Counting the Cost

Sport is a young man's game, and at a metaphorical level, so is the hosting of sports tournaments. Developed countries rarely derive much benefit from hosting a World Cup or Olympics. Consider the fact that London already boasts lots of large stadia. Is there any real reason to say that it needs an 80,000 seater athletics facility? With the exception of the Olympics (which we can assume London won't host again for many years, and indeed if they do so again it may require a new built facility), there is no athletics event that draws remotely that amount.

As the scale of the Big Two sports events has grown, so too has the cost of hosting them. Beijing 2008 cost anything up to forty billion dollars. While London won't clock in anywhere near this amount (it will probably top out around ten billion), the figures mask the fact that Beijing gained a lot of much-needed infrastructure from that figure. Facilities such as Beijing Capital Airport's Terminal 3 were necessary before the Olympics anyway, to deal with exploding air travel. In a similar vein, the massive investments in road and rail for Beijing were working up from a very low base, and will pay dividends in the future. London's infrastructure (with the exception of a new terminal in Heathrow, which probably won't be completed on time anyway) hasn't been built specifically for the Games. Almost all of London's money will go on the event or the stadia.

More ominously, the Olympics may actually harm grassroots sport in Britain, which is in a poor enough state as it is. In order to defuse concern's about the rising costs, the previous government suggested that money may be diverted to the Olympics from the general sports budget. That money was earmarked for other projects, all of which will now suffer so as to built what is essentially a one shot complex. With austerity the order of the day, and the Games money ringfenced, it leaves other sporting investments even more vulnerable to trimming.

Across the world, the spiralling costs of hosting a sports tournament is becoming a problem, particularly as the growing number of attendees require facilities to be designed for far more spectators than they will ever see again. For the 2010 World Cup, South Africa constructed stadia with copious amounts of temporary seating, which made for easy downsizing when the events are over. Only a handful of countries have the existing infrastructure to host a World Cup, and those who build for it are increasingly finding they have a lot of white elephants on their hands afterwards. Qatar's promise to dismantle their facilities and ship them to the Third World after 2022 may be extremely difficult to put into practice (and may indeed have been a bribe for poor countries to vote for them) but it was at least an innovative attempt to deal with the legacy of a sports tournament.

Very few countries have managed to capitalise on the legacy of an Olympics. Athletics simply isn't a big enough draw, and the things that are (football, NFL, rugby, etc) generally find playing on a pitch with a running track around it to be a bit of a nuisance, and the backroom facilities aren't easily interchangeable. Hence Tottenham Hotspur's plan, in the event of getting it, to level the Olympic Stadium and rebuild it as a football stadium after the Games, and make a token investment in athletics elsewhere.

Should one find themselves in Seoul or Munich, a tour of the Olympic villages is a worthy endeavour. Except that there are no organised tours. The main stadia lie semi-derelict and are technically not open to the public (though easy enough to access). One would think that Munich, given both its notoriety and the fact that Germans rarely waste anything, might merit at least a museum, but this is sadly not the case. As of my last visit there, the stadium was a construction site, former tenants Bayen Munich having abandoned it for the newer Allianz stadium on the other side of the city. Seoul, despite being barely two decades old, is little better than a shell. The state of the Los Angeles Memorial Coliseum, the only stadium to have hosted the Games twice, is often cited as the primary reason LA lacks an NFL team, despite being the second-biggest market in the USA. During the summer, the city government decided to build a new stadium at Farmer's Field, with the intention of luring an NFL team there. The Coliseum will be relegated to the occasional concert.

What, then, of the invisible benefits? Surely the influx of tourists, sponsors and the increased profile of the host city count for something. The problem with this argument is that it works better for developing countries. Prior to the Olympics, Beijing was probably not top of anyone's list for travel destinations, and the Games undoubtedly gave it a much better profile in the tourist industry. The problem is that London already draws more tourists than any other city on the planet. Alongside New York, it is the world's leading financial centre, and with New York and Tokyo would be considered the three Tier One cities on the planet. Already home to five Premiership clubs and two of the world's most famous cricket grounds, London doesn't exactly need to increase its global profile in sport. Nor is it going to attract a lot of additional tourists, beyond the direct fillip of the Games.

Conversely, had England actually managed to get the 2018 World Cup, it could have been done on a relative shoestring. All the stadia, bar one in Bristol, would have been in place, and only minor expansion work would have been necessary to a few venues. As a compact enough country with excellent infrastructure, the whole operation would probably have been cheaper than the Olympics. Compare this with Russia, which will have to invest vast amounts on stadia, to say nothing of the improvements needed for crumbling Soviet infrastructure, or Brazil, which nearly has to start from the beginning. The difference is that the facilities built for the World Cups in 2014 and 2018 and the 2016 would have been necessary anyway, as both the economies and football leagues in Brazil and Russia continue to expand.

The sad reality is that London's Olympic bid was essentially a costly product of vanity and hubris. In 2005, the illusory growth that the property bubble brought was assumed to be a fact of life, and there was money for all manner of nonsensical products. The problem is that, like the growth, the money was an illusion, and now the British government is committed to a very expensive project for which they have no plans of using as a long term asset.

Oddly enough, one country that is both a cautionary tale and a good example of what to do right is Greece. Few things encapsulated the hubris of the Greeks in the past two decades more than bidding to host the 2004 Games. The cost was beyond what the country could afford, though the advent of cheap euro interest rates and cooking the books masked this. Now, the Greek government, on the verge of default, is still legally obliged to shell out half a billion euro a year on maintaining the facilities. The spectacularly luxurious airport built for the Games operates on less than half capacity, and the municipal light rail service has become a black hole into which money disappears. As vanity projects go, the Olympics can be rather costly, and future hosts should take note.

Post by Greg Bowler.