Monday, October 05, 2009

Monday Potpourri: Olympic Edition 

  1. Rio was selected to host the 2016 Summer Olympic Games. Despite lobbying by President Obama, First Lady Obama, and mega-star Oprah, Chicago's bid was eliminated in the first round of voting. The aftermath of the decision has been quite interesting. President Obama's critics immediately seized this opportunity to criticize the president. The blame game started immediately in the USOC, and the fall out there may include a purge of executives. In my opinion, now would be a good time to re-examine the whole Olympic bid process. The IOC awards the Games in a way that extracts maximum rents from the host city and country. Chicago reportedly spend $50 million on their bid, and Tokyo and Madrid probably spent that much. The money for the Chicago bid came from donations, but that doesn't mean that there was no opportunity cost. Why do we continue to allow the IOC to operate this kind of rent extraction scheme? Here are two Canadian takes (link two) on the bid process.
  2. Meanwhile, down in Rio, the first estimate of the cost of new facilities for the 2016 games: $1.1 billion. I'm sure Brazil really needs a billion dollars worth of oversized new sports venues.
  3. Speaking of initial cost estimates, TSE co-blogger Stefan Szymanski points out that losing the Olympic bid may not be such a bad thing, based on recent events in London. Stefan does a great job of shooting down a number of myths about hosting the Olympic Games.
  4. Finally, in an interesting development, the IOC is going to set up a program to monitor betting on Olympic events to help detect any fixing. Good to see that the IOC recognizes the power of prediction markets.

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Sunday, February 10, 2008

Exciting News from the Sports Subsidy Crowd 

As a researcher working in the area of the economic impact of sport, I try my best to keep up with the "state of the art" in forecasting economic impact. Like many other fields, work in this exciting area moves forward at breakneck speed. It seems that every week brings fantastic new breakthroughs in sports subsidy technology. Consultants at the cutting edge of forecasting the expected economic impact of sporting events are continually "pushing the envelope" of economic impact estimates. In my professional opinion, it is only a matter of time before advances in multiplier technology and cutting edge assumptions about impact areas and daily tourist spending break through the legendary "billion dollar barrier" and usher in a new era in economic impact analysis.

The latest breakthrough comes to us from Washington state, where the 2015 US Open was recently awarded to a public golf course in Tacoma. According to this article, the local government "invested" $21 million in a new golf course, Chambers Bay, that opened a few months ago. This $21 million "investment" is a pittance compared to the estimated $100 million in economic impact that the community will receive from hosting the 2015 US Open golf tournament. Yes, that's correct, $100 million in economic impact from a week long event that will attract about 60,000 spectators. As astute County Executive John Ladenburg points out, that forecast makes those chumps in Seattle who only got a forecast of $50 million in economic impact for the 2001 MLB All Star game look like pikers.

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