Matheson Podcast

Hosting the Olympics involves a bidding process where cities or countries submit their plans to organize the event. The bids are complex and expensive, considering the logistics of hosting thousands of participants, various disciplines, and media coverage. However, some cities are approached directly by the International Olympic Committee (IOC) instead of going through the bidding process. Reasons for hosting the Olympics vary. Some cities see it as a fun event or a big party for their people, while others believe they can do it better than previous hosts. Certain sectors, like construction and tourism, may benefit even if the overall economy doesn't. The long-term benefits of hosting the Olympics are not guaranteed, and costs can exceed budgets, leaving unused facilities. Developed cities may have lower costs due to existing infrastructure. For example, the United States didn't need to invest much when hosting the World Cup in 1994 because they already had suitable stadiums and infras My topic on the long run benefits of hosting the Olympics, this is for my international political economy class. We're doing podcast style interviews based off of our readings. For this one, I would like to talk about the bidding. Can you explain how a country or city qualifies to bid for the Olympics? Yeah, so historically there were no qualifications whatsoever, right? So the IOC puts out a call for bids and anyone who would like to bid submits a bid. Now the bid itself is wildly complicated because putting together the Olympics is wildly complicated and not every city that submitted a bid has a bid that was complete enough or reasonable enough bid to go on to the next round, right? But these were actually pretty complex and in many cases very expensive bids to put together about basically how do you organize an event that has 20,000 participants, 40 different events or 40 different disciplines and hundreds of events within each of those disciplines and how do you actually make that operate? How do you facilitate hundreds and hundreds of journalists and media and all these things? And basically your bid is here is how my city would organize this event, organize the games, organize the media, organize the fans and here's how we would do it and how we'd put it together and here are the facilities and the money and the infrastructure that we have to put this on. So anyone could do it. That actually changed for 2020 or 2032. So Brisbane is going to be the host in 2032. That was not put out to bid at all. That was the IOC approaching various cities to gauge their interest and then working one-on-one with individual cities rather than basically kind of this cattle call, you know, casting session for cities. And in some ways that's a good thing because you're not asking cities with no hope of getting in the Olympics to end up, you know, spending millions of dollars on a bid. My understanding is Chicago in their failed bid for I think it would have been the 2020 Olympics spent something like $70 million on their bid. So no reason to have that sort of spending take place if that's not going to happen. Yeah. For countries that do bid, like I know for – I talked to – I saw in your paper that you referred to – it was Andrew Zimbalist. Is that his name? Yeah. Andy Zimbalist. Yeah. He just retired from Smith College. Yes. I actually just interviewed him last week. Great. I'm glad you're saving the better-looking ones for later in your interview. His – I read one of his – or it was a chapter in a book about Rio. Rio is already a struggling city and they put in a bid and the long-term effect of it is that, you know, I think the hope was that it would help build up the city. And I mean, they did that while, you know, while the Olympics was there, but then the fallout afterwards. I just don't understand why some places do this knowing that almost always countries will exceed significantly their original budget, that some things don't be – aren't used afterwards. It kind of just goes to, you know, sit there, going to look nice or, you know, is used not very frequently. But why countries that have, you know, that already are struggling financially, economically, why would they place a bid or why would they want to host the Olympics? Yeah. Okay. So there's three possible answers to this. One is that not everything needs to be about economic development. One is that simply this could be a fun event for our people and that we want to throw a big party, right? So think about big firework shows in New York City, right? New York City doesn't make any money putting on big firework shows, but it's something that everyone thinks is fun and exciting, and therefore we're going to have this even though this isn't a moneymaker for us. It's an amenity for the people. Let's throw a big party, right? Okay. So there's number one. Obviously Rio throws Mardi Gras, right? New York City has Times Square and New Year's Eve and all these sort of things. Okay. So that's one. Number two could be that they say, yeah, I know this hasn't happened before, but this time will be