recent times have made an immediate profit, the cost of the regeneration and improved infrastructure means that this is not a big problem as long as the losses are not huge. The Olympics showcases the host nation to the world and most hosts have seen a boost in tourism in the years after the Olympics (Australia estimates it gained ?2bn extra tourist revenue in the four years after Sydney 2000). During the games between 60,000 (Paris 2012 estimate) and 135,000 (New York 2012 estimate) jobs are created providing skills and training to local people.[4]

The Olympics are a showcase of economic strength and opportunity. Hosting the Olympics can be a way of making a strong political point because of the intense media scrutiny that accompanies the games. During the Cold War both Moscow 1980 and Los Angeles 1984 were used by the USSR and USA to show their economic strength. Seoul in 1988 used the games to demonstrate South Korea's economic and political maturity. The Beijing Olympics in 2008 are seen by many as evidence of China’s acceptance into the global community and a way for her to showcase her economic growth and acceptance of the West. For New York, the 2012 bid is a way of showing that the post-9/11 healing process has been completed and that the city is ‘open for business’ despite the terrorist attacks.[5]


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No

Hosting is very expensive. In recent times the Olympics have never made a direct profit. The bidding process alone for 2012 will cost each bidding city around 20m and whichever is selected will expect to pay at least 6.5bn (Paris).[6] With increased security fears Athens spent $1.5bn on security out of a total of $12bn on the 2004 games. The burden of this cost falls on government (and therefore the taxpayer), companies and individuals. Both Paris and London’s local governments have put aside around 2.4bn which will mean 20 per year extra in tax for every household in the cities. Big projects are notoriously hard to budget for (so much so that London is estimating the total cost may go up by up to 50%) and residents in Los Angeles have only just stopped paying for the over-budget 1984 Olympics through their local taxes. If cities want to regenerate or improve their infrastructure then they should use this money directly on those projects rather than wasting it on subsidising a sporting event.[7]

Hosting does not leave a beneficial legacy. The demands of the Olympics are very particular, an 80,000 all-seater stadium, pools, horse tracks, beach volleyball etc. Many of these stadia will never be used again after the end of the games. Even in Australia, which has a very strong sporting ethic, underused stadia in Sydney are costing the taxpayer $32m a year in maintenance.[8] In the long term, the money spent on these stadia would be much better off used to build affordable homes and transport infrastructure which is designed with local residents in mind rather than with the intention of impressing IOC members. As far as tourism goes, Greece may even have lost out economically in 2002-03 as potential visitors stayed away, frightened off by stories of disruptive building works, security worries and fears of over-crowding.[9]

The bidding process takes too long, is uncertain, and ties up land. Bidding officially takes only two years (unless a city fails to make the shortlist), but most cities spend nearly a decade working on their bids.[10] Obviously the bidding process costs money but it also ties up the land needed for any future Olympic Village or stadia from being developed until the bid outcome is known, as well as diverting government funds away from other sporting events and activities.


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"Feelgood factor": Do the Olympic boost national pride?

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Yes

Hosting creates a 'feelgood factor’. It is hard to put a price on the buzz that surrounds international sporting events. Think of Paris during the World Football Cup in 1998 or Sydney during the 2002 Olympics. Even sporting success abroad can unite a nation (for example the England Rugby Union Team’s victory in the 2003 Rugby World Cup in Australia). Governments are aware of the huge potential for boosting national pride and national unity. The Paris 2012 bid has used a well-known footballer, Zinedine Zidane, who is the son of an immigrant to stress how hosting the Olympics would bring Parisians of all backgrounds together. It is partly because of this ‘feelgood factor’ that so many people want their city to host the Olympics (97% of Parisians and 87% of Londoners want the 2012 Olympics).[11]


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No

There is no guarantee that a city will experience a 'feelgood factor'. In Athens many of the events had empty seats as the Greek team failed to do well enough to capture the local imagination. Where tournaments and games have successfully created a ‘buzz' it has been because the host nation has done well (England reached the semi-final of Euro 96, France won the World Cup in 1998).[12] The fact that this ‘feelgood factor’ can be had even if the team is winning on the other side of the world means that there is no need to host the Olympics in order to get it. In any case, any Olympic excitement will be shortlived compared to the years of disruption and congestion which a host city will suffer in the run-up to the games, due to the massive building work and security worries which are now necessary.


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Corruption issues:

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Yes

The bidding process is now open and trustworthy. Whilst the 1998 Salt Lake City scandal did reveal huge levels of endemic corruption, IOC president Jacques Rogge has taken significant steps to stamp it out. Cities can now be confident that the best bid will win and that they should not be put of bidding to host because they fear they will lose simply for not being corrupt enough.


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No

The bidding process itself is heavily political and so it is very possible that a good city will spend 20m on a bid only to lose to a weaker candidate. The way the IOC works with each member deciding which city they wish to vote for means that personal relationships and international tension can count for more than the quality of the bid. For example, American foreign policy is thought to be disadvantaging New York in the 2012 bidding process. Given that the Olympics are ‘rotated’ between continents, if a city fails to be selected it will be 12 years before it has another chance.[13]


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Social effects: Does the hosting of Olympics have general social benefits for a nation?

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Yes

Hosting has an impact on the whole nation. The Olympics involves hundreds of events and sports and so provides an opportunity for the whole nation to feel like they have taken part. Training camps are often located outside the host city, as are events such as rowing, sailing, canoeing and shooting, so that the rest of the country benefits too.[14] The lasting impact of this will be a generation of young people who are excited about sport. Given rising levels of childhood obesity and declining amounts of sport in schools, this can only be a good thing.


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No

Hosting only affects one city. In large countries like the United States or China, the benefits of the Olympics are almost entirely focused on the host city. Even in smaller countries, the benefits of a football match played outside the host city or a training camp are negligible. Capital cities are often chosen (after failed bids from Birmingham in 1992 and Manchester in 1996 and 2000 the IOC told the United Kingdom that only a bid from London was likely to win), which concentrates growth and development where it is least needed.


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