Expensive Hot Potatoes: Why No One Wants To Host The Olympics
During my school days, I would often have to learn many short stories across English, Malayalam, and Hindi as part of my education. One such story is called ‘Athithi Tum Kab Jaoge’ (Guest, when will you leave?). The premise of this story is very simple - a family has to deal with a cumbersome guest who has overstayed his welcome. Sharad Joshi writes this in a fairly satirical manner, taking a topic we would not speak of publicly, and crafts a wonderful story. We love to host people, yet we do not expect our guests to stay beyond a certain time, especially if there is no mitigating circumstance to justify the same.
Hosting guests from outside is a matter of pride or at least something that makes us act differently. We try to show our best versions and accommodate the people that come in and ensure they have a good time. We prepare special snacks and drinks, engage in chit-chat and if there are kids around, pamper them. This is similar to how nations treat major events that bring in people from abroad, particularly major sporting festivals like the FIFA World Cup and the Olympics. Special infrastructure is created to ensure a sporting spectacle as well as to provide competitors and tourists alike with a wonderful experience. Countries also view these events as a chance to project soft diplomatic power and boost various industries, mainly the tourism industry. However in recent years, the interest amongst nations to host these major events has declined. In fact, the latest edition has been marred by postponement and a reluctance from the Japanese public because of the public health situation - but that is also not the only factor. Why is that the case? We shall find out.
(Note: The main focus for this piece is the Summer Olympics and the FIFA World Cup. This is mainly because these are two sporting events that grab the most attention globally, but references to other sporting events will be made).
Humble Beginnings
In 1896, when the first edition of the Modern Olympics was held (there was the Ancient Olympics held between Greek city states as part of the Panhellenic Games) in Athens, 251 athletes from 13 nations participated across 9 disciplines. We cannot compare, in terms of prestige, the initial few editions with the last few. A French baron named Pierre de Coubertin was responsible for creating the organisation that would formally kick off the recognised version of the Olympics (the International Olympics Committee). He would also guide them through the initial turbulent years, when world fairs were the real attractions and the Olympics was just the athletic sideshow. It was not until the 1924 Olympics in Paris, when 3000 athletes (100 of which were women) from 44 nations participated, that it started finding it’s own niche.
Before football became the sport of the world, and FIFA it’s arbitrators, the game was introduced as exhibition shows, which was then integrated as a medal winning discipline. Only amateurs could take part, meaning many footballers who were paid by domestic clubs were ineligible and not a part of this event. FIFA, founded a decade earlier, took charge of organising the football event in 1914 and after Uruguay won two gold medals in the 1920’s, FIFA saw an opportunity to organize their own world-spanning tournament, with the aforementioned Uruguay to host the first edition in 1930 (also celebrating the nation’s centenary of independence).
But participation in the initial editions of these tournaments was not easy to procure: travelling was much more difficult than in modern times, meaning European teams were reluctant to travel to Uruguay in 1930, some South American nations did not make it to Italy in 1934, and the by-then two time champions Uruguay chose not to defend their title and did not make the journey to Italy. The ‘founders of football’ (It’s coming home…), England and the rest of the British Isles refused to recognize FIFA and it wasn’t until 1946 that they joined FIFA and took part in the other editions. And later on, a mix of financial and travel issues as well as prioritization of Olympics ensured that the 1956 Olympic Football semi finalists - India, did not travel to Brazil for the 1950 World Cup (this was the closest India would ever get to a FIFA WC).
But to come back to the main point, these sporting events were in their infancy and there was no other stakes than athletes looking to win trophies or medals and break records. At what point did just hosting these events become more than just about the sport?
Politics brings strength to sporting events
Many consider the 1936 Olympics held in Berlin to be a game changer, not just in how the world perceived the nation, then under the regime of the infamous dictator Adolf Hitler, but also how Nazi Germany used a sporting event to project power across the world. News of German atrocities against Jews had already spread across the world, and many of the nations that eventually would form the Allies (USA, France et al) considered boycotting the Berlin Olympics. Hitler and his propaganda minister Goebbels (who were handed the hosting responsibility by another administration) used this to whitewash all the crimes they were committing, while also ‘proving the supremacy of the Aryan race’. For a few weeks leading up to the Olympics, Hitler ordered removal of anti-Semitic graffiti on the streets, whilst denying German Jews a chance to participate in the Games as well as underhanded negotiations with other nations to prevent Jewish athletes participating in various events.
