Recreation and Sport Studies

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Mega-sport events as “Circus Maximus”: Short-Term Thrill, Long-Term Agony

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circus-maximus

The chapter “Bread or Circuses?” from Andrew Zimbalist’s book, Circus Maximus, examines the intricacies and complexities associated with hosting mega-events, such as the Olympics and the World Cup. The main issue that Zimbalist is trying to understand is if it’s worth the economic gamble that the host cities must undertake to put on these extravagant events. Do the positives outweigh the negatives? Do the benefits outweigh the risks? Simply put, the answer to these questions is most definitely, NO.

The IOC (International Olympic Committee), and FIFA (International Federation of Association Football) claim that hosting these mega-events is a boon to the economic development of the host city/country. They claim that much of the expense in hosting is connected to improving infrastructure, which will support the long-term development needs. They claim that hosting brings short-term employment gains. Furthermore, they claim that host cities will benefit from long-term legacy returns, such as business and/or tourism opportunities. When examining each event individually it may seem like some of these claims are true. However, once you dig deeper it becomes convincingly clear that they are able to create that perception through the use of systematic corruption and manipulation.

In regards to the claim that improving infrastructure will support the long-term development needs of a host city, this may be true, however, to be successful it requires very careful and clever planning. Unfortunately, this is rarely done properly. The best example of this being done is Barcelona when they hosted the 1992 Summer Olympic Games. The case of Barcelona is very unique though. City planners had begun to re-conceptualize the city in 1975 and put their plan to use over the next decade before they even considered hosting. Hosting was seen as a vehicle to put their plan into action. Therefore, Barcelona used the Olympics; the Olympics didn’t use Barcelona. Cities have tried and failed to copy Barcelona’s blueprint. The difference being that they are on the clock and don’t have the time to strategically and organically implement their infrastructure plans.

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The layout of venues for the 1992 Barcelona Summer Olympics.

Regarding the claim that hosting brings short-term employment gains, again this may be true, but fails to tell the whole story. The people that stand to gain the most are the local business elite, mainly the construction companies. The costs budgeted in the bid are always massively understated, in order to get political and public consent. This leads to the government having to borrow money and pay it back over the ensuing decades, which reduces funding for other government projects and reduces public employment in the future. The local population do not usually benefit from the increase in employment opportunities. Instead, the construction companies that are contracted to build the facilities and infrastructure bring in imports from other countries for cheap labor. For example, Qatar has brought in an estimated 1.5 million migrant workers from Nepal, India, Sri Lanka, Bangladesh, and the Philippines to undertake the massive construction for the 2022 World Cup.

Additionally, the long-term legacy return that the IOC and FIFA claim that host cities will benefit from has been unfounded. If any does take place it happens decades down the line and is very hard to quantify. What has become most common among host cities is the number of “white elephants” that have been left behind. These “white elephants” are the Olympic venues that cost billions to build and millions annually to maintain, along with the mountains of debt that must be paid back over the ensuing decades. For only 19 days of action is it really worth such a large investment? If there is no plan post-event for the venues it can be catastrophic on the community and its economy.

athens-2004-softball-stadium

Abandoned Softball Stadium from 2004 Athens Summer Olympics.

Athens, Greece, host of the 2004 Summer Olympics is an example of the worst-case scenario. Athens ended up spending approximately 16 times its initial bid budget to put on the Games. The majority of the venues built have since been abandoned with no use to the people. This act of financial mismanagement was a main contributor to bankrupting Greece when in 2010 the debt crisis began. The government was forced to stop maintaining the venues and they have become a great source of embarrassment for the city of Athens, which happens to be the birthplace of the modern Olympic era.

athens-2004-diving-pool

Abandoned Diving Pool from 2004 Athens Summer Olympics.

Since 2001, the number of bidders to host has diminished greatly due to the negative image caused by the outlandishly excessive mega-events from Beijing (2008), South Africa (2010), Sochi (2014), and Rio (2014, 2016). The increased coverage of these events and the pitfalls of hosting have scared government officials and the public away from bidding. To put this into perspective, there were 12 bidders for the 2004 Summer Olympics, but since has steadily declined to 10, 9, 7 and then just 5 bidders for the 2020 Summer Olympics. The Winter Olympics have been hit even harder. There were 9 bidders for the 2002 Winter Olympics, but that number has decreased steadily all the way down to 2 for the 2022 Winter Olympics.

