The Olympic Games Money Pit

Back in 2009, the media was quick to criticize Obama’s failed pitch for Chicago’s 2016 Olympics bid. However his failure has turned out to be a lucky break.

Back in 2009 the media was fast to lash out against Barack Obama’s failed pitch for Chicago’s 2016 Summer Olympics bid. However Obama’s failure might have been a lucky break.

The Olympics today are a ready-made spin machine.  They’re expensive, but staging the games enables regimes to put a positive spin on other problems, such as say a questionable human rights record. China in 2008 is clearly the best and most recent example of this phenomenon.

Up and coming Brazil will get an opportunity in 2016 to show off to the world. Furthermore, Russia will be able to blind its western counterparts with winter madness from Sochi in 2014. There seems to be an unspoken rule amongst BRIC states that Olympics, world football championships and other big sporting events are the best PR out there; a good way to unite many people while simultaneously keeping politics out of the equation.

But ignoring the political element, the finances also raise many questions.  It seems as if the character of the Olympic Games has changed over the past decade. Today a simple refurbishment of existing stadiums and sport venues is not enough. Cash has to be splashed and even the most low-profile sports must be housed in Philippe Starck-like arenas.

All this has made the Olympics as sustainable as a Hummer H2. Greece’s 2004 Olympic bonanza ended up costing the Greek state a whopping $8.6bn, driving the national debt up to 5.3% in 2004. In addition it managed to kick-start the Greek debt spiral, which culminated last year.

China’s expenditures on its 2008 games amounting to $40.9bn alone in the Beijing area. Current projects are no different: Sochi’s 2014 winter Olympics expenditures are already rising out of control, with some reports suggesting final costs in the double-digit billion area.

London’s 2014 games are no stranger to this cost frenzy. Apart from astronomical expenditures on security precautions, the London 2012 Summer Olympics are set to have detrimental effects on society at large. London housing prices are expected to hike by nearly 40% in the wake of increased building construction.

In light of spiralling costs, security expenditures, failed sustainability and minimal payback, Americans should be happy that Chicago will not host the 2016 Olympics.

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