Photo Illustration by 731; Photo: Hulton Archive/Getty Images
Hosting the Olympics has long been expensive, but that’s never stopped cities around the world from competing to hold the games. As plans get under way for the 2022 Winter Olympics, voters in some cities are expressing doubts about whether blowing their budgets on fancy venues is worth the trouble and expense. The latest to withdraw its candidacy, in October, was Oslo. That leaves Beijing and Almaty, Kazakhstan, in the running.
About a half-dozen cities considering bids were spooked by the record $51 billion the Russian government spent on the Winter Olympics in Sochi. The high-handed demands of the International Olympic Committee were another turnoff. When Oslo backed out, Norwegian newspaper VG ran excerpts from the IOC’s manuals for host countries under the headline: “IOC Requires Free Booze in the Stadium and Cocktail Party With the King.” The article highlighted guidelines stating that a full bar must be available in the stadium lounge during opening and closing ceremonies. It’s OK to serve only beer and wine on competition days. The head of state must be there for the start of the games. “The ceremony is usually preceded by an aperitif and followed by a reception,” the manual says. It also makes clear that the country’s Olympic committee should pick up the bar tab for the opening reception. An IOC spokesperson says the manual consists of suggestions, not requirements.
The revolt began in 2011 in northern Italy and southern Austria, when local assemblies voted against a bid to bring the games to the Dolomites straddling the border. In March 2013, Switzerland dropped a potential bid to host the 2022 Olympics in Davos, and St. Moritz’s fell apart when funding was voted down in a plebiscite; Stockholm dropped its bid because it lacked political support; and Munich withdrew after voters said no in several referendums. Krakow in Poland pulled out after a referendum.
Amount the Russian government spent on the Winter Olympics
In Norway politicians decided against a bid after polls showed slim public support for the games, which would have cost an estimated 35 billion kroner ($4.9 billion). Few officials wanted to be seen backing a project requiring infrastructure that many said would blight the urban landscape after the games. The decaying Olympic venues for kayaking and beach volleyball in both Beijing and Athens come to mind. “This sends a very powerful message to the International Olympic Committee that it needs more modesty and to be closer to the people in future Olympic events,” Norwegian Minister of Finance Siv Jensen told news agency NTB.
The Norwegians made the right call, says Andrew Zimbalist, an economics professor at Smith College in Northampton, Mass. “The IOC asks for a gigantism in luxury. They’ve been perfectly happy letting these countries outdo each other.” Zimbalist figures the Winter Olympics generate revenue of $4 billion, half of which consists of broadcast revenue and sponsorship fees the IOC splits with the host. “Sochi, or the Russian government, probably got about $2 billion. What kind of calculus is that?” asks Zimbalist, whose book Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup is due out in February. Hosting the Summer Olympics is another issue. It brings more money—$5 billion to $6 billion—and more publicity for the host city. But he says it’s still rarely worth it financially.
Thomas Bach, a former German fencer who became president of the IOC a year ago, is bringing change. On Dec. 8 the committee voted to reform the bidding process. A host city now won’t need to build, say, a ski jump if there’s already a good one in the next town, or even the next country. The IOC would pick up some of the high travel costs that delegates from bidding cities pile up for the many meetings with the committee. It also voted to ban discrimination against athletes based on their sexual orientation. The manual of guidelines remains unchanged.
At some levels, the Olympics have become more suited for authoritarian regimes that can use the games to showcase their achievements. A reformed IOC that lowers costs could attract bidders from the West again.