Hosting the Olympics Is a Bad Deal


But some cities still want to do that, right?

The main answer is that construction industry executives decided this would be a great thing for their industry. They’re going to get billions of dollars in contracts. Sure, they could rank the unions and some investment bankers. They hire a consulting firm to do an economic impact study that uses a faulty methodology and makes some unrealistic assumptions. And they say, “By God, this will put our city on the map.”

So is this related to misalignments?

Let’s say Deloitte comes out hired by a chamber of commerce and says, “This is a crazy idea. Your city should never do this”, they will never do another economic impact study for a megastar sporting event. So this is their way of working.

What about the $4 billion that the IOC receives from publishers?

Individual members do nothing but be treated as hospitality. The IOC has an enormous and detailed working structure with all kinds of subcommittees and sub-organizations. Therefore, operating costs are very important. It’s probably somewhere around 15 percent of their total revenue over a four-year Olympic cycle.

Do you think broadcasting rights will gain or lose value in the future?

So, are we going to start betting on the Olympic Games? Definitely invalidating the Supreme Court’s decision Professional and Amateur Sports Protection Act It is an indication that sports betting will hit all sports leagues. This can be a major revenue generator for broadcast rights fees.

The next Olympic Games will be in Beijing this winter. How do you expect it to go?

I imagine there was a tremendous amount of political backlash to the IOC for choosing Beijing. Of course, they only had a choice between Beijing and Almaty, Kazakhstan. It was a Hobson’s choice.

Will Beijing make money?

They do really crazy, crazy things. They chose two venues 60 and 120 miles north of Beijing to host Nordic and Alpine ski events. Both of these areas are arid – not far from the Gobi Desert. They have to invest tens of billions of dollars in a water transfer system because they will have to use artificial snow. Neither of these will appear in the Olympic budget. It is extremely stupid to spend this much money to promote skiing even though it is not very popular in northern China. They admitted to spending $44 billion on the 2008 Summer Games.

How much are the Olympics about countries and cities that show political power?

It’s hard for me to imagine that President Xi thought this would put Beijing on the map. One of the things we learned in 2008 was that Beijing was horribly polluted, and we learned a lot more about repression in China due to the release of the Games.


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