- Current political and economic issues succinctly explained.
In May 1984, I published an op-ed in The New York Times entitled, “To Save Olympics.” It called for the depoliticization of the Olympics through an international treaty that would establish permanent locations for the games. During the intervening years nothing has changed to alter the political and economic risks of holding the Olympic Games in different cities, now every two years. This includes notably Beijing, which will host the Winter Olympics in 2022.
In his own recent op-ed in the Times, Senator Mitt Romney (R-UT) rightly argued for an economic and diplomatic boycott of the Beijing Olympics but not a government-imposed athlete boycott. China’s genocidal treatment of its Uyghur minority population, anti-democratic governance of Hong Kong, and aggressive threats against Taiwan are reasons enough to publicly delegitimize its hosting the Olympics and its reaping any profit or political hype from the Games. Still, at this late date the Olympic athletes of 2022 must be prioritized and allowed to compete, even if Beijing remains the host city.
Now is an opportune moment to consider more fundamental changes to the Olympics, so that we do not find ourselves in this kind of situation again.
I spelled out my view almost four decades ago, writing:
“[I]t is now clear that the Games must be depoliticized if they are to be preserved. Just as significant, the rights of qualified athletes to compete must be protected. An ‘International Olympics Treaty,’ negotiated under the auspices of the United Nations, could prevent world leaders from routinely sacrificing athletes’ rights on the altar of nationalism. Athletes who have devoted their lives to the goal of competing in the Olympic Games should have a guarantee that their achievement will not be snatched from them at the eleventh hour.”
In the modern history of the Olympic Games, which resumed in Athens in 1896, there have been at least 11 instances where the site of the Games has given rise to political boycotts, disruptive controversies, nationalist propaganda, or human tragedy. These cities include Berlin (1936), London (1948), Mexico City (1968), Munich (1972), Moscow (1980), Los Angeles (1984), Seoul (1988), Atlanta (1996), Beijing (2008), Sochi (2014), and soon Beijing again.
The economic burden imposed upon cities vying for the Olympics has increased astronomically in recent decades and burdened national economies. For example, the Greek government invested the equivalent of $11 billion at current exchange rates in the 2004 Summer Olympics, double its initial budget, and never offset the cost of the stadiums, which fell into disuse and sapped the national budget. That year, Greece’s national debt surged to 110.6 percent of gross domestic product, the highest in the European Union. As the country’s deficit ballooned, the European Commission subsequently imposed fiscal monitoring on Greece in 2005, an unprecedented step. Similarly, to host the Summer Olympics in 1976, Montreal overspent billions beyond its initial projected figure of $124 million. The spiraling cost overruns incurred during construction dumped upon the city’s taxpayers a debt of approximately $1.5 billion that took three decades to repay.
In 1988, South Korean officials forcibly relocated roughly 720,000 people and demolished 48,000 buildings to prepare the city for foreign visitors ahead of the Seoul Summer Olympics. Likewise, the Chinese Government bulldozed vast tracts of poor communities, displacing more than 1.5 million citizens in order to build Beijing’s 2008 Summer Olympics infrastructure. Accounting for the city’s large-scale investments, the cost of Beijing’s exhibition surged to an estimated $45 billion. A similar scenario unfolded in London, where the government bulldozed an entire low-income housing development in preparation for the 2012 Summer Olympics. In 2014, the Russian resort city of Sochi hosted the costliest Olympic Games in history, totaling an estimated $50 billion.
For years after hosting the Summer Olympics in 2016, Rio de Janeiro struggled with debt, colossal maintenance costs for empty facilities, and inadequate public services, with total costs reaching an estimated $13.1 billion. In 2017, the International Olympic Committee (IOC) refused to assist organizers to pay millions of dollars in outstanding debt. In the aftermath of the Games, the city struggled to find use for vacant sporting venues and to garner renters for the 3,600 units in the Athletes Village. In January 2020, a Brazilian judge ordered the closure of the Olympic Park due to safety concerns, describing the venue as “progressively battered by the lack of care” and “ready for tragedies.”
