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Mega Event Legacy Update: Athens Edition

2010 June 19
by Brad Humphreys

I have been watching quite a bit of World Cup coverage, and the announcers seem to have gone out of their way to complement the new stadiums built for the event.  Yes, they look great.  But what will the legacy of the World Cup be?  We won’t know for many years, but looking back at some recent mega sporting events can provide some hints, even at this early date.

Case in point: the 2004 Athens Summer Games.  A recent Wall Street Journal article documents the sad economic legacy of those games.  Six years after the Athens games, most of the venues sit empty, providing nothing but urban blight.  While it is unlikely that debt from the Olympics caused the Greek debt crisis, they spent between $7 and $14 billion  compared to the current $370 billion in public debt outstanding, it certainly didn’t help the situation.  I guess it’s a commentary on Greek accounting that no more precise estimate of spending exists. Didn’t they keep the receipts?

One of the facilities highlighted, a complex of stadiums for field hockey, softball and baseball, cost $213 million to build and now stands vacant and padlocked behind a chain link fence.  The complex is unused because these are sports “with little or no following in Greece.”  Yeah, that was completely unpredictable when the complex was built.  The fact is, the Olympic “bidding” process compels host countries to build the largest, most lavish venues in order to win the rights to host the games.  The real cost of the Games comes from the debt issues to build these facilities.  Nobody want to talk about that when the bids are evaluated.

What about the ongoing costs of  operating the Olympic venues in Athens?  According to the article

Mr. Pyrgiotis, who heads the agency overseeing the use of the venues, figures the sites are losing about $12.3 million a year. Most of the vendors who have leased sites for other uses aren’t able to pay.

South Africa has annual GDP per capita of about 10,000, and 50% of the population lives below the poverty line.  I’m sure they will be easily able to pay the principal and interest on the $1.4 billion in debt issued to build and renovate stadiums for the Word Cup, and the ongoing operations and maintenance costs.  And so will Brazil, host of the 2014 World Cup and 2016 Summer Games.  Brazil is effectively starting from scratch in terms of Olympic venues.  I wonder how popular field hockey, baseball and softball are in Brazil?  Check back in 2022 for an update.

Hat tip to Tyler.

3 Responses
  1. Greg Pinelli permalink
    June 19, 2010

    I’m no fan of the huge costs associated with either the Olympics or the World Cup..but, there are differences between the two and the positive ones all come down on the side of the World Cup. Consider…

    First…in the case of So. Africa it is a dominant player on the world Rugby scene and those stadiums will find some use for both the strong domestic league and the Rugby Match Cup events of the future….

    Second..The World Cup doesn’t involve building much if anything in the way of housing or dorm facilities or expensive (eg..kayaking, diving) sites for one off poorly attended events.

    Third..the World Cup produces incredible revenues world wide. Millions who might watch 2 hrs of the Olympics will watch, literally, hundreds of hrs of Cup games….People at every Stadium site in So. Africa, according to what I’m reading, are spending a great deal of money eating, drinking and renting hotel rooms.

    What will happen in Brazil? Brazil is far better off than Greece..and the country is using it as a huge advertisement for itself as a world class vacation destination and an up and coming financial powerhouse.
    The biggest problem for Brazil will be controlling the unbelievable level of street crime in the major cities.
    It will certainly be interesting to see whether anyone sees the astounding poverty and slums that exist next to substantial wealth on television ….

  2. Dan permalink
    June 20, 2010

    I blame Peter Uberoth. After the tragedy of the 1972 Munich games and the costs of the 1976 games, people were getting wise to what a debacle hosting the Olympics could be. The voters of Colorado voted down hosting the Winter Olympics because of the cost. With the boycott of the Moscow games it was possible to see the modern Olympics going the way of the original Olympics. LA was the only city to submit a bid for the 1984 games and had they failed in a blizzard of taxpayer debt it could have driven a stake in the heart of the corrupt IOC.

    But then Uberoth made a profit on the games with private financing. And a profit of 250 million caught the attention of kleptocrats around the world that considered that 250 million rightly theirs.

    So after 1984 countries wanted to get in on the golden goose and niche sports saw the Olympics as a way to grow their sport resulting in exploding costs.

    Maybe in 15 or 20 years we will be back to where we were before 1984 where governments realize the Olympics are too expensive. Chicago and Illinois should be grateful they lost their bid because they were not following the Los Angeles model. And if events like the WC require countries to build new housing for the teams and expensive new facilities that will be shuttered after the games then they too will die a quiet death.

  3. Kevin Quinn permalink
    June 26, 2010

    Brad – it’s a bit off topic for this thread, but it occurred to me that the US-England game might one day be regarded as the tipping point for soccer in the U.S. that the 1958 Colt-Giant OT game was for the NFL.

    World Cup U.S. TV viewership is up – in fact, he combined viewership of USA-England beat the ratings of the first six games of the NBA finals, which averaged 16.4 million viewers, according to a Time magazine article: http://www.time.com/time/specials/packages/article/0,28804,1991933_1991952_1996968,00.html .

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