different, right? It doesn't work for anyone else, but it might just work for us. So there's the number two is that, yeah, I know that no one else got this to work right, but it can work for us because we're going to be better at this. We're going to do this better. Number three could be that although it doesn't work for the city as a whole, it works for individuals within the city that have important political or economic power, right? So just because the Rio Olympics, for example, weren't a particularly good investment in general economic growth and general prosperity for the people of Rio, if you are in the business of heavy construction, for example, it was great for you. If you're in the tourism business, it was great for you. If you're in the hotel business, it was great for you, right? So there are certain sectors that stand to benefit a lot. So even if your overall economy doesn't benefit, there are certain special interests that do benefit a lot, and those special interests can have a lot of political power that pushes the conversation along. Here in Boston, we originally were the American entry for the 2024 Olympics. Folks like Andy Zimbalist and myself pushed back against that, along with other grassroots leaders. The No Boston 2024 movement gathered a lot of speed and ended up having Boston withdraw as the winner. The big person on the other side wanting to bring it here is this guy named John Fish, and he's the owner of the biggest heavy construction firm in Boston, right? And so even though, you know, in the opinions of folks like Andy and myself that this was not a good event, it certainly would have been a fantastic event if you're the owner of the biggest heavy construction industry in Boston. So again, just because it's not good for a city as a whole doesn't mean there's not individual people in the city who would stand to benefit in a huge way from a big event like this. Yeah. I mean, if it was, if there was an Olympics in Boston, I mean, me personally, I would think that's amazing just because it's, what, three, four hours from the city, and I would, you know, want to go. And at some point, this would be perfect for you. And it would have actually been pretty good for me as well and good for Andy as well. We're both, I'm about an hour outside of Boston, so I'm far enough away that I would have been outside of all the crowds and congestion. Depending on how the taxation works, hopefully this is a Boston taxation to pay for this. Yeah. And not a… And Boston is in Faginas Upper, I live in Massachusetts. Andy is about two hours from downtown Boston, so that's close enough for us to be able to get in to see fun events, but far enough away to be outside of the crowds and congestion. I'm sitting actually right now in my office that would have been about two miles away from the handball venue. I know nothing about team handball. I've watched about, you know, 90 seconds on YouTube or on, you know, Twitter and things like this of little pieces. But I would have gone to a ton of games, because why not? It's the Olympics, the Olympics do have this fun cachet and it's cool to see these events, and it would have been awesome having one in my backyard. That being said, if I'm being expected to be on the hook for potentially $10 billion of expenses, I would not have been in favor of that. But again, there are some pieces that would have been great. Again, if you're a New Yorker, the ability to drive up and drive back in a day and still be able to see whatever weird event you want to see, whether it's the high-profile ones like, you know, like Dream Team Men's Basketball or Women's Basketball, Women's Soccer, or the obscure ones like Rhythmic Gymnastics or Team Handball, they're still the Olympics and it's super fun. But again, perfect if you're in New York, you're definitely not on the hook for any money. You just have to go see the fun events. Yeah. Do you think that it's safe to say that positive long-run benefits are more common in already developed cities and countries, kind of like London and Beijing, rather than... So I don't think so, and I think the reason for that is the benefits that a London or a... The benefits that a London or potentially a Boston or an LA or a Paris, those are our next venues. The benefits of hosting them in those cities is not the potential long-run benefits from this, but the lower costs you get of hosting in those cities. So I would definitely say, and I suspect Professor Zimbalist would as well, that yes, you're much better off hosting this in a Los Angeles than in an Istanbul or in a Qatar for the World Cup or a Lagos, Nigeria, or places like that. So I think you're much better off hosting it in LA, but it's not because the long-run benefits are better in LA than they are in Istanbul. It's that the costs of hosting the event are much lower in Los Angeles than in Istanbul because all of the pieces are already in place. An example of this, and this is not Olympics related, but it's a good World Cup example. So that's obviously the other big world mega event, right? Soccer's World Cup. When we hosted