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Counting the financial cost of staging the Olympic Games

Posted in Historical articles, History, Sport on Tuesday, 31 July 2012

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This edited article about the Olympic Games originally appeared in Look and Learn issue number 757 published on 17th July 1976.

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The Magic of the Olympics by Ron Embleton

When the Olympic flame fades and finally dies at the Closing Ceremony of the XXIst Olympiad in Montreal’s huge new stadium on August 1, marking the end of the world’s biggest sports occasion, Canada will be left with memories – and a bill for about £650 million.

Of this, only about £200 million will have already been accounted for, and the Canadian taxpayer will be paying for the rest until well into the 1980s.

They are not the first people to discover that the golden dream of an Olympics has turned into a nightmare of expense. Their neighbours, the United States, had a shattering experience of this in the previous decade.

The VIIIth Winter Olympic Games (the Winter Games began in 1924 – 28 years after the summer event started) were held in Squaw Valley, California. Twelve years later, people living in the state were still paying for them.

Staging the modern Olympics has nearly always resulted in financial loss for the organisers. The first, held in Athens in 1896, would not have been held had not a rich Greek businessman personally paid for the building of the main stadium. All he got in return was a statue erected to his memory on the site – he was too ill even to attend the Games himself.

At that first Olympics there were 285 competitors from 13 nations taking part in 10 sports. At Montreal, there will be over 9,000 competitors and officials from probably nearly 100 countries and 21 sports spread over as many venues.

At the last Olympics in Munich in 1972, the original budget was exceeded by over 100 per cent and the final cost was about £300 million. The original estimate for the Montreal Games was only £150 million.

Why are there such huge discrepancies? One of the reasons lies in the way the Games are awarded by the International Olympic Committee – the controlling body.

The IOC is a self-perpetuating group of 70-80 men of notable ancestry (including several Europeans of royal status), independent means or notable amateur sporting background who meet at least once a year to conduct and control Olympic business.

There are no rules for election to the IOC. The present president is Lord Killanin of Ireland. He is not a wealthy man and his sporting interests before election to the IOC were mainly rugby and horse-racing, neither of which are Olympic sports. His predecessor, the late Avery Brundage, of the United States, was an orphan who became a self-made millionaire and finished fifth in the Olympic pentathlon of 1912.

The longest serving member of the IOC is Britain’s Lord Exeter, who owns a stately home and big estates in Lincolnshire. He won a gold medal in the 400 metres hurdles in the 1928 Olympics. Five years later he joined the IOC and although he has been a candidate for the presidency, his fellow-members have never elected him to that high office.

All decisions of the IOC are taken in secret, and that includes the selection of the Olympic sites. These selections are held every four years, six years before the Games are due to take place.

The Games are awarded to a city, not a country. It is the man who is mayor at the time of its application who has to appear before the IOC, together with his advisers, to present his city’s bid, answer questions on its suitability, and give financial and other guarantees.

Because inflation can play havoc with estimates in the six-year gap between dream and reality, and because mayors are often subject to political elections and can be replaced in the meantime, work on building the sites is often delayed until the last moment.

For a year, Montreal has been racing against time to get its main stadium completed – and it will fall far short of the magnificent project presented in model form to the IOC in 1970.

But that is nothing new. Less than a year before the Munich Olympics opened, that site was entirely open with no signs of the great glass roofs which eventually covered many of the stadia.

The trouble over the Squaw Valley site was originally caused by the fact that the IOC awarded California the Games on the strength of a vast working model presented to it, whereas at the time Squaw Valley was entirely undeveloped.

Before World War II, there were sometimes as many as 10 or more cities competing for a Games. Today’s costs have reduced that number often to no more than two or three. Even so, the secrecy and unpredictability of the IOC vote can often take candidates by surprise.

After a week of canvassing at Amsterdam in 1970, the Montreal delegation was so sure they would lose to either Moscow (later awarded the 1980 Games) or Los Angeles that most didn’t even bother to attend the ceremony announcing the result of the vote.

There were cries of delight and surprise when the news was brought to them as they were packing up their exhibition ready to return home. Those cries have turned to moans of bitter recrimination among their fellow Canadians as the escalating bill has been presented to them in the intervening six years.

But the Montreal opponents of the Olympics have not been as successful as were those in Denver, Colorado, who were awarded the 1976 Winter Olympics at the same IOC meeting in Amsterdam. They forced the city government to abandon its grandiose plans and in a move unusual in Olympic history, Detroit gave up the Games which were then awarded to Innsbruck.

Most of what has been completed in Montreal is magnificent but the main stadium, where the popular athletics and major ceremonies will be held, will be only a shadow of what was envisaged six years ago. And only after the ‘party’ will the Canadians realise the true cost of paying for it.

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