Fynsa
In our previous issues, we analyzed the pros and cons of organizing major sporting events and concluded that, in the short, medium and long term, it is not economically convenient to be the host city or country. However, we continue to see how applications to host mega sporting events pile up when applications are opened. Why does this happen?
First, just because the organizer "as a whole" loses, does not mean that "everyone" loses. In the net calculation, it is forgotten that there are winners and losers. In general, candidacies are promoted by unions or groups that believe that they will benefit from the organization, at the expense of other voices or sectors that are less organized or have less economic or political weight.
Secondly, the objective of getting the Games may have nothing to do with financial gain, but rather with a show of power. The Sochi Winter Olympics cost US$51 billion, while the Beijing Games cost US$45 billion. This clearly disproportionate expenditure is unlikely to be opposed by the political opposition or taxpayers, at the risk probably end up in a prison in Siberia. Countries with more stable democracies have tended to lower their candidacies when the expenses presented exceed what voters find reasonable.
Finally, beyond what the numbers say on average, everyone wants to be the exception. The examples of Los Angeles 84 and Barcelona 92 give hope to the bidders that they will be able to do it differently, even if in the attempt to win the venue they end up raising the stakes and finally transform an initially reasonable project into an unfeasible one. This escalation of costs has caught the attention of the International Olympic Committee (IOC), which has worked on a series of proposals to prevent a handful of large cities from rich countries or countries with authoritarian regimes from monopolizing all the organizations. The proposals range from one city always hosting the games (as was originally the case in Athens), to having the venues win two consecutive events, to avoid an investment that will only be used for three weeks. There could even be a rotating group of organizers, based on a series of criteria not only economic, but also of sustainability, sports development, inclusion, etc.
Well, so ends this series of five columns dedicated to understanding the economics behind major sporting events, especially the Olympic Games. Although the track record is not good, I believe that the Paris Games are an interesting opportunity to assess whether the various measures to make these events more the Paris Games are an interesting opportunity to evaluate whether the various measures to make these events more sustainable are having an effect. These not only involve less direct expenses from the State, but also a more relevant participation of the private world, even being part of the decision making and the organizing committees (and not only as sponsors). Personally, after our Pan American Games, I look forward to those three weeks at the end of July and the beginning of August, to enjoy the sport simply for the pleasure of doing it.