(Fun fact: The Olympic torch and the relay was first introduced at this edition)
The 1936 Olympics would be remembered by history as the African American athlete Jesse Owen’s shattering of this theory by dominating the track events of the Olympics. India, under British rule at the time, also came to Berlin and dominated Germany in the hockey final, scoring 8 goals with the legendary Dhyan Chand scoring 3 goals. He also refused an offer from Hitler to join the German army, but those stories tend to be more in the lore category.
As we know, sport took a backseat for the best part of the 1940’s as the ultimate war to settle scores from three decades took place. The Allies won, with Nazi Germany and the Axis powers conceding defeat. But the impact of the 1936 Olympics was two fold - nations saw the Olympics as a tool to showcase their capabilities and build economic strength, and more politically motivated boycotts and threats to withdraw from participation ensued.
The political overtones of the Olympics did not lessen with the fall of Nazi Germany. In 1956, Egypt, Iraq, and Lebanon boycotted the Melbourne Games to protest the Anglo-French seizure of the Suez Canal, and the Netherlands, Spain, and Switzerland boycotted as well to protest the USSR’s invasion of Hungary. In Mexico City in 1968, two African American runners (Tommie Smith and John Carlos) used the victory pedestal to protest U.S. racial policies (famously known as the Black Power salute). In the Munich Olympics in 1972, 11 Israeli athletes were massacred by Palestinian terrorists. And in 1976 in Montreal, 33 African nations, to be represented by about 400 athletes, boycotted the Games to protest South Africa’s apartheid policies.
The most serious disruptions to the modern Olympics, however, occurred in 1980 and 1984. In 1980, under strong pressure from the Carter administration, the U.S. Olympic Committee voted to boycott the Summer Games in Moscow to protest the 1979 Soviet invasion of Afghanistan. About 40 nations followed suit, including West Germany, China, and Japan, depriving the Soviets of their chief athletic competition and raising doubts about the future of the Olympic movement. Although the 1984 Winter Games, in Sarajevo, Yugoslavia, proceeded without boycotts, the Summer Games, in Los Angeles, were undercut by an Eastern-bloc boycott led by the USSR. Fear of an openly hostile environment in Los Angeles was cited by the Soviet Olympic Committee as the reason for non participation, but most commentators believed the reasons to be political: the poor state of recent U.S.-Soviet relations, revenge for the U.S. boycott in 1980, and possible embarrassment to the Soviets on worldwide television caused by planned anti-Soviet demonstrations and defections of Eastern-bloc athletes. The popularity and financial success of the 1984 Los Angeles Games were, however, greater than anticipated.
One thing to note, is that not every Olympic host has to build infrastructure specifically for the Games. The 1948 Olympics held in London was on a tight budget of 30m dollars, with most of the sporting infrastructure already in place. But others saw this as a chance to strengthen their image to the world. The 1960 Rome Olympics did a world of good for Italy, and the Tokyo Olympics of 1964 saw major infrastructural developments in addition to sporting achievements, with the bullet train having originated due to the massive spending for the preparation of the Olympics.
The 1976 Montreal Olympics saw major spending and over budgeting to the tune of billions. An estimated 145m budgeted event scaled to a 2 billion dollar spend due to grandiose and experimental architecture, unreasonably high prices from suppliers and contractors, and long-term borrowing. The 1984 LA Olympics was scaled down, but it was largely achieved due to Los Angeles having an established sporting infrastructure. With the 1992 Barcelona Olympics showing that there was major value in rebuilding the city to host a grand scale event, grandiose spending became the norm.
Ending up broke - the economics of playing host
So let’s move to the present times, where we have established from recent history that there is significant economic, geo-political, and sporting value to hosting these major events. But the economics of revamping existing sporting infrastructure (or creating new stadia) to meet the stringent codes of both the IOC as well as the respective sporting federations, as well the underhanded dealings required to win bids has dampened enthusiasm amongst governments and people alike in hosting international sports festivals.
