Cities Stand In Line To Host Games Dozens Worldwide Make Their Bids Despite The Fact Costs Outweigh Profits
When a city decides it wants to be an Olympic host, its bid goes way beyond the bottom line.
Even though the Atlanta Games this summer are expected to leave the slimmest of surpluses on the books, at least four other U.S. cities - Boston, Chicago, Seattle and Houston - are considering bids for 2008 and beyond. Dozens more are lined up worldwide.
“The Olympics can be a shot in the arm for a city,” said USOC executive director Dick Schultz. “I think you’ll see cities standing in line to bid.”
Why?
U.S. Olympic leaders, gathered here this weekend for their semiannual board of directors meeting, think it’s a combination of prestige and knowing that, somehow, the bills will be paid, even if there’s not much cash left over.
For decades, cities knew that hosting the games probably would be an exercise in red ink.
Construction of new stadiums and arenas, upgrades to the infrastructure and the high price of assembling a small army of workers for a short-term endeavor added up to a package that would cost any organizing committee and its local governments hundreds of millions of dollars. And there was little hope of covering those costs entirely without government subsidies.
It got so bad in 1976 that Canadian taxpayers were left with a billion-dollar debt from the Montreal Games. Seeing those bills rising higher than the Rocky Mountains, voters in Denver backed out of hosting the Winter Olympics that year, with the International Olympic Committee hurriedly switching the games to Innsbruck, Austria.
But all of that changed in 1984. The Los Angeles Olympics, awarded to the California city when no one else mounted a serious bid, were the first funded entirely by private enterprise, as Peter Ueberroth and his organizing committee tapped American industry for sponsorships and relied on existing facilities to keep costs down.
“Los Angeles was in a perfect situation, since no one else wanted to host the games,” said Anita De Frantz, a leader of the Los Angeles Olympic Organizing Committee and now an IOC member. “So we presented a Games that was just the Games.”
The result: A record $235 million surplus. And suddenly, the Olympics seemed more attractive to prospective bidders.
“Los Angeles was a model,” Schultz said. “The organization was excellent and they really made their dollars stretch. The advent of sponsorship brought the Olympics to a whole new level.”
Since the flame died in L.A. 12 years ago, none of the five Olympic hosts have reported such profits - or profits at all. Atlanta, which originally predicted a $100 million surplus, now shows a projected margin of just $13 million, less than 1 percent of a $1.6 billion budget.
“L.A. might have been an aberration,” Schultz said. “It’s going to be very difficult for any city to turn a profit anymore. The high demands and the security aspects make it very difficult on any city.”
“Now, expectations are higher,” De Frantz said.
Yet cities around the world are lining up as prospective hosts. Sydney, Australia, was picked from eight bidders to hold the 2000 Summer Games. Salt Lake City will host the 2002 Winter Olympics after beating a similarly large field. The bidding for the 2004 Summer Games is a 10-city race.
Schultz, De Frantz and Dave Maggard, sports director of the Atlanta Committee for the Olympic Games, all noted that the IOC was more concerned now than in ‘84 about leaving new sports facilities to produce future generations of athletes. Atlanta, for instance, is spending $450 million on new sports venues.
“We are leaving a half-billion dollars in facilities to the state of Georgia,” Maggard said.
“Now, those facilities are the profit,” De Frantz said. “That’s what the IOC wants to see a city is better off because of the Olympic Games.”
And there’s more money to spend to make it better. USOC president LeRoy T. Walker noted that NBC’s staggering $3.6 billion payment for U.S. TV rights for all the games from 2000 through 2008 provided a “level of comfort” on which bidding cities can base their budgets. The U.S. TV rights fees traditionally make up the single biggest chunk of an organizing committee’s income.
“NBC’s contract pretty much establishes what that budget will look like,” Walker said.
xxxx FUTURE OLYMPICS SITES 1998 Winter Games…Nagano, Japan 2000 Summer Games…Sydney, Australia 2002 Winter Games…Salt Lake City 2004 Summer Games…10-city race