The real winners from Rio?

With the 2016 Summer Olympics Games upon us, much of the world’s media has descended on Rio to cover more than 300 events, across 28 sports, for the next three weeks. Early reports have already complimented the facilities in place. This should not come as a surprise. An estimated $14 billion has been spent to date and includes new stadia, sports facilities, transport and communications infrastructure, accommodation, security, etc. The scale of investment is on a par with London 2012 but comes on the back of a similar outlay during the 2014 World Cup. That’s close to $30 billion dollars in 24 months.

While the Games will probably be a sporting success, it’s hard to see how this investment can be justified. A growing list of cities, are now home to unused, dilapidated or demolished Olympic venues. Brazil is likely to encounter similar problems in the years ahead despite the promise of “legacy” effects. Even London recently reported a drop in sports participation four years on from the most recent Summer Games.

Brazil of course will be no stranger to this. Estádio Nacional in Brasília, the second most expensive stadium on the planet, was rebuilt for the 2014 World Cup. The 70,000 seat arena is now primarily used as a bus terminal.

Over the past 40 years, only the Los Angles Summer Games in 1984 generated a net surplus. This was a consequence of the weakened bargaining position of the International Olympic Committee (IOC) when faced with just one finalised bid to host the Games that summer. Riots (1968), terrorism (1972), public debt (1976) and boycott (1980) had all marred the Olympics in the decade beforehand. Los Angeles negotiated a deal with the IOC that maximised the economic benefits to the city.

Since 1984 other cities have jumped on the bandwagon, in an attempt to regenerate urban areas and turn a net profit. While Barcelona and London have been notable example of ‘success’, they failed to generate any financial surplus. This should not be a surprise.

Sporting events like these should not be viewed as investments. They are primarily consumption products. In the past the Games have brought other benefits; mainly a sense of national pride and increased levels of life satisfaction and happiness. If one monetises these, research suggests the Games are worth the cost. The richer the country, the greater the gain. Citizens from wealthier countries need a much bigger increase in income, to those from poorer countries, in order to experience the same jump in happiness.

And herein lies the problem for Brazil. The country is in the unique position of probably being the first developing democracy to stage the Summer Games (the extent of Mexican democracy in 1968 is debatable). This has brought with it problems. The riots at the World Cup were a manifestation of this. The extent to which the Games will make the population ‘happier’ is questionable. With political, economic, health, environmental and housing crises all present, these Games may not be a repeat of the past.

Rio is on the brink of its biggest ever party. A $14 billion hangover is waiting. The city needs to make the most of the next three weeks. While they party, the real winners are probably the taxpayers in Illinois and Spain. Two of the failed bidders for the 2016 Games.

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9 thoughts on “The real winners from Rio?”

  1. I was listening to an American journalist (I think) a few weeks ago, discussing the pros/cons of the olympics. He suggested fewer events, so as to reduce the costs.

  2. Good post.

    There are far too many sports in the Olympics. It is typical of these global institutions that they are based on a good core idea but then try to expand at taxpayer-expense to encompass everything and become all-powerful (the UN is another such one). When this happens corruption and waste inevitably follow. Not to mention political correctness and support for ‘progressive’ causes, which will no doubt become a condition for taking part in a few years. And, in the case of the Olympics, there is the additional problem of drug-taking that renders many of the results meaningless.

    Sports that already have competitions that are ranked as more prestigious than the Olympics should be excluded. So, out should go tennis, golf, soccer and rugby and a few others. Andy Murray has won Olympic gold and Wimbledon. I bet he ranks Wimbledon as 100 times more prestigious. And whoever wins gold in Olympics golf won’t rate it nearly as high as the Masters or the Open (no wonder lots of the top golfers have withdrawn). And we already have World Cups in soccer and rugby which are considered far more important by both players and fans, so what’s the point of trying to duplicate them in the Olympics? As for boxing, I could see the point when the Olympics was strictly amateur. It was good to be able to distinguish the amateur Olympic boxing champions of the world from the professional ones (who would mostly have knocked out the amateur Olympic champions in 30 seconds). But what’s the point when the Olympics generally has gone professional?