The IOC has at the very least acknowledged that there was the need to drastically reform the bidding process, as it is way too complex and financially demanding to potential bid candidates. The IOC developed the Olympic Agenda 2020, with the hope that it would make it more appealing and easier for cities to bid. Affordability, Sustainability, and Human Rights were the three key values identified by the IOC in its Agenda. They thought that if they could make bidding and hosting more affordable, with a greater focus on ensuring that the venues/infrastructure were built in a way that can be beneficial to the community long-term, that more cities would bid. The Agenda 2020 actually seemed to be working as planned, as there were about 7 cities that expressed interest in hosting the 2024 Summer Olympics.

However, since that time Rio has gone over their budget fivefold. The IOC then chose Tokyo as the host city for the 2020 Summer Olympics despite their projected budget being approximately $6 billion, when Madrid’s bid was only $1.9 billion, and had a detailed plan where their three levels of government would share the expenses over the next seven years. Sure enough, only a few years later Tokyo’s budget has skyrocketed and the Japanese people are pressuring the government and Olympic committee to limit the spending.

Aerial Views Of Tokyo, 2020 Summer Olympic Games Host City

Stadium from the 1964 Tokyo Summer Olympics. The people of Japan are pushing for this stadium to be used again, instead of spending over a billion dollars to build a new one.

Next, as previously stated, there were only 2 bidders for the 2022 Winter Olympics. The two bid candidates were Beijing, China and Almaty, Kazakhstan, both authoritarian countries with dreadful human rights records that made unappealing candidates. This was not entirely unexpected though. In 2012, the Dutch government predicted that in the future it was likely only non-democratic countries would host the Olympics because only they would have the centralized power and money to organize them. J. Gordon Hylton, a law professor at the University of Virginia who has studied sports law history has further backed up this belief as he stated, “Smaller, relatively wealthy countries realize they’re not going to gain as much from the publicity. The deck is now somewhat stacked in favor of countries who feel they have something to prove to the world,” such as the BRICS (Brazil, Russia, India, China, and South Africa).

The games were ultimately awarded to Beijing, China, a city without snow and no history of winter sports. The IOC publicly praised their Agenda 2020, more specifically the “Affordability Campaign” aspect of the Agenda, as a success when discussing Beijing’s bid. They pointed out how they will be able to save money by using some of the venues from the 2008 Summer Olympics. However, after further investigation it was discovered that the budget was massively understated. At the request of the IOC, the Beijing bid committee had conveniently excluded the cost of a high-speed railway that would take the participants (athletes, coaches, officials, etc.) from Beijing to the Alpine and Nordic ski areas (54 and 118 miles away from the capital, respectively). The estimated cost of this project alone is $5 billion. Add on the cost that it will take to divert water to the ski areas in the north for the purpose of artificial snowmaking (in 2008 China launched an $80 billion water diversion program from the south to Beijing for the Summer Olympics), and it is easy to see that affordability was not a main concern for both the bid committee and/or the IOC.

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A picture taken in the middle of January of the mountain where the ski events will take place during the 2022 Beijing Winter Olympics.

It appears that people have caught on to the ways that the IOC and FIFA conduct their business. For them it is all about making as much money as possible. Looking at the Rio 2016 Olympics, TV companies paid a combined $4.1 billion to broadcast sports for 19 days. The 11 global sponsors bankrolling the games have a combined market value of over $1.5 trillion, and each paid a minimum of $120 million just to be associated. In total, it is expected that the games brought in $9.3 billion in marketing revenues.

The IOC claims that they only take 10% of all the money generated by the games, and pumps the other 90% back into supporting the athletes via the national Olympic bodies of each country. Yet, a recent study showed that just 6% of the money generated by the Olympics goes back to the athletes as salaries. The IOC and the national Olympic bodies spend the rest as they see fit. For comparison, National Hockey League players get 50% of all hockey related revenue. National Football League players get 47% of all defined revenue. National Basketball Association players get 49-51% of all basketball related revenue. Major League Baseball players have received 48.5-51.7% of all basketball related revenue since 2006. It is criminal how little the majority of athletes are compensated, despite the fact that they are the reason that these events are so successful.

As previously stated, it appears that people have begun to catch on to the way that these unregulated; international monopolies conduct their business. Of the 7 bid candidates that expressed an interest in hosting the 2024 Summer Olympics after the Agenda 2020 was launched, 4 have already withdrawn their bid after seeing that it was all smoke and mirrors. Ironically, Los Angeles is one of the three remaining bidders, as they were the last host (1984) to have their Olympic Games result in a surplus ($215 million). The reason why this occurred is very similar to the current situation surrounding the Olympics and the IOC.