Before we delve into the examples of the effects of these events we need to understand how a bidding process works for both FIFA World Cups and the Olympics. There is a bidding process for both events, held almost a decade (nine years) before the edition these cities/countries will try to host. In both cases, city leaders will consult with the public and administrators alike on whether they should be part of the sporting festivities. It can happen that cities may not wish to undertake this venture.
For example, Vancouver from Canada decided not to be one of the cities that will play host to the 2026 FIFA World Cup jointly held by Mexico, USA, and Canada over concerns that taxpayers would have to end up covering hidden costs that would not be accounted for in the initial budget (Vancouver has experience with the 2010 Winter Olympics and 2015 Women’s World Cup and as we have seen already with Montreal closer to their home, costs can spiral upwards very quickly).
In fact, the overall bidding process itself can go into the millions, and that too without a certainty that the bid will be accepted. Cities often take multiple tries to get a successful bid like Rio De Janerio and Tokyo, who had tried for previous editions. In addition to the costs, there is also a two step process where cities have to file answers to questionnaires asking if they are ready to organise an event of this scale and how they would propose to overcome their current shortcomings. The second step is a more vigorous one than the initial step, and involves IOC and sporting officials visiting the cities and inspecting the current state of the city, followed by a vote at a neutral place by all nations except the competing nations/cities.
Pay me or you lose
There in this phase itself, there is tremendous scope for bribery which can ruin legitimate bids and give an undue advantage to the bribers. Since every country in both IOC and FIFA gets a single vote, the representatives of each country are prime targets to pay off into a particular direction. There is clear evidence since 2015 that football officials from various countries were bribed to vote for Russia and Qatar (2018 and 2022 FIFA WC respectively), with some caught on tape and some receiving off-shore payments to the tune of millions. Despite many outcries against Qatar being the hosts due to various reasons including - lack of a pre-existing sporting infra and football culture, shifting the WC to winter season for the first time ever due to inhospitable summer conditions, treatment of South Asian migrant workers and money muscling their way into the WC, FIFA has stood strong on Qatar remaining the host in 2022.
Both Germany and South Africa have faced the same allegations against their FIFA World Cup winning bids ( 2006 and 2010 bids respectively). The IOC has not remained clean either, with allegations of both the 2002 Salt City Winter Olympics and the 2020 Tokyo Olympics having the winning bids being tainted by bribes to IOC officials. Yet many of the cynical side would assert that some form of gifts or bribes to high ranking officials, who could decide the fate of whether a city or country gets to host a major event, is inevitable.
Blowing up the money
The other aspect, once the bid is won of course, is how to keep costs under control. Since 9/11, a major emphasis on money spent is to ensure top class security and prevent any 9/11 size events or even the 1972 Munich type terrorist attacks. But Athens is an example of how high scale spending does not always transform into positive economic impact, but can lead to worse things to come.
Greece is a nation which has a smaller total population than that of Tokyo city. They tried unsuccessfully for the 1996 Olympics, which would have been the centenary of the modern Olympics but got their chance in 2004. They ended up spending over 11 billion dollars on hosting the Olympics (twice the estimated budget, with 1.2 billion dollars spent on security alone). This was excluding major infrastructure projects like airports and transport projects pushed to be completed by 2004, at a higher cost than expected. Some argue that the latter would have created a positive impact for Greece, but critics point to the fact that many of the stadia built for specific Olympic events went to waste without a proper plan for their use post-Olympics. For sports stadiums that will not be used post-Olympics, because many Olympic sports will not be popular in the host nation/city, they will find other ways to use it.
For example, the 2012 London Olympic stadium, featuring mainly track and field events, was converted to a football stadium and leased to West Ham United FC, a London based football team for 99 year at a marginal cost of 2.5m per year. This was a boon for the West Ham owners, who got a 60,000 seater football stadium at a very low cost (Arsenal and Tottenham, both London based clubs, had spent 390m and 1 billion pounds respectively to build their own football stadia for the same seating size). This was a good way for the British government to utilize the infrastructure built, despite complaints of the low leasing cost to a Premier League team who could easily spend a lot more (and there are still taxpayers subsiding this stadium cost) as well as West Ham fans who saw their older stadium they had a better connection to destroyed and move to a stadium ‘with less soul’.