    Then there are sports that have very limited appeal and restricted to certain parts of the world – Graeco-Roman wrestling, gymnastics. Who cares about these outside a few countries? I wouldn’t go to see them if they were being held in my back garden. These sports could have their own mini-Olympics centered in the regions where they are popular. and where they already have the facilities. No need for them on the world stage. You might as well have hurling.

    Swimming deserves to be included but is debased by the ridiculous number of events. A good athlete can win at most 2 or 3 golds, but a good swimmer can win 10 to 12 as there are so many different ways to swim. If you applied the same principle to athletics, you’d have all the races duplicated running backwards, running with both hands above your head and so on. As for beach volleyball, the only reason for its inclusion is to guarantee that the mostly male politicians who control the purse-strings will continue to stump up.

    I can’t see anything in these Olympics that would keep me away from Croke Park tomorrow.

  3. There is a common old-fashioned view that big sporting events bring global recognition/prestige for politicians (think of Putin) and post event spikes in tourism but apart from the people directly involved, by September most of the world will have moved on.

    For the World Cup, Brazil was required by FIFA to have 8 stadia ready for the event but 12 were provided with 4 built in cities with no football team in the first division of Brazil’s football leagues — presumably local politicians had a say in the planning.

    This week there have been reports of robberies from Australian and Chinese athletes, and maybe Rio could end up with a worst crime reputation than it has already.

    http://www.telegraph.co.uk/news/2016/08/04/why-rio-olympics-is-on-course-to-be-most-crime-ridden-games/

  4. I am glad you opened up this discussion, as being somewhat parochial, the issue also affects Ireland.
    The Irish exchequer has contributed a lot of money to vanity arena projects over the years, a lot of under the radar.
    The Bertie Bowl, happily, did not make it.
    Even at the height of the recession, €30 million was promised to the redevelopment of Pairc Ui Chaoimh.
    Was that a state priority at a time when medical cards were being withdrawn from people with Downs Syndrome?

    I can well understand the protests in Brazil at the allocation of state resources to vanity projects for politicians, that provide those politicians and assorted jet setting glitterati with photo opportunities.
    Bread and circuses will not work if a sizeable minority of people can barely afford the bread, and certainly cannot afford to go the circuses.

    [I have no intention of watching the Rio Olympics, even though the Tokyo Olympics of 1964 provided real wonderment; watching, on a newly acquired TV, Abebe Bikila (Ethopia) win the marathon for a second time.]

  5. The real winners are the people through whom the billions were spent. Follow the money. Some within the IOC and other sporting organizations. Many within the host countries. Particularly in countries like Brazil where procurement policies and practices might not be up to a particularly high standard.

    Meantime, gotta agree with Michael Hennigan’s comment on swimming and medals. The swimming is just ludicrous. Gymnastics is pretty bad too, with medals for each piece of equipment, plus team events, but swimming is downright embarrassing.

    Apart from the idea of backways or sideways running races (perfectly sensible when you look at swimming’s events), you can also compare to sailing where the event for each class lasts a week, there’s one medal in each class, it’s impossible to compete in more than one class and there are no team or relay events. One medal per person per Olympics, maximum.

    If there was a medal for each race it’d be daft, though still not as daft as the swimming. But at least Ireland would have multiple multiple medal winners. Annalise Murphy would have – for instance – won four Gold medals in 2012.

  6. Has the time not arrived to agree on one venue per continent and stick to it for the next 100 years.

    In Europe I’d go for London
    In North America its Los Angeles
    In Asia its Beijing
    In Africa its Johannesburg
    In Australia its Sydney
    In South America its Rio

    End of. No debate on issues surrounding IOC bribery etc etc and the usual stuff surrounding wasted resources as we’re getting now.

    Six venues to be visited approximately once in a generation i.e. once every 24 years. Sounds about right.

    Why not ?

    I tend to agree on the additional sports such as tennis, soccer, rugby and golf being left out of the party as they already have their mega pay days for their stars. In relation to swimming – swimmers should be limited to competing in a medley event plus one other stroke or two strokes only. Michael Phelps, were he a country in his own right, would I now believe be in the top 40 of countries for All time Olympic medals.

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