The negative image surrounding the Olympics due to some issues at the previous games lead to Los Angeles being the only suitor for the ’84 Games. The IOC had lost all of their leverage and LA took full advantage. They negotiated/demanded that no public money was spent on the Games, and got the USOC/IOC too guarantee the city against any operating losses. They mainly used venues from the 1932 Games, instead of constructing all new venues, which rarely if ever occurs today. The minimal construction budget they did have for smaller venues was completely backed by corporate financing. They also refused to build a brand new Olympic Village to house the athletes, coaches and trainers, which nowadays can alone cost billions. Instead they used the dorms from USC and UCLA as they were empty with students gone for the summer. It’s been proven in the past that there is a better way for these mega-events to be run that don’t just benefit one side.

The IOC and FIFA are two of the biggest sport monopolies in the world. What spectators see on TV is the version that these organizations want to portray. They want viewers to see the amazing competition and inspirational stories of the athletes and their journey that lead them there. They want people to view it as a spectacle, unrivalled by any other event. They don’t want you to know about all of the corruption and manipulation that takes place within the organization. They don’t want you to know that many host cities and their local populations are left devastated and don’t recover for years or decades after hosting these mega-events. They don’t want you to know that you CAN say NO when they call on your city to place a bid. They don’t want you to know that they need you, and not the other way around. You have all the leverage.

References:

Zimbalist, A. (2016). Bread or Circuses?. In A. Zimbalist, Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup (2nd ed., pp. 127-164). Washington, D.C.: Brookings Institution Press.

Mullen, J. (2016). Tokyo struggles to make an economic success of 2020 Olympics. CNNMoney. Retrieved 14 October 2016, from http://money.cnn.com/2016/08/23/news/economy/japan-tokyo-olympics-cost/

Roberts, D. & Whiting, R. (2016). Are the 2020 Tokyo Olympics in Trouble?. Foreign Policy. Retrieved 14 October 2016, from http://foreignpolicy.com/2016/02/19/are-the-2020-tokyo-olympics-in-trouble/

Manfred, T. (2015). What the abandoned venues from the 2004 Athens Olympics look like now. Business Insider Australia. Retrieved 13 October 2016, from http://www.businessinsider.com.au/2004-athens-olympics-venues-today-2015-7#the-beach-volleyball-center-where-weeds-are-growing-through-the-sand-1

5 thoughts on “Mega-sport events as “Circus Maximus”: Short-Term Thrill, Long-Term Agony

  1. The Author of this article has crafted a strong argument against the hosting of mega events, especially under the façade of the events being economic drivers. While I agree that some of these events have been major disappointments, such as Montreal’s 1976 Olympic Games or India’s scandal filled 2010 Commonwealth Games, we must not dismiss the power of that these events have to revitalize and strengthen a host society.
    One does not need to look outside our borders to find an example of a successful Mega Event. The 2010 Winter Olympics held in Vancouver on February 12-28, 2010, showcased Canada to the world. The games provided the city, and arguably the country, with a number of tangible and intangible benefits.

    The following four intangible benefits have been identified: diffusion of knowledge and governance reform, emotional capital, social change, and image enhancement. These nonfigurative advantages have manifest in many different ways, such as better knowledge of program implementation, and a renewal in civic pride. While these may seem trivial when discussing the spending of millions of dollars, these benefits did make their way back to the tax payers of Canada in one form or another.

    However, the 2010 Games also delivered concrete benefits to the host as well. According to some authorities, the games were a catalyst for infrastructure, programs and initiatives, technological and environmental improvements, and business network expansion. The most obvious of these are the investment made by the city into their transportation infrastructure, and the sport venues that are now utilized by Canadian elite athletes.

    While this is a brief glimpse into a successful host city, I am not blind to some of the negative social issues of Vancouver 2010. It is important to know that Mega Events are altogether bad. We tend to focus on the negative aspects of the events, and then over exaggerate the benefits. The author did an excellent job of pointing out the corruption of the IOC, but we must not abandon any hopes of using these events for good.

    I would recommend reading Kiki Kaplanidou and Kostas Karadakis’ 2010 article “Understanding the Legacies of a Host Olympic City: The Case of the 2010 Vancouver Olympic Games” for a look at a positive mega event experience.

    Kaplanidou, K., & Karadakis, K. (2010). Understanding the Legacies of a Host Olympic City: The Case of the 2010 Vancouver Olympic Games. Sport Marketing Quarterly, 110-117.

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  2. Hey Brendan,

    Great post! While I was more or less familiar with the dire situation surrounding recent mega events (like the Olympics and FIFA World Cup), there was one aspect of your post that was new to me.

    I was shocked at how little the athletes are compensated when compared with their professional counterparts. I wonder how much of this is the result of the respective Players’ Associations in each league, and the fact that there is a lack of such a governing body at the Olympic and national level. Given the fact that most Olympic athletes likely spend close to a full work day perfecting their sport each day, it seems criminal that they are not being compensated appropriately for representing their country at such a high level.

