Why Back The Bid?

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CANCAN CHU / GETTY IMAGES WORKOUT: Chinese workers outside an Olympic venue, part of Beijing's massive spending for 2008

After the 2008 Games, will the world think of Beijing in the same sunny way that it now views Barcelona? As Seoul did in 1988, the Chinese government seems intent on using the Games to promote its image worldwide. And certainly the country could benefit from installing some state-of-the-art infrastructure. Beijing expects to spend about $37 billion on the 2008 Games, including $2 billion on venues. It's building a new international airport terminal with a soaring aerodynamic roof, a steel-framed Olympic stadium in the shape of an intricate bird's nest and a swimming center with five pools enclosed in blue bubble-like walls. In the circumstances of today's China, which wants to use the Games to convince the world of its modernization, profit is not the primary objective.

Yet though it may be fine for cities in the developing world to view the Games as a showcase, why should taxpayers in rich nations be expected to foot an Olympic-sized bill? It's not as if London, Paris or New York City desperately need to build up their tourist businesses. Yet they are respectively spending $55 million, $33 million and $50 million to woo the i.o.c. Following the 1984 experience, the i.o.c. has become quite skilled in playing potential host cities off one another. "After [Los Angeles'] profit, in 1985 there were six cities bidding for the 1992 Games," says Holger Preuss, author of The Economics of Staging the Olympics, and a professor of sports economics and sports management at Johannes Gutenberg University in Mainz, Germany. "It's a competition for the benefit of the Olympic movement, and there's a question of how long the cities can bear this high cost."

i.o.c. officials acknowledge some past host-city excesses but say recent changes in the bidding process should lessen that in the future. "We give a lot of upstream information to the candidate cities saying exactly what the standards and requirements are, and we always warn all the candidate cities against exaggeration," says i.o.c.president Rogge.

Of course, each of the 2012 candidate cities swears that it has learned the lessons of the past. And some of their approaches indicate that they have. "Zero white elephants," vows Philippe Baudillon, chief of the Paris 2012 project. "Every time a venue didn't have a sufficiently precise postevent business plan, we planned temporary infrastructure instead," he said. Organizers plan to erect seven "pavilions" that would host indoor events like basketball and table tennis, and that can accommodate crowds of up to 17,000. By the Eiffel Tower, 10,000 people could watch beach volleyball at another temporary installation. After the games, they'll all be gone.

London's pitch has emphasized the benefits that British sports and a run-down part of town will get from hosting the Olympics. But if pushed, London bid chairman (and two-time Olympic gold medalist) Sebastian Coe admits that the economics are far from certain: "Anyone who stands up and says hosting the Olympic games is risk-free is either very naïve or playing fast and loose. What I can say in London is we understand the risks."

New York City apparently didn't. Gotham's plan turned on a project to construct a stadium on Manhattan's West Side that would become the home of the New York Jets football team. In late May, a group of 106 economists from around the U.S. sent an open letter to New York City Mayor Michael Bloomberg and others noting that the stadium's astronomical projected cost — some $2 billion — was more than three times the price of any existing stadium in the National Football League. Moreover, they said, a combination of tax exemptions and other subsidies to build the stadium were "both unnecessary for economic development and very inappropriate." The plan collapsed in early June, when New York state legislators declined to support the stadium. Even Bloomberg admitted that this rejection "will seriously damage our chances at winning the 2012 Games."

Most observers agree but, if the ghost towns of Athens' Olympic sites are anything to judge by, New York City may end up having dodged an economic bullet. "I kind of think of it like a wedding," Victor Matheson, an economics professor at the College of the Holy Cross in Worcester, Massachusetts, says of hosting the Olympics. "It's not that it's not a great fun spectacle for everyone involved, it's just not a very good strategy for economic growth. The dollars simply are not there."

Like a newly engaged bride and groom, though, whichever city the i.o.c.chooses to host the 2012 Summer Games is bound to get all excited about the far-off Big Day. And like the couple contemplating marriage, it could also find itself facing responsibilities it never imagined and making a stream of compromises despite careful planning. Worse, when the party is all over, it could be landed with a mountain of debt — not to mention the Olympic equivalent of a bunch of extra toasters.

With reporting by Theunis Bates/London, Anne Berryman and Greg Fulton/Atlanta, Jeremy Caplan/New York, Anthee Carassava/Athens, Mikael G. Holter and Grant Rosenberg/Paris, Susan Jakes/Beijing, Donald Macintyre/Seoul, Jeffrey Ressner/Los Angeles, Jane Walker/Madrid and Daniel Williams/Sydney

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