that in the United States in 1994, we put in less than $25 million of infrastructure improvements to do that. Because we're in the United States, we already had all these huge NFL stadiums already in place. You can play soccer games in NFL stadiums. We have well-developed tourist infrastructure. Everything is there already in place. So we didn't need to spend any money on this. And it's going to be similar here in 2026 when we host the next World Cup along with Canada and Mexico. Again, we're spending nothing on new stadiums. Nothing on airports. Nothing on roads. Nothing on hotels. Nothing on any sort of infrastructure for this. And so therefore, we're getting all of the benefits of this huge mega event without any of the costs. Qatar just hosted this right in 2022, the small Middle Eastern country right next to Saudi Arabia and the United Arab Emirates. They spent a reported $300 billion hosting that event because they had nothing to do with it. Because they had nothing in place. When they were first awarded the event, they were going head-to-head with the United States in the bid. The United States put forth 78 stadiums that could be ready within three weeks to host a World Cup game. Qatar had two stadiums that were currently ready in their whole country, right? And so this required a massive amount of expenditure to host this event. They built all these hotel facilities, all these stadiums that are now just empty. A lot of hotel and tourist infrastructure that they will never have these sort of crowds and tourists again. And so, you know, the advantage of hosting the World Cup in the United States is not, again, this long-run legacy. It's just that the cost of hosting it is a fraction of the case. So I'd say that's the same with the Olympics as well. Why Paris? Why LA? Why Brisbane? Because these places have pretty well-developed tourist infrastructure already. It means you can host the event for a reasonable amount. Paris looks like they're going to come in at about $8 billion. Who knows whether that's right or not. But, you know, we'll hopefully get a final accounting later. Yeah. But Paris, and that's who's hosting this summer, obviously. $8 billion would be the cheapest summer Olympic Games that we've seen in about 25 years. So that's pretty impressive, right? Yeah. And again, that's because Paris is Paris, and they have a lot of the things already in place that, again, an Istanbul doesn't have, a Lagos doesn't have, a Saudi Arabia doesn't have. Yeah. I saw a couple months ago that Paris, they're cleaning out the reservoir there. Or what's the water that goes through? Because they wanted to hold some of the swimming events in the water. Well, so obviously they've tried to do some cleanup of the Seine, right? That's the big river there. And of course Rio did the same thing. And they were cleaning up a bunch of their waterways, and they have a big kind of inland lagoon. That's where they did all the crew racing. The problem is that Paris cleaning up the Seine is a lot easier than Brazil cleaning up its act, right? Yeah. So, you know, in Brazil at the time, when they were awarded the Games, you know, somewhere around, you know, 40 to 50 percent of all sewage being generated by the city was not being treated in any way before being dumped into local waterways. That's terrible. Yeah. And when Andy and I were there, and Andy and I were actually both there at the same time, and when we were there, they said their goal, which they didn't quite meet, but their goal was to have 20 percent, to have at least 85 percent of all water be treated before going into waterways. Which, on the one hand, sounds good. I see you nodding your head. On the other hand, that still means 15 percent of all sewage is dumped directly into waterways. So that's terrible. And of course that's not the case in Paris, right? So when we're talking about cleaning up the Seine, we're talking about, oh, let's do a little bit of extra work to an urban waterway that's in pretty good shape compared to what's going on in, again, Nigeria or in Brazil or in Turkey, right? So, you know, the sort of steps that a Paris needs to take to clean up some of its environmental mess is a tiny step compared to what most third world cities would have to do, again, to make those same sort of steps. Yeah. We have a couple more minutes. You mentioned that the problem, you said the problem posed by the extraordinary sports facilities cost can be solved through one or a few permanent locations for the Olympic Games. I mean, wouldn't that take away from the uniqueness of the Olympics, the fact that it travels throughout the world in different cities, different countries? Some people definitely say that this would take away a little bit of the romance of the Olympics and that you end up in places that you haven't heard about. Right. And mind you, that's important if you think one of the great things you take away from the Olympics is learning about the host cities and these iconic views from various host cities. On the other hand, if what you take away from the events is the actual sporting