As the world’s best athletes prepare for the Tokyo Olympics, it promises to be one of the most expensive Summer Games in history. The expected hit on Japan’s national budget to build the requisite sites is $15.4 billion. The cost overrun had already exceeded 200 percent without accounting for the additional billions in expenses resulting from the COVID-19 delay. Though in its original proposal in 2013 to host the Games, Tokyo estimated it would spend roughly $7 billion, early estimates in 2019 projected the cost would surge to more than $26 billion. Further, given the appropriate decision not to permit spectators to witness the delayed Games of “2020,” Japan will incur further financial loss.
The intense competition among cities to burnish their image by hosting the Olympic Games is understandable but rarely makes economic sense. The process also is often marred by the tendency of the IOC to choose the city that submits the highest costing proposals, creating a “winner’s curse” for the country and its taxpayers. In the past, at least, it has also led on several occasions to serious allegations of impropriety or corruption involving, among others, members of the International Olympic Committee.
There is a better way.
The International Olympics Treaty that I have proposed could be negotiated to establish two permanent sites, one for the Summer Olympics and one for the Winter Olympics. Each of these locations would establish an “Olympic-free zone” where the designated national government agrees by treaty to govern such territory as permanently dedicated to an apolitical Olympic purpose and to comply with the operational requirements set forth in the treaty. In return, the budget of the Olympic Games every two years would be raised by the parties to the treaty and administered by a committee of auditors and financial experts set up by the agreement. This would include management of the commercial media coverage, sponsorships, endorsements, and spectator ticket sales that are major components of the revenue stream. The initial investments required to build modern facilities could be financed with bonds guaranteed by the major treaty parties (with high sovereign debt ratings) and repaid with revenue raised in connection with the Games. Those facilities need not be rebuilt elsewhere every two years and that alone would save billions of dollars in construction costs in perpetuity.
The nations that initially refuse to enter the treaty regime, as I earlier wrote, “could participate in the Games under restricted conditions, including the payment of surcharges. Enough incentives and penalties could be built into the treaty to induce all nations to sign and ratify it.”
The countries meriting serious scrutiny should not include any major global power or politically-stressed nation so as to avoid the vicissitudes of global politics and boycott fever. Candidates for the permanent Winter Olympics site might include Norway, Sweden, Finland, Austria, and Switzerland. For the Summer Olympics, Greece, the birthplace of the Olympic Games, might uniquely qualify as could Jamaica and Singapore. (This assumes that seasons defined by the Northern Hemisphere calendar are selected.) Any of these nations should be able and obligated to facilitate the sports-centric Games with no political or nationalist agenda. The designated city would benefit significantly from spectators flocking to the host country every four years, the employment arising with permanent facilities built and maintained for each Olympic Games, and their well-planned use during off-years.
To further avoid the enormous costs and political risks of the Games, a city that weather-wise can convene both the Summer and Winter Olympics in a politically “safe” country could be an attractive option with the bonus of Olympic events held every two years. While Canada, China, France, Germany, Italy, Japan, Russia, South Korea, and the United States have garnered both sets of Games and some of these nations are on deck through 2028, none of these mega-powers likely would pass the political litmus test for the permanent Olympic site. The year 2030, for which no city is yet selected for the Winter Olympics, might be a good target date for transition to permanent Olympic status for one or two suitable cities under a freshly drawn international treaty.
The practical difficulties of persuading countries to forfeit any future bid for an Olympic site, including those currently in the queue as bidders, cannot be underestimated. But the current illogical system is far too costly on political and economic grounds, invites corruption, and burdens average taxpayers of the host nation. Athletes should compete for the sake of sports excellence in an essentially neutral and financially-secure arena. They should know that every two years a city of ever-lasting commitment to the Games will host them for only one reason: to realize their individual Olympic spirit from which the whole world benefits.
The author thanks Madeline Babin of the Council on Foreign Relations for her research assistance.