(ATR) The IOC has a message for cities around the world: there are no costs associated with hosting the Olympics, only investments.
Samaranch at the IOC Session (ATR)
The IOC debuted a new video at the Olympism in Action Forum in Buenos Aires this month that is supposed to deliver that message.
Titled “Discover the Economics of the Olympic Games”, the four-minute online video analyzes the impact of Agenda 2020 reforms and the subsequent New Norm measures on the business model for the Games.
IOC vice president Juan Antonio Samaranch tells Around the Rings
the collapse of Olympic bids over doubts about costs has forced Olympic rulers to reshape their message.
“The conclusion was we will work as hard as we can to convey to the media and to the communities that may be interested [in bidding] that beyond the contribution of ideals, education for the youth, empowerment of a community, tourism, you can get all that, and there’s no financial risk to the taxpayer,” said Samaranch.
The new IOC video explains the differences between the two budgets associated with the cost of the Games. One budget -- Games operation -- is covered entirely by revenues generated from the Olympics. Broadcast rights, sponsorships and ticket sales are among those revenue streams.
The second, or capital budget, is for infrastructure needed for the Games. Stadiums, transport projects and other facilities fall under this budget.
Historically, IOC has kept a distance from this budget, reasoning that cities choose to pursue these projects independently. The video says these projects should not be counted in analyzing the costs of the Olympics.
A screenshot from the IOC's new video on the economics of the Games (IOC)
It’s this spending that anti-Olympics groups have seized upon.
Their complaints that governments tout low construction budgets, only to see them rise has resonated with voters.
In the last three bidding cycles, seven cities have voted against pursuing an Olympic project. Five years ago, Oslo, Norway voted in favor of bidding for the 2022 Winter Olympics, but withdrew a year later due to rising costs.
Increases in the capital budget routinely make headlines. Sochi's infrastructure pricetag, commonly cited at $51 billion, is a cautionary tale. Levels of the Japanese government are wrangling
with the organizing committee about what is the true spending under the 2020 Olympic umbrella.
Samaranch said results like that have forced the IOC “to change the conversation”. Instead of regarding this spending as costs, he said it should be considered as an investment.
“We have been accepting biased and incomplete and not informative conversation, which is the cost of the Games,” Samaranch said. “I’m not willing to talk anymore about the cost of the games. First, I’m a banker, there is revenue minus [OCOG] expenses and that’s the cost and that is generally turned a profit, then we go to the investment.”
Economic Debate in Buenos Aires
While the IOC is keen to shift the discussion away from the costs to one about the economic boost produced by the Olympics, the new IOC video “does not accurately represent reality”, says sports economist Andrew Zimbalist.
He tells ATR
that he believes the IOC video simply exhorts cities to follow this new way of looking at the costs of the Games.
Preuss, second from right, and Zimbalist, right, at the Olympism in Action Forum (IOC)
Zimbalist, a Smith College professor, was invited by the IOC to talk about his research at the Olympism in Action Forum held earlier this month.
“The OCOG budget often is fully covered by various revenues from the Games, but the challenge is always with the construction of new venues, temporary venues, venue renovation, Games overlay costs, the Olympic Villages, the media village, the IBC, transport infrastructure - sometimes useful for city, more often not and of low priority - hospitality and communications infrastructure, security, etcetera,” Zimbalist said.
“It is nonsense to claim that these costs are covered by taxes from increased economic activity. Independent scholarly studies simply do not support this claim, except in a few special cases,” he said.
Holger Preuss, professor of sport economics at the Johannes Gutenberg University, said at the Olympism in Action Forum that the IOC deserves credit for pressuring cities “to think about potential legacy and what they need and not need” before submitting an official bid. He says this change in focus could begin to better shape a city’s economic future around the Olympics.
“We see now the IOC is changing from a ‘sellers market’ to a ‘buyers market',” Preuss said. “In the beginning we were thinking of financial legacy, later everyone thinks it’s a physical legacy, but this is only one other small part. There are many other legacies. If the Olympics come they change things, the structure, the intangibles such as if you upscale people and have better networks. If [that] structure is changed in a positive way, you activate with the changes that are [positive] economic in the future.
“At the end we have indirect indicators that show us if there was a positive change. Still difficult is if it is because of the Olympics or not.”
Calgary Test Case
Samaranch said the IOC’s new messaging is not designed to “get involved in interfering in the local debate” of bid cities deciding whether to pursue the Olympics.
But Calgary, one of the three cities on the shortlist for the 2026 Games, will provide a clear, explicit test case for whether voters trust the idea of the reformed Olympic project. Milan and Stockholm are the other bidders.
Calgary hosting the 1988 Olympics will factor in voters' decisions in the plebiscite (Getty Images)
Calgary will hold a plebiscite on Nov. 13 on the Olympic bid. The process has been messy with public infighting on the city council and expansive discussions about government funding.
It also is the first time that the IOC’s new messaging has seeped into the public debate. Calgary 2026 bid chair Scott Hutcheson explains to ATR
how the bid has “really listened” to the discourse of the IOC when projecting the bid.
“We think the Games make sense,” Hutcheson said. “We’ve really listened to the IOC’s New Norms and Agenda 2020. And we think they will bring an economic impact to a community that really needs it.”
Stephen Carter, a political consultant from Calgary who is working on the YesCalgary2026 grassroots campaign, tells ATR
that the group has tried to explain the IOC’s reforms and messaging when persuading voters to back the bid. But, no matter what, the IOC’s international stature and lack of locality works against it in any public vote.
“The messaging doesn’t play because there are two components to every communication,” Carter said.
“One of them is what you say and the other is who’s saying it. You can’t simply say to [someone] ‘look I’ve changed,’ it doesn’t play. You have to show them that you’ve changed.”
Both sides trying to woo voters in Calgary have settled in their talking points and are just trying to get people to the polls. The “no” side repeatedly cites cost overruns in capital budgets as a reason to deny funding an Olympics, while the “yes” side touts IOC reforms as an opportunity for Calgary to receive public money that the city would never get if it weren't hosting the Games.
Carter said that the hard part of the campaign is convincing the majority of Calgarians who are largely disengaged from the process.
“There is no time more challenging when you’re trying to start a new leaf and be more trustworthy,” Carter said.
Squabbling at the city council level has set the bid back with no unity around the bid (City of Calgary)
Sooner Rather than Later
Bob Richardson was chief operating officer of Toronto’s unsuccessful 2008 Olympic bid, and helped lead the city’s successful 2015 Pan American Games bid. He told ATR
that the IOC’s new messaging is effective, but the next step for the organization “is being realistic” with that messaging.
He also questioned if the messaging is enough to help bid cities stave off anti-Olympics groups with a clear, defined message. The IOC should have a clear “framework for bid cities” that bids can adopt to have a clearly defined communications strategy from the start.
“You can’t be putting out video saying how things work and it's very straightforward, and then have your IOC vice president go on about how there’s no cost to the Olympics,” Richardson said.
He says a successful bid from the start must include commitments from political leaders that match the decisions made by the bid committee. Richardson worries that Calgary does not have that synergy, which is leading citizens to question the project’s viability.
“I think [the video] is designed to set the table and give people a sense on how things work, and then from that perspective I think it is reasonable,” Richardson said. “But [the IOC] need to do that sort of stuff earlier and more extensively.”
Written by Aaron Bauer in Buenos Aires
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