Each Olympic Games produces its share of sporting winners and losers. Each winner experiences the pleasure of mounting a podium and receiving a glittery medal, while each loser takes solace in the knowledge that (s)he has competed against the world’s greatest athletes.
But the cost of staging the Summer Olympics has soared beyond $15 billion dollars. With that much money at stake, each Games inevitably produces economic winners and losers as well. So how can we distinguish the winners from the losers? And what can we learn from them?
Athletes who win gold medals often advance to careers of fame and fortune. From Norwegian figure skater Sonja Henie to American decathlon athlete Bruce Jenner, Olympic champions have frequently become global media celebrities in Hollywood films, Madison Avenue marketing campaigns, and other commercial endeavors.
Global corporations often emerge as winners too. The upcoming James Bond film Skyfall undoubtedly profited immensely by the Opening Ceremonies of the 2012 Olympiad. The event featured a parachute jump — indeed, a literal “sky fall” — by characters portraying the British spy 007 and Queen Elizabeth II.
The East End of London will also benefit by hosting the main Olympic Stadium and several other facilities. In fact, Olympic organizers convinced an initially skeptical public to support their plans because the new venues would rejuvenate a neighborhood in need of development funds. Soccer star David Beckham, who spent his childhood in the East End, has been widely praised for working vigorously to bring the Olympiad to his boyhood home.
On the flip side of the roster of economic winners, of course, reside the economic losers of the Olympiad. First and foremost, every losing athlete who dedicated years of hard work to physical training would have been better served, in retrospect, by engaging in more financially productive endeavors.
The same principle applies to the government of the host city. In order to minimize construction costs and post-event maintenance expenditures, many of London’s Olympic events have been scheduled in temporary structures that will be torn down or dramatically downsized at the end of the Games. In fact, the basketball arena was even offered to be shipped to Rio de Janeiro for use during the 2016 Olympiad!
Although the use of temporary facilities may minimize costs in the short term, it may nevertheless result in the loss of rental and tourism revenues in the long term. Unlike Montreal, which recouped some costs by renting its Olympic Stadium to the baseball Expos for over 25 years, and Beijing, which now sells tours of its iconic Bird’s Nest Stadium, Londoners will be unable to enjoy any Olympic facilities that are torn down or sold off.
London vs. Athens
The primary question, of course, is whether Britain would have been better served if its leaders had dedicated a decade of planning time and billions of British pounds to other endeavors. Considering the British government’s commitment to an austerity oriented fiscal budget, as well as the recent slide of the national economy into an extended economic recession, it is reasonable to believe that the Olympic expenditures are inappropriate in nature.
Of course, Olympic supporters can retort that the global visibility of the Games could not have been achieved by any other means. They can also assert that, as a one-time only event, the Games do not require the type of long term spending commitments that would otherwise have been necessitated by massive expansions of social service programs.
Nevertheless, with economic conditions in Greece deteriorating so soon after its government’s massive fiscal commitment to host the 2004 Olympic Games, one cannot help but wonder whether Britain has placed itself at risk of experiencing a similar fate. Although London possesses incomparably greater financial resources than Athens, it is not immune to the vicissitudes of the global economic markets.
The Big Apple’s Experience
Meanwhile, across the Atlantic Ocean, a city that lost its own bid for the 2012 Games may now consider that defeat to represent a victory in disguise. New York City, after all, had (like London) developed a proposal that featured massive construction projects in neighborhoods that needed such funds.
But those Big Apple neighborhoods have been growing more prosperous as a result of private initiatives that emerged in the wake of the failed Olympic bid. The Far West Side of Manhattan, which would have served as the site of New York’s Olympic Stadium, has been revitalized by the renovation of the High Line elevated linear park. And the East River waterfront, which would have hosted the Olympic Village, has experienced gentrification in neighborhoods such as Long Island City in Queens and Williamsburg in Brooklyn.
Would London’s East End have experienced such development without a victorious Olympic bid? Perhaps you may find it difficult to envision such an outcome. And yet no one could have predicted that Brooklyn’s real estate values would ever rival those in Manhattan … as they now do.