    I found an interesting infographic that delved into exactly how Olympic athletes make a living (link below). The part that I found most troubling was that most athletes (especially the ones that don’t have endorsements or corporate sponsorships) end up having to have part time jobs. Jazmine Fenlator, a bobsled driver, is a part-time dog walker. Jonathan Cheever, a snowboarder, is a plumber. Finally, Suzy Favor Hamilton, a runner, claims that depression drove her to become a professional escort.

    It really is alarming how much we expect from and the incredible pressures placed on these athletes given how poorly they are compensated.

    (http://www.sportsmanagementdegreehub.com/wp-content/uploads/2014/05/OlympicSalaries.jpg)

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  3. I agree with Tom’s comment on the success within the Vancouver winter Olympic games. The media looks for constant negative social issues about a mega-event to portray throughout the entire event. With Vancouver they showcased themselves to the world. Millions of viewers saw how beautiful our country was and the pride we had for our athletes. It was an inspiration to the nation.

    With reference to utilization of infrastructure post games I believe it is inevitable in the design and preparation involved within the games. Looking back at Calgary hosting the winter Olympics in 1988 all their infrastructure for those games are continuously being used. Tourists can experience bobsledding on the actual track used in the Olympics.

    What I believe to be a major issue is certain countries are recklessly spending to make the games great in hopes of increasing tourism. Reflecting back on my article “Rio’s Broken Promise,” Rio promised their citizens all these increased in economy for hosting the Olympics, yet Rio ended up over-spending and losing money. They lost sight of their goal. They went from putting their economy and residents first to giving contracts to people based on their hierarchy within the country. If Rio planned their Olympics similar to Barcelona the spending and loss wouldn’t be an issue. There stadiums could be put to use and their athlete’s village could provide true GDP for the country. Instead Rio allowed the contractor to use the village as high end condominiums for “potential” tourists. Why wasn’t the residents of the country put first?

    I believe issues like the Rio Olympics are reasons why mega-events get such a negative backlash. People see the reckless spending and wonder what could it possibly be benefitting in the future. If all this money can be used for one event why is there so many starving people in the world? Why do so many villages and towns still not have clean drinking water? A large debate can be created within this issue at hand.

    Cuadros, A. (2016, August 1). The Broken Promise of the Rio Olympics. Retrieved September 27, 2016, from http://www.theatlantic.com/international/archive/2016/08/building-barra-rio-olympics-brazil/493697/

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  4. There is no doubt that the Games can be hosted in a more efficient way, much like Vancouver in 2010. Unfortunately, this is rarely the case. As Brittany said, due to the fact that we are a developed country that has hosted multiple Olympics before, it is not overly surprising that Canada learned from it’s past mistakes and hosted a successful event. The main issue is all of the “developing” countries that are bidding for the games and basically starting from scratch with the dream of hosting an event that is going to be their legacy moving forward. The facts show that this rarely happens. I think a lot of the blame should still have to fall back on the IOC or FIFA for selecting these cities to host when they are just not ready to do so.

    I hate to keep picking on Brazil, but for the 2014 FIFA World Cup they spent more than $3 Billion to build or renovate 12 stadiums to host the event. The aftermath of the event and how the stadiums are being used makes you feel sad for the people living in Rio. The most expensive stadium cost $550 million to build. It hosted a total of 7 soccer games and is now being used as a bus parking lot, as there are no top-division teams in the area. Another stadium cost $300 million to build, it’s hosted a total of 11 events since the end of the tournament. The local soccer team won’t even play there because it’s too expensive. Another stadium was closed due to a roof that was leaking, and homeless people were now living in the empty locker rooms. Another stadium cost $215 million to build. At least this stadium has soccer being played in it, but unfortunately they are only drawing between 500-1,000 fans a game. Other stadiums have begun hosting weddings, parties, conferences, and fairs. The blame shouldn’t fall just on Brazil. It’s a shame that FIFA continuously tries to host their events in countries that are starting from scratch when there are many countries in locations in Europe and North America that already have the stadiums and infrastructure to host the events.

    http://www.businessinsider.com/brazil-world-cup-stadiums-one-year-later-2015-5

    Brittany, I totally agree that it’s completely unfair how little the athletes get out of the Olympics compared to the IOC. You already explained it pretty well and the link from your first post was eye opening. I posted a link at the bottom of my post showing the accommodations that the Team USA Men’s and Women’s Basketball teams had instead of staying in the Olympic Village like the rest of the athletes. Pretty much sums up the income disparity between the “professional” athletes and the “Olympic” athletes.

    http://www.usatoday.com/story/sports/olympics/rio-2016/2016/08/04/usa-basketball-cruise-ship-rio-carmelo-anthony/88203306/

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