There’s one thing that’s hard to deny: since their debut in the modern era in 1896, the Olympic Games have been a big deal. At least to the country that happens to be hosting an upcoming games – you’ll find an often negative response from former host cities, some of which faced devastating financial losses that sometimes leave them a debt exceeding the billion-dollar mark.
Starting in 1960, Olympic expenses started to increase substantially, fueled by negative press surrounded the games. In 1968, Mexico City saw Olympic protestors killed leading up to the games while Munich had the murder of Israeli athletes in 1972.
According to the Council on Foreign Relations it was Montreal’s 1976 foray into Olympic territory, a financial disaster where a budget of $124 million was billions under what costs ended up being for the city, that actually opened the door to countries bidding for the games that had no reasonable way of actually paying for them.
It was Los Angeles in 1984 that became the Olympic golden carrot every host city since has had dangling in front of it – the opportunity to actually make a profit off hosting the games. Los Angeles did this, to the tune of a $215 million operating surplus.
What gets overlooked is that because of the disastrous two decades preceding it combined with the fact it was the only city that even bid on the 1984 games, Los Angeles held the bartering chips when it came to dealing with the International Olympic Committee (IOC). It also had facilities in place, which meant a dramatic savings in construction and infrastructure upgrade expenses.
This lead to post-1984 bidding wars for the games with numerous cities vying for the honor of hosting (compared to 1972, when Denver became the one and only city to turn the offer down). The IOC then began basing its host selections on the principle of bigger must be better, and the more a country was willing to spend the grander the show would be for viewers. One of the many problems with the concept?
Cities and countries that can’t afford the games but want the spotlight and bragging rights of hosting them are forking over billions of dollars with often no thought-out plan in place for how to repay the debt after the games leave town. PyeongChang has already had to deal with a $7 billion budget that has nearly doubled to $12 billion – never a good sign for a region that wants to keep its venues in running order once the games are over.
Story by Jay Moon