Five-Ring Circus

The cycle of national group bids to host the Olympic Games usually has not generated the type of openly negative discussion that occurred this year in the United States. From newspaper articles to blogs, to “Olbermann” on ESPN, Boston’s winning bid to represent the U.S. as a potential Summer Olympic site generated a firestorm of criticism and even some incredulity.

Sports historians, social scientists and other academics have written extensively regarding the cost of constructing stadiums Early books, such as Dean V. Baim’s The Sports Stadium As a Municipal Investment, used economic analysis to demonstrate that the stadiums cost significantly more than their projected cost. Few stadiums built from the 1960s through the 1980s ever earned a net positive financial gain.

One prime example was the Olympic Stadium in Montreal, built for the 1976 Summer Games and used by the Montreal Expos baseball team. According to Robert C. Trumpbour’s New Cathedrals, the stadium left the city with a $ 1 million debt. Paying the debt through the mid-2000s, according to Garry Whannel in Culture, Politics and Sport marred the memory of the games in the minds of citizens. The memory and current circumstances regarding the stadium have not improved as the stadium has basically been empty since 2005,

The books on stadiums have focused on stadium proponents main argument: that stadiums generate economic growth. Andrew Zimbalist, an economist at Smith College has written extensively about the falseness of this purported reason for supporting public financing of stadiums. He and Roger G. Noll’s book Sports, Jobs and Taxes concluded that sports teams and stadiums were not a source of local economic growth and employment and that the public financing provided to the team far outweighed the new jobs and taxes that the team and stadium provided the city or state. The message about the economic viability of stadiums started to reach more of the public.

In some cities, opponents of publicly financed stadiums made pitched but unsuccessful efforts to stop these expenditures, In 2004, Kevin J. Delaney and Rick Eckstein captured these battles in their book, Public Dollars, Private Stadiums. Intriguingly, stadium proponents downplayed the economic gain argument, and adopted two others to win the financing in cities ranging from Pittsburgh and Cincinnati to Denver, Phoenix and San Diego.

The Olympic Games offered two key assets to the hosting city and nation. The first, particularly important during the Cold War, centered on national pride. The second, promoted the economic gains that the Games reportedly brought. Proponents asserted that economy of the host country attained growth spurred on from new construction that occurred before the start of the Games. The gains continued during the games from event and visitor spending during the event.

Montreal showed that the economic gains often still leave a debt. Ferran Brunet’s study, “An economic analysis of the Barcelona’92 Olympic Games: resources, financing and impacts,” offered a somewhat more positive example. The author observed the typical underestimation of the cost to the Olympics, “In the development of the Olympic project the forecasts went from 237,000 million pesetas in April 1985, to an estimated 768,368 million in March 1991, to the final figure of 1,119,510 million pesetas in July of 1993.”  The city and national governments and private partners invested this money and actually generated $ 2.2 million in profit. The Games provided a rise in employment and a stronger sense of confidence and world presence for the city and nation. However, when I visited a decade later, much of the Olympic area in the city appeared empty and devoid of people and games.

Do cities in the United States need the Games for similar reasons? Atlanta won the 1996 Summer games and sought to use them to promote tourism and attract businesses to the region. Again, pre-Olympic projections expected the creation of 77,026 jobs and $5.14 billion into the state economy. Despite Barcelona’s success, it’s jobs total capped out at less than 67,000. According to Steven P. French and Mike E. Disher in “Atlanta and the Olympics,” Atlanta spent over $200 million each for an indoor stadium and Olympic stadium. Much of the money came from private sources and very little public funds.

At the close of the Games, the estimate of economic benefits from the Games fell over a billion dollars below initial projections. What organizers either did not consider or perhaps include was the Olympics would not bring new spending. The games shifted spending away from other entertainment activities and other revenue-generating activities could not occur in Atlanta because of the presence of the Olympics. Additionally, visitor spending on food and lodging totaled less that expected.

In their book Olympic Dreams: The Impact of Mega-Events on Local Politics, authors Matthew J. Burbank, Gregory D. Andranovich and Charles H. Heying analyzed how three US cities fared in their attempt to use the Olympics as an approach to economic growth. They argued that the Atlanta region benefited from the tourist, employment and construction windfall. City officials replaced aging infrastructure, although residents paid double the cost for water and some other utilities since the changes. Their chapter focused on urban development aspects that did and didn’t happen with the Olympics. That will be the focus on the promises and deliveries for US cities with hosting the Olympics.

Brett L. Abrams, Independent Scholar

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