A lack of qualified, enthusiastic bidders seems to worry the International Olympic Committee, forcing it to change its policies in order to move the Olympic torch around the world.
In less than six months, sports fans will tune in to the Olympics again, this time for the Winter Games in Beijing. China’s 3,000-year-old capital will be the first city to host both the Summer and Winter Games. After competing against 10 cities and spending $40 billion to host in the summer of 2008, Chinese organizers did not have to run themselves into the ground for the upcoming winter fest. Their closest competition, Oslo, pulled out of the bid, leaving Beijing to beat out only Almaty, Kazakhstan, for this February’s event.
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“Rather than having five or six bidders, they’re now down to one or two bidders, and maybe in some cases, zero bidders,” Andrew Zimbalist, an economist and co-author of the book, No Boston Olympics, explained in a phone interview. He believes the IOC “recognized” that there is a problem, as the Games have gotten too “expensive, destructive and disruptive,” and fewer cities are willing to bid.
Since 2019, the IOC has held bidding sessions behind closed doors. “The public won’t be able to see the absence or the disinterest among possible cities for hosting,” Zimbalist said. “And thereby, the IOC would be able to avoid the embarrassment of having plebiscites, or referenda where people vote not the host the games.”
Anita DeFrantz, a former U.S. Olympian and a longtime delegate to the IOC, says there’s a simple solution. “What we need is one city capable of hosting each Games,” DeFrantz said in a phone interview. “We do not need a bunch of cities looking to be on the global scene as a potential host city and all the glory that comes with that. We’ve gotten out of the promotion business.”
DeFrantz explained that the IOC evaluates bidders privately, studies the potential cities and invites qualified candidates to its selection session. “If the city does not meet what the session believes is appropriate, then that city will not be selected,” she said.
A decade ago, cities clamored to host the Olympics. Government officials publicized hosting the Games as a significant opportunity for foreign investment, publicity and tourism. However, since the bidding war in 2013 for Tokyo 2020, fewer cities are lining up to host what could end up being a multibillion-dollar burden. From expensive sports facilities to athletes’ villages, hosts must foot the bill for the necessary infrastructure to accommodate millions of visitors.
“The problem with the Olympics is that it is a very expensive and complex event,” explained Victor Matheson, an economics professor at College of the Holy Cross. “Normally, we have about 11,000 athletes in 35 or so disciplines. A lot of those disciplines are very obscure, and most places don’t have large world-class sporting facilities set up for those events.”
At the same time, pre-event economic impact studies often overstate the potential benefits of hosting the games. According to Jules Boykoff, a former Olympic soccer player and a professor at the University of Oregon, over the last 50 years, every Olympics “has overshot its budget by an average of 179%.” Boykoff argued that construction companies and hospitality businesses thrive after the city wins the Olympic bid, but there is no one to hold accountable when things go wrong.
“The problem with the Olympics is that the positive examples are so few and far between,” he said in a phone interview. “I think it is important to remember the Olympics make money for people; they just don’t make money for everybody. They make money to those who are already doing really well financially.”
In Tokyo, organizers estimated the event to cost $7.4 billion. Although they tried to keep the costs as low as possible, the bill for hosting the Olympics with no spectators was approximately $16 billion. The IOC will publish its annual report later this year with exact figures.
There are successful examples of hosting the Olympic Games, yet a significant number of cities have teetered on the brink of bankruptcy. The cost of the 2004 Athens Summer games is considered a contributor to the country’s debt crisis. Rio de Janeiro, the only South American city to host the games, lost $2 billion. Montreal’s Olympics left the city with a $1.3 billion debt, which took 40 years to pay off. The 1980 Lake Placid Games, fondly remembered for U.S. hockey’s “Miracle on Ice,” needed two government bailouts to pay off multi-million-dollar debts left in the event’s wake. The actual cost of Japan’s Nagano Winter Olympics remains unknown because the Vice Secretary of the Olympic Bid committee allegedly told the organizers to burn the documents after the staggering loss.
Some experts argue that following examples of how host cities have suffered, more cities will pull out of the bidding rounds to avoid economic downturn and public backlash. All of the recent Olympic Games have seen cities drop out. The IOC has begun confirming cities 11 years in advance to allow local officials more time to plan and build infrastructure. Previously, host cities were selected seven years ahead of the Games.
Paris will host the next Summer Olympics, and in 2028, the Games return to Los Angeles for the third time. During the Tokyo Games, the IOC announced that Brisbane, Australia, will host the 2032 Summer Games. All three cities seem to be happy to host the world's most famous global sports event. The IOC’s argument is that feeling proud should be enough. Expecting a return is not what the Olympics is about.
Judith Grant-Long, associate professor of sports management at the University of Michigan, agrees that the disappointment mostly comes when cities expect a significant return on their investment. "If you are going to plan to have a wonderful party, and you're going to invite all of your friends to this wonderful party, you are expecting to pay the bill,” she said. “And perhaps you reap benefits in terms of social relationships and networks and so forth. But the return on investment is negative. And that's what the Olympics is. It's basically a party.”