In any case, the 2009 financial crisis cannot be directly attributed to the Athens Olympics. The scale of the crisis is far too large to be attributed to the Olympic spending. Nonetheless, some people argue the largesse produced by the Olympics stands as a symbol of reckless spending, and the spiraling costs of the Olympics showed how reckless the Greece administration was with their economic resources.
Even in a football crazy country like Brazil, citizens were not happy with the impact a World Cup and an Olympics in quick succession had on their nation. In relation with the London stadium, Brazil built a football stadium in a remote part of the country called Manaus, for 270m dollars, where access is so remote that building materials had to be shipped across the Amazon (river, not the company) and had no club in the area that could use the stadium after the WC (Chelsea and Tottenham also showed interest in acquiring the London stadium as a contrast). This was just one of the many reasons tensions were high amongst Brazilians at the prospect of hosting two global events.
In 2014, international economic forecasters projected that Brazil would earn over three billion dollars from hosting the World Cup. Instead, Brazil ended up losing over eleven billion dollars, and ended up spending roughly four billion dollars building and maintaining stadiums, three times the original estimate.
The 2016 Rio Olympics were supposed to be the second of a one-two punch announcing Brazil’s arrival as a world power through dominance in sports. But in many ways, the opposite unfolded. Timed with an embarrassing political corruption scandal and the largest economic crisis in Brazil’s history, the hosting of the 2014 World Cup and 2016 Games has resulted in a perfect storm of unfulfilled promises.
While 15 of the original 27 venues have hosted some sort of event since the Games, others sit largely abandoned, their decay and disrepair a constant reminder of what was meant to be. Even the iconic soccer stadium, the Maracanã, has been vandalized, and had its power shut off completely after amassing a $950,000 electric bill.
In addition to this, there are arcane and absurd rulings hosts must follow as per the agreements with the organisations. As part of the 2014 FIFA World Cup, Brazil had to reverse a law on alcohol bans because Budweiser, an alcohol company, was a FIFA sponsor. FIFA even takes most of the profits and benefits from tax breaks, leaving the host country with less benefits as the losses they incurred showed (see above).
Even closer to home, we have seen how the Commonwealth Games (Olympics but contested by all the former colonies of Great Britain except USA) held in 2010 by Delhi was marred by major corrupt practices, with inflated expenses on items and lack of accountability across the governments and sports agencies. Despite the major successes by Indian athletes (finishing ahead of Great Britain in the medals table), the bigger legacy it left was on the then sports minister Suresh Kalmadi and the parties in power at the Centre (United Progressive Alliance led by the Indian National Congress) who lost face and subsequently lost the next general elections to Narendra Modi and the Bharatiya Janata Party. The BJP maximised the impact of corruption scandals involving Congress leaders, of which the CWC Games were one amongst many and presented themselves as an alternative. This was also the catalyst for the end of the 15 year rule of Sheila Dikshit, the Congress CM of Delhi.
Conclusion
From the people’s perspective, going through all this pain and expenses for benefits that are intangible at best is something that has gained ground. As a result, there is less enthusiasm than ever amongst nations to bid for the high profile sporting events. It is kind of like war nowadays, where the cost incurred of being involved is just not worth the benefit of being involved. More cities are choosing not to be part of the FIFA WC processes, and countries are shying away from bidding for the Olympics.
There is no need to use these events as a show of geo-political projection either, as there are many other ways of showcasing the same (even within sport, the new trend is to acquire sporting projects and whitewash their image as the UAE royal family have done with Manchester City, an English football club).
In Athithi Tum Kab Jaoge, the family tries to get this person who seems to have found their home too comfortable to leave through various techniques like switching dinner and breakfast. In the end, the guest does leave the house. Similarly for our nations, the initial thrill and excitement of hosting these events is marred by various incidents before the actual event, as well as the unwanted legacies that linger on long after the tourists and athletes have left the stage. Many are not able to shake off the negative impact these global events have on their cities, leading others to close the door on playing host.
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