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07-31-2012, 01:37 AM #18
Do the Olympics cost too much for host cities?
By Charles Riley @CNNMoney July 30, 2012: 11:43 AM ET
London has already exceeded its initial Olympics budget by a wide margin.
NEW YORK (CNNMoney) -- Hosting the Olympic Games is a lot like throwing the world's largest -- and most expensive -- party.
The costs are legion. Massive new infrastructure projects must be planned, funded and constructed. Security forces are mobilized, with costs ranging into the billions of dollars. Thousands of hotel rooms must be built to house athletes and tourists.
And most of it happens on the taxpayer dime.
Politicians have long justified the outsized expenses levied on cities and citizens by arguing that ticket sales, construction jobs and increased tourism outweigh the costs.
Elected officials often seek to bolster their argument by commissioning forward-looking economic studies that predict huge economic benefits for the host city and country.
But most independent economists say the real cost of the Olympics is more complicated to determine -- and certainly not as rosy as politicians portray.
"There is very little evidence to suggest hosting the Olympics provides much of an economic benefit," said Victor Matheson, a professor of economics at College of the Holy Cross.
The two most recent Summer Games had drastically different outcomes. The Olympics in Beijing in 2008 were widely considered a success, mainly because it helped the nation show the world how much it had emerged as an economic power.
"Beijing did it as an advertisement. They got tremendous value, because they didn't care about the cost. It was like buying a ton of television ads," said Mark Rosentraub, a professor of sports management at the University of Michigan.
But Athens in 2004 was a disaster. Experts say that Greece built too many hotel rooms and fell victim to the hopes that the Olympics would lead to longer-term gains thanks to tourism.
(Related: Olympians face financial hardship)
Matheson said that forecasts produced to justify the Olympics often underestimate potential spending overruns, and rely on models that don't accurately capture unintended costs.
"I would say these folks are really good at adding and multiplying, but not very good at subtracting," Matheson said.
Stefan Szymanski, another professor of sports management at the University of Michigan, said that politicians feel pressured to link the Olympics to economic gains because taxpayers bear the cost of putting on the games.
"The government wants to say that not only are we going to have a good time with this event, but it's also going to make us rich," Szymanski said. "And that's just not true."
Perhaps the best example of the long-term costs associated with putting on the Olympics is Montreal, host city of the 1976 Summer Games.
Prior to the games, the Canadian city's mayor, Jean Drapeau, followed the course of most elected leaders who court the games, saying that "the Olympics can no more lose money than a man can have a baby."
He was wrong. Mismanagement and gross cost overruns left the city's citizens with a $1.5 billion debt that took three decades to erase. The final payment on the debt was made in 2006.
By that time, the local citizenry had turned the name of the city's unused Olympic stadium-turned baseball park, the Big O, into a homonym: the Big O-W-E.
"It's a lot like having a party," he added. "It's a good time but it doesn't make you rich."
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07-31-2012, 01:47 AM #19
I recently saw some photos of venues of the Beijing games. Most are deserted and not cared about anymore. A lot of $ goes into building those venues too.
08-03-2012, 05:45 AM #20
Quality vs Quantity
Austerity At The Olympics: Each "Gold" Medal Contains 1.34% Gold
As every Olympic athlete knows, size matters. The London 2012 medals are the largest ever in terms of both weight and diameter - almost double the medals from Beijing. However, just as equally well-known is that quality beats quantity and that is where the current global austerity, coin-clipping, devaluation-fest begins.
The 2012 gold is 92.5 percent silver, 6.16 copper and... 1.34 percent gold, with IOC rules specifying that it must contain 550 grams of high-quality silver and a whopping 6 grams of gold. The resulting medallion is worth about $500.
For the silver medal, the gold is replaced with more copper, for a $260 bill of materials.
The bronze medal is 97 percent copper, 2.5 percent zinc and 0.5 percent tin. Valued at about $3, you might be able to trade one for a bag of chips in Olympic park if you skip the fish.
Size Matters...(via BBC)
08-03-2012, 01:01 PM #21
this gotta be the worst olympics in history. so many complaints but doesnt make it to western media cuz its hosted by a western country. if it were in china, u bet there will be sh*tloads of negative news coverage. traffic sucks, beds sucks, so many mistakes screwing athletes, and dont even have bathrooms in basketball court. so unprepared.