events themselves, the sporting events themselves can be done anywhere. Right. And, you know, I mean, think about this from like the Super Bowl standpoint. Right. You know, if you're a big football fan, you can remember some super important and cool and cool moments in the Super Bowl. Right. You can remember Seattle against the Patriots here about three or four years ago where, you know, Seattle throws an interception with a minute left in the game that seals the win for the Patriots. Right. Totally iconic. A little longer ago, you can remember a Giants player pinning the ball to his helmet in this spectacular win where the Giants disrupted the Patriots' perfect season up to that point. Again, iconic moments. But no one remembers what city those are in. Right. Because that's not what we think is important. Right. What's important is the actual sporting events. Therefore, the city is not important in that. And again, if we want to go to Olympics moments, we know about Michael Phelps setting these all-time records. Right. In the pool. We can think about the dream team finally coming together with Larry Bird and Michael Jordan and Magic Johnson all playing on the same court, which is unbelievable. But again, we don't really care where that happened. It happened in the Olympics and it was spectacular. We know about Jesse Owens. Now, that's one that actually the context is important because Jesse Owens wins four gold medals as a black man in Nazi Germany beating Hitler's Aryans in 1936. Occasionally, the context matters, but most of the time, it's literally the competition that's important, not the venue. And therefore, quite honestly, you can have that anywhere. And if it means having one city or just a couple cities that rotate, it means you can build these very specialized infrastructure. And of course, that's the problem with the Olympics in a way that's not really quite the same problem with the World Cup. The World Cup, at least you have something left over that people use. We use large rectangular stadiums for a lot of things. But we don't use velodromes, right? No one goes to the big velodrome events, right? No one goes to a swimming competition where you need seats for 15,000 people. That never happens. Even a gigantic stadium with a track in it, there are no large stadiums in the United States anymore that will hold a track because you don't want a track in between the fans and the football teams and the soccer teams. And so we don't have any big stadiums with tracks anymore. So you need all this specialized infrastructure. And so building that in a way that you can reuse it more than once is kind of the idea. Again, it takes away a little bit of the romance of this thing going from China to Rio to Athens to South Africa maybe to India at some point to Australia, all over the world. And that does take away, again, some of the romance. On the other hand, it's a lot to ask someone to an individual city like Tokyo to put out $25 billion just to get the romance going. Yeah. Do you think that there will be some repeat cities for the Olympics? I mean, sure, far off in the future. But they'll get to use these stadiums again, hopefully, maybe? I think they've become much more conscious about the cost of these events. And the reason they became conscious of this is for the last couple cycles you've seen so many cities drop out of the bidding because of worry about the money. You know, Boston dropped out in the summer Olympics where they gave to Paris. Boston dropped out. Rome dropped out. Madrid dropped out. Bucharest dropped out. All these cities dropped out for the last winter games that were finally held in Beijing. Again, Oslo dropped out. Stockholm dropped out. Munich dropped out. Lviv, Ukraine dropped out. So, again, when you have people say, look, we don't want to host these games. We love the Olympics. We just don't want to be on the hook for the big prize tag. The Olympics better figure out how it's going to be able to generate enough hosts. And, of course, they did something unprecedented now twice in a row for the summer games. When they went to award the games to Paris, they only had two bidders left by the end. And so rather than risk not having a bidder at all for 2028, they literally gave the Olympics to Los Angeles in 2028 without actually even formally opening bidding for 2028. So they said, you know, we've got two good bidders left for 2024. LA, how about you take 2028? Would that be OK? And they awarded twice. And then, of course, awarded to Brisbane without any formal bidding process at all. So, you know, I think they're very cognizant about the fact that you can have runaway costs here and try to ensure that the games are sustainable, not just environmentally and things like this, but economically sustainable. Yeah. OK. Well, thank you so much for talking with me. Of course. It's my pleasure. Good luck on the rest of this. And based on the good questions you've asked, your teacher should definitely be getting you an A. I hope so. I hope so. Good luck with your project. All right. Thank you so much. Bye. All right.