Owe-lympic Myths: Olympics Are a Good Investment for Host City

Today's Owe-lympic Myth:

Myth 1: The Olympics are a good investment for Toronto

Economists that have looked at the Games see no long-term economic benefit.  In a recent NYTimes story, Philip Porter, an economist at the University of South Florida who has studied the impact of sporting events was quoted saying: “The bottom line is, every time we’ve looked — dozens of scholars, dozens of times — we find no real change in economic activity.”

Another specialist in sports economics, Andrew Zimbalist, in his recent book, Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup concludes that there are "no net economic gains." The wealthy, aka Millionaire Hucksters, profit; the rest of us pay. (In fact, Zimbalist wrote in The Wall Street Journal that Boston would be "lucky" to lose the Games. May Toronto be so lucky.)

Zimbalist cites the London 2012 Games.

They spent over $18 billion (all figures in USD). They took in $5 billion in Olympic revenues, leaving a deficit of $13 billion.

In a preliminary analysis of the just-ended Toronto Pan Am Games (in so far as it's possible without final numbers yet), The Globe and Mail pointed out that while there were winners among local businesses, there were losers as well.

It was a wash.

John Barber, in his column "The case against an Olympic bid," discusses cases, then cites yet another sports economist.

“Public opinion is catching up with the economic evidence,” Stefan Szymanski, professor of sports management and economics at the University of Michigan, noted recently with respect to Boston's abandoned bid.

Yes, the public does seem to be twigging to it: Taxpayers pay. Elites profit.

There is no argument about this.

Seriously. Try to find a reputable economist who will argue against it.



*Third in an ongoing and irregular series.

Previous posts:

Owe-lympics Myths: Reuse Pan Am Venues.

Owe-lympics Myth 5: Health and Fitness Legacy.

Toronto Star and Olympics: Something Stinks

Toronto Councillors' Twitter Accounts

10 People on Twitter

Owe-lympic Myths: Health and Fitness Legacy

There are many myths about Olympics among the millionaire hucksters' talking points. On the NoTO2024 website, the Top Ten are listed.

I'm going to take a few of these on, not necessarily in order.

Myth 8: The Olympics will make us healthier
Studies have shown that hosting the Olympics has no measurable impact on fitness and sports participation levels following the Games. There is, however, evidence that funding gets pulled from other regions in the country, causing cutbacks to sports funding that hurt participation.

The claim that Olympics would bolster a healthier, more active population figured large for the London Olympics (with, note, state-funded healthcare like Canada). But a comparison of activity levels pre- and post-Olympics concluded: "no Olympic legacy yet apparent."

I know. You're shocked that two weeks lying around on their couches watching professional-turned-amateur-probably-doped-up athletes doing odd things didn't turn the UK into a nation of svelte, kale-gnawing overachievers.

Furthermore, from London again -- where, unlike Beijing, the media closely monitored claims and outcomes -- money meant for "good causes" was pulled from other areas of the country.

In the UK, they have Camelot, similar to Ontario's Trillium Fund, that distributes lottery dough to good causes. For the Olympics £425 million was diverted to the Olympics.

Jeremy Hunt, the Conservative shadow culture spokesman, said the diversion of lottery money to the Olympics and the public bodies administrative spending meant that 1.1 billion Lottery tickets will be sold this year before the good causes receive a penny.

That's a lot of lottery tickets.

Where does that dough go? The Good Causes award categories are arts, education, environment, health, heritage, sport and voluntary.

Here's sports.

From building new sports venues, to inspiring future generations to participate in sport, lottery funding is helping to grow grassroots sport across the UK with new facilities and coaching that are helping communities to stay healthy, fit and active.

So, the London Games literally sucked money out of grassroots sport for elite sport.

But the London Games were so profitable they paid it all back, right?

Nope.

Three years on from the end of London 2012 and £425 million in raided lottery cash owed to charities and communities across the UK has not been repaid, and the new Government has gone silent on the issue.

Now, this bit should sound familiar to students of Canadian sports history.

However government ministers have continued to drag their feet on the issue – repeatedly suggesting that repayment may take until 2030 or beyond. Despite repeated requests the new Conservative Government has refused to make a statement on this issue. The Directory of Social Change (DSC) has led the Big Lottery Refund campaign, supported by over 3800 charities, which aims for an immediate return of the lottery cash.

Well, heck, that would be only 18 years to repay Olympic debt. We've come a long way from Montreal, eh? They took 30 years to pay off $1.5B even with new taxes.