08-07-2012, 06:33 AM #22
ROUBINI: 'The London Olympics Are An Economic Failure As London Is Totally Empty'
ROUBINI: 'The London Olympics Are An Economic Failure As London Is Totally Empty'
Gus Lubin | Aug. 5, 2012, 7:41 AM | 20,644 | 44
Economist Nouriel Roubini is tweeting doom about the London Olympics this morning.
- UK policymakers scared so much folks before the Olympic that London is a deserted city: non-olympic tourists are away; londoners are gone!
- The Olympics are an economic failure as London is totally empty:hotels, restaurants, streets. They scared all off with crowd excess warnings
- By scaring every1 to stay out of London with warnings about too many people coming here it turns that London is totally empty, a zombie city
- RT @NotgiamattiThe Yogi Berra effect! Nobody goes there, it's too crowded.
- The West End - usually packed on any Saturday night - was an empty waste land last nite: barely a soul to be found in theaters, bars, etc
- They scared away all non-olympic tourists that pack london all summer;they pushed most londoners to escape;they told 2million to work @ home
- RT @_garrilla that's the 'olympic economy' - all dispacement & deadweight (oh, and hot air)
Retail chief Richard Dickenson told Ruddick: “We know there is a displacement effect. Instead of normal tourists you get sports tourists, we knew that. But we didn’t expect the impact on the London catchment and commuters."
London taxi drivers have reported a 20-to-40 percent drop in income this month, with industry representative Steve McNamara calling the Games "a complete and utter disaster."
Don't miss: 43 signs that the London Olympics will be a disaster
08-07-2012, 07:21 AM #23
I was told by a few people that a lot of the hotels in London have already dropped their hotel prices back to essentially pre-Olympics prices..Even a Hilton hotel in central London has offered 40 pounds for a night of stay..Also, a lot of Londoners have decided to go away from London to avoid all the busyness..
08-07-2012, 08:15 AM #24
As a Londoner (well ok Wimbledon) and working in a Hotel I would agree that Hotel trade is slow and not up to the pre Olympic hype. We did not put prices up for the Olympics and we were lucky enough to host the USA Cycling team so I guess its down to the sales team to grab what business they can. However I do not agree with the last statement, from my experience a huge amount of people living around the UK have come into London to see the sights and atmosphere that normally would not have bothered and I am not aware of any 'Londoners' that left to avoid it all - everyone I have spoke to has been proud to host this and would not dream of missing this opportunity.
As to the comment on Western media covering up, seriously! we have the worst tabloids in the world - trust me they love nothing more than to target someone or report the negatives and there was alot of sniping before the games. But once the games started everyone now just wants it to be good. As to the Traffic comment - Its one of the oldest cities in the world preserved as best as can be under the circumstances and not designed for cars or even a fraction of the current population so yes there is going to be queue's - its part of city life. I would rather live in an Historic city and Queue than some modern city where every block looks the same but hey, at least the there are wide roads....
Ok have finished now :-)
08-07-2012, 10:20 PM #25
When we started to explore the possibility of joining others to watch the Olympics in London a year or so ago, it seemed many things were stacked against us. High hotel rates, expensive tickets that cannot be bought easily for foreigners, transportation woes, etc. So we decided to stay home to watch the many events on TV.
I'm afraid too much negatives were publicized long before the Games to discourage foreign visitors.
08-08-2012, 05:20 AM #26
Thats a real shame Loh. I think the accomodation could have been sorted to budget as there are alot of options with places to stay at all levels.Transportation on the underground has been perfectly useable so far. However I agree the ticket system is too expensive and frankly the ticketing website is rubbish and at best frustrating even when you know exactly what you want. I was lucky enough to see the WS semi and MD Bronze match and the whole of one side of the Arena seemed to be for staff or corporate poeple and was pretty much empty - very upsetting knowing there were no tickets available to buy and I paid £95 each just for half a day. On the plus side I stayed at the Hilton where the players stayed right out side the arena for £68 and got to mingle with the stars which was a real bargain!
08-10-2012, 04:11 AM #27
For badminton event, from my experience going there on 5 days and abt 6-7 sessions and nearly every day just to see the crowd/happening on the outside:
- Transportation-wise, it was okay. First few days were a bit quiet. But there were some days where there would be people and spectators returning/going all at once to either/both Wembley Stadium and Arena..On a couple of occasions, we ended up in a sea of people trying to get on the Tubes, all at the same time, simply because there was a soccer match which also ended at the same time...
Going to/from Wembley area to/from the Olympic Park (Stratford) area was definitely a haul..
- Accommodation-wise, