Yes, the Olympics are expensive – but they can also be an investment

A sign protesting Switzerland’s bid for the 2026 Winter Olympics. Image: Getty.

Poor Olympic Games, poor IOC.

Rich in cash, of course – wallowing in it, some might say – but poor, it seems, in esteem. Calgary is the latest city to suffer the indignity of a proposed Olympic bid being scuppered by a public referendum. And how we – or at least those of us who don’t work in Olympic sport – love it when the Olympics and the IOC get a bloody nose.

“Nobody can afford to host the Olympics but at the IOC the largesse never stops”, read a gleeful headline from the Guardian, actually published a couple of weeks before the vote, nicely summed up the prevailing (western) attitude to the Olympics, for those without any skin in the game(s).

Written by someone, calling calling himself an ‘unlucky sucker’, who claims to love the Olympics, it continues: “Potential host cities are dwindling to an embarrassing low and yet the International Olympic Committee seems to still be living in the era when money is no object”. With friends like that… etc, etc.

Partly, as we all know, the IOC doesn’t help itself. Covering the Olympic movement, you can’t help but come close to gagging on the sickly-sweet diet of first-class air travel, luxury limos, opulent hotel suites and exclusive dinners that constitutes life inside the bubble of IOC membership.

Indeed, the Guardian article didn’t fail to recycle the (probably fallacious) story that the IOC’s ‘rider’ for hosting the 2022 winter Olympics in Oslo (which subsequently dropped out of the race) was 7,000 pages long and stipulated that IOC members get a cocktail reception with the Norwegian royal family, exclusive use of special road lanes and priority treatment at airports and hotels, “but stopped just short of Van Halen’s famous request for a bowl of M&Ms with all the brown ones picked out.”

I have interviewed a series of IOC members and those close to the IOC in recent months and years and can’t help feeling that they, or many of them, still don’t get it. Often, they seem genuinely hurt and baffled when asked what the IOC can do to reverse the received wisdom (recycled again and again by the world’s media) that its members are out of touch and over-entitled and that the games are elitist and just, somehow, neither of, nor for, the people.

This is despite the fact that a millionaire Olympian is, on the whole, an oxymoron, while a millionaire in football, the ‘people’s’ game, is just the football billionaire’s poor relation (yes, I know football is in the Olympics, but it’s telling that it’s an under-23 tournament and the stars don’t take part – they know they can earn much, much more with their clubs).

For, like it or not, the reason that cities keep dropping out of Olympic bid races is money. Just consider the Calgary bid campaign, which seemed absolutely incapable of derailing the runaway juggernaut of public debate from the preordained tramlines of ‘think-how-many-schools-and-hospitals you-could-get-for that-amount-of-money’ that the ‘NOlympics’ lobby had laid down for it.

Yet show me, if you can, all the schools and hospitals that the nine cities and states that have rejected the Olympics in referenda in the last five years have built with the money they saved. You can’t? Thought not.

The point about the Olympic Games, if they’re done well, is that they’re not a cost; they’re an investment. Just take a look at the post-industrial wasteland that was the east end of London before the 2012 games, and then look at it now. The UK government knew this (or at least it was eventually brought round to believing it), which was why it went ahead with the games without feeling the need to call a referendum.


It’s true that costs multiplied over the course of the bid process, and that the eventual all-in cost of approximately £9bn ($11.6bn) was several times the amount originally forecast. But that’s not £9bn to host an Olympic Games, it’s £9bn to regenerate a massive area of one of the world’s great cities – transport, infrastructure, housing, sports facilities for all and, yes, even a school.

And, hey, you know what? The costs of major infrastructure projects nearly always do overrun. A recent report found that cost and revenue overruns of Olympic Games between 2000 and 2018 are broadly comparable to those of other similar large-scale projects.

The study, by academics at Germany’s Johannes Gutenberg University and France’s Paris Panthéon Sorbonne, found that: “The core Olympic capital investments considered in this study show cost overruns, but they are similar to the cost overruns of other (non-sporting) mega projects.”

Moreover, the study also found that “All Games underestimated their revenues and had revenue overruns,” and that “the costs of organising the Olympic Games (OCOG budget) are usually covered by revenues, which are almost entirely private resources plus the International Olympic Committee (IOC)’s contribution.”

Calgary’s budget for hosting the winter Olympic Games, including delivery and games operations, all venues, housing, legacy endowment and contingency funds, was a relatively modest C$5.1bn ($3.9 bn) in C$2018. That’s still a lot of money, some might say, but a lot of money compared to what? Canada’s federal budget for 2018-19 is C$338.5bn – and remember that’s for just one year. The costs of hosting the games would have been spread over seven years.

