John Hockenberry reflects on what an Olympic legacy really means — and if it's worth the cost.
Throughout the history of the Games, the performance of the athletes has improved as the costs of the Games creep higher. The first modern Olympic games in 1896 cost the host country Greece less than a half a million dollars. In 1936, the Berlin games cost $30 million. In 1960, Rome spent $64 million for highways, the Olympic village, and the Estadico Olimpico for their Games. It has taken Canada 30 years to pay off the loans to fund the Montreal Games in 1976, and in 1984 television rights cost ABC just as much as the city of Los Angeles made from the Games.
Bob Costas won’t tell you, but watching the Olympics on NBC this year cost the network more than a billion dollars, a price tag that nearly covers the security bill for the 2012 Games. With a projected cost of around $17 billion, that has more than a few Brits complaining. Is hosting the Olympics worth it anymore?
Andrew Zimbalist, an economics professor at Smith College, says no for three reasons. Writing for The Atlantic, he outlines the real costs of hosting the games, which begin before the host city is even chosen. In the bidding war to secure the 2016 Games, Chicago spent $100 million, only to see Rio de Janeiro win out. The real problem is that committee that makes the case for its city does not have the city's interests at heart. "The committee that nominally represents the city really represents itself and bids according to its sense of the private benefit (of its members) versus the private cost, rather than the city's public benefit versus public cost," Zimbalist writes.
The second reason is the massive construction efforts that the host city must undertake to prepare itself for the Games. Developing cities can benefit by using the Olympics as a catalyst to overcome political infighting and complete necessary infrastructure improvements. However, to developed cities, the projects merely serve to drain millions of dollars towards athletic buildings that Zimbalist writes are "not conducive to rational, effective planning." He cites examples like Beijing's famous Water Cube, which was in the global spotlight as Michael Phelps made a run for eight gold medals in 2008. Today, it operates as a water park — entertaining, but perhaps not worth the estimated $150 million price tag.
Finally, Zimbalist finds that the promotion of the host city does not mean a spike in tourism, as promoters promise. He puts up the numbers. "These days the summer Games might generate $5 to 6 billion in total revenue (nearly half of which goes to the International Olympic Committee)," Zimbalist writes. "In contrast, the costs of the games rose to an estimated $16 billion in Athens, $40 billion in Beijing, and reportedly nearly $20 billion in London."
For the professor, there's no question that hosting the Games will mean an economic loss in the short term. Long-term benefits are inconclusive, and many of the benefits that the Games supposedly bring are not reliant on them. "Finally, it would appear that most of the positive developmental functions that could be associated with the Olympics could also occur absent the Olympics," Zimbalist writes. "The needed infrastructural investments could be made, the national airline could offer reduced rates for stays of over one week, trade missions could multiply their efforts, and so on."
For better or for worse, Londoners will see the Games begin in their city on July 27.