Do the Summer Olympics Belong in Athens?
Many nations are lining up to become the next host of the Summer Olympic Games in hopes of benefiting from the nationalistic pride and economic benefits that come with the honor of hosting. However, these benefits fall short when compared to the enormous cost of staging this mega-event. For many years now this euphoric attitude has overshadowed sensible voices advocating that the Olympics should return to its roots in Greece permanently to avoid the madness of overspending on resources that yield only “feel-good” benefits to local citizens.
The perception has always been that hosting the Olympic Games advances the economic activity of the host country. After all, the requirement to build state-of-the-art stadiums, construct facilities that meet the needs of visitors and develop or improve upon existing infrastructure all contribute to the creation of new jobs, increased economic activity and a boom in tourism and travel. As the argument goes, hosting the Olympics will promote a nation’s future tourism as potential visitors will be drawn to Olympic venues after being exposed to them through the games; and after the games are over, the existing infrastructure will still be helpful to the country.
Rigorous studies provide lack of support for net economic benefits in hosting mega-events. Much of the spending is a local substitute from a different activity and not actually additional spending. Moreover, the projects associated with the games typically seem to be “white elephants” such as poorly used sporting facilities or hotels and other infrastructure built to accommodate a one-time peak demand for just a few weeks. For example, velodromes, aquatic centers, archery ranges and many other facilities are seldom used after the games, and the ones that are require hefty ongoing maintenance expenses.
The 2004 Summer Olympics in Athens cost Greece $13 billion. The 2012 Summer Olympics in London cost close to $15 billion. In 2008, China spent at least $100 million on the opening ceremonies alone. Let’s put this in perspective: About 100 million Chinese citizens live on less than $1 per day.
Returning the games to Greece is the right thing to do. From the economic point of view, it is sensible to host the game in a permanent site. Many of the facilities already exist, and additional infrastructure may add small incremental expenses every year. Up-keep and maintenance of fields, hotels and other infrastructure will be at a fraction of the investment cost needed for a different country to host the games every four years. To offset ongoing costs, the International Olympic Committee (IOC) could create a fund based on merchandise sales or fees paid by visitors. Eliminating the bidding process would also save valuable time and resources, as that process alone is an enormous and expensive undertaking. If the summer games return to Greece, these expenses, on aggregate, will become a huge savings to many nations.
Given its current economic crisis, Greece would welcome the opportunity to be the permanent host of the games. Returning the Olympics to Athens would provide a neutral place for the games, independent of regional conflicts and disputes that occasionally have generated tensions, boycotts and security nightmares. A worldwide organization like the IOC could manage it.
There is no question that the economics would work. The historical dimension is compelling as returning the Summer Olympics to its birthplace has sentimental appeal. If global leaders would adopt a more rational approach and end the competition among the few nations that can afford to bid for and subsequently stage the games, the Olympics can return to focusing on the true spirit of athletic completion.
George Tsetsekos, Ph.D., is a former dean of Drexel LeBow and the George B. Francis chair professor of finance. A native of Greece, Tsetsekos’ favorite Olympic Games to watch are swimming events and the 4 x 100 track relay.