Back in the UK, it’s now six years since those £9bn games, and the government’s current pet project is ‘HS2’, a high-speed rail line linking London, Birmingham, the East Midlands, Leeds and Manchester. Scheduled to open in phases between 2026 and 2033, high-speed trains will travel at up to 400 kilometres an hour on 330 miles of track.

Sounds expensive? It is. The budget is now £56bn – more than six times the cost of the Olympics, and an increase of 71 per cent on the initial projection in 2010 of £32.7bn.

I live in the UK. Did anyone ask me whether I wanted this rail line? Nope. Did anyone give me a choice between this and £56bn worth of schools and hospitals? Don’t make me laugh. The government did what it was elected to do and made that difficult spending choice for me. If I don’t like it, I can see what can be done about it at the next election.

So why is it different for Olympic Games?

This article originally appeared on Sportcal.

 
 
 
 

Joe Anderson: Why I resigned from the Northern Powerhouse Partnership

Liverpool Lime Street station, 2008. Image: Getty.

The Labour mayor of Liverpool has a few choice words for Chris Grayling.

I resigned from the board of the Northern Powerhouse Partnership this week. I just didn’t see the point of continuing when it is now crystal clear the government isn’t committed to delivering the step-change in rail investment in the North that we so desperately need. Without it, the Northern Powerhouse will remain a pipedream.

Local government leaders like me have been left standing at the altar for the past three years. The research is done. The case has been made. Time and again we’ve been told to be patient – the money is coming.

Well, we’ve waited long enough.

The only thing left is for the transport secretary to come up with the cash. I’m not holding my breath, so I’m getting on with my day job.

There’s a broader point here. Rail policy has been like a roller-coaster in recent years. It soars and loops, twisting and turning, without a clear, committed trajectory. There is no consistency – or fairness. When London makes the case for Crossrail, it’s green-lit. When we make the same case for HS3 – linking the key Northern cities – we are left in Whitehall limbo.

Just look at the last week. First we had the protracted resignation of Sir Terry Morgan as Chairman of HS2 Ltd. Just when we need to see firm leadership and focus we have instead been offered confusion and division. His successor, Allan Cooke, said that HS2 Ltd is “working to deliver” services from London to Birmingham – the first phase of the line – from 2026, “in line with the targeted delivery date”. (“In line?”)

Just when HS2 finally looked like a done deal, we have another change at the top and promises about delivery are sounding vaguer. Rumours of delays and cost over-runs abound.

Some would like to see the case for HS2 lose out to HS3, the cross-Pennine east-west line. This is a bit like asking which part of a train is more important: its engine, or its wheels. We need both HS2 and HS3. We are currently left trying to build the fourth industrial revolution on infrastructure from the first.

If we are ever to equip our country with the ability to meet rising customer and freight demand, improve connectivity between our major conurbations and deliver the vision of the Northern Powerhouse, then we need the key infrastructure in place to do that.


There are no shortcuts. Ministers clearly believe there are. The second piece of disappointing news is that officials at the Department for Transport have already confirmed to the freight industry that any HS3 line will not be electrified, the Yorkshire Post reports.

This is a classic false economy. The renaissance of the Liverpool Dockside – now called Superport – is undergoing a £1bn investment, enabling it to service 95 per cent  of the world’s largest container ships, opening up faster supply chain transit for at least 50 per cent  of the existing UK container market. Why squander this immense opportunity with a cut-price rail system?

Without the proper infrastructure, the North of England will never fulfil its potential, leaving our economy lop-sided and under-utilised for another generation. This is not provincial jealousy. Building a rail network that’s fit for purpose for both passenger and freight will remove millions of car journeys from the road and make our national economy more productive. It will also be cleaner, cheaper and more reliable. Our European neighbours have long understood the catalytic effect of proper connectivity between cities.

Similarly, linking together towns and key cities across the North of England is a massive prize that will boost growth, create jobs and provide a counterweight to Greater London, easing pressures on the capital and building resilience into our national economy.

To realise this vision, we need the finance and political commitment. Confirmation that the government is pushing ahead with HS3 – as well as HS2 – is now sorely needed.

With Brexit looming and all the uncertainly it brings in its wake, it is even more pressing to have clarity around long-term investment decisions about our critical infrastructure. Given the investment, the North will seize the chance.

But until ministers are serious, I have a city to run.

Joe Anderson is the elected Labour mayor of Liverpool.