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 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… 

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’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.

 
 
 
 

To make electric vehicles happen, the government must devolve energy policy to councils

The future. Image: Getty.

Last week, the Guardian revealed that at least a quarter of councils have halted the roll-out of electric vehicle (EV) charging infrastructure with no plans to resume its installation. This is a fully charged battery-worth of miles short of ideal, given the ambitious decarbonisation targets to which the UK is rightly working.

It’s even more startling given the current focus on inclusive growth, for the switch to EVs is an economic advancement, on an individual and societal level. Decarbonisation will free up resources and push growth, but the way in which we go about it will have impacts for generations after the task is complete.

If there is one lesson that has been not so much taught to us as screamed at us by recent history, it is that the market does not deliver inclusivity by itself. Left to its own devices, the market tends to leave people behind. And people left behind make all kinds of rational decisions, in polling stations and elsewhere that can seem wholly irrational to those charged with keeping pace – as illuminted in Jeremy Harding’s despatch from the ‘periphery’ which has incubated France’s ‘gilet jaunes’ in the London Review of Books.

But what in the name of Nikola Tesla has any of this to do with charging stations? The Localis argument is simple: local government must work strategically with energy network providers to ensure that EV charging stations are rolled out equally across areas, to ensure deprived areas do not face further disadvantage in the switch to EVs. To do so, Ofgem must first devolve certain regulations around energy supply and management to our combined authorities and city regions.


Although it might make sense now to invest in wealthier areas where EVs are already present, if there isn’t infrastructure in place ahead of demand elsewhere, then we risk a ‘tale of two cities’, where decarbonisation is two-speed and its benefits are two-tier.

The Department for Transport (DfT) announced on Monday that urban mobility will be an issue for overarching and intelligent strategy moving forward. The issue of fairness must be central to any such strategy, lest it just become a case of more nice things in nice places and a further widening of the social gap in our cities.

This is where the local state comes in. To achieve clean transport across a city, more is needed than just the installation of charging points.  Collaboration must be coordinated between many of a place’s moving parts.

The DfT announcement makes much of open data, which is undoubtedly crucial to realising the goal of a smart city. This awareness of digital infrastructure must also be matched by upgrades to physical infrastructure, if we are going to realise the full network effects of an integrated city, and as we argue in detail in our recent report, it is here that inclusivity can be stitched firmly into the fabric.

Councils know the ins and outs of deprivation within their boundaries and are uniquely placed to bring together stakeholders from across sectors to devise and implement inclusive transport strategy. In the switch to EVs and in the wider Future of Mobility, they must stay a major player in the game.

As transport minister and biographer of Edmund Burke, Jesse Norman has been keen to stress the founding Conservative philosopher’s belief in the duty of those living in the present to respect the traditions of the past and keep this legacy alive for their own successors.

If this is to be a Burkean moment in making the leap to the transformative transport systems of the future, Mr Norman should give due attention to local government’s role as “little platoons” in this process: as committed agents of change whose civic responsibility and knowledge of place can make this mobility revolution happen.

Joe Fyans is head of research at the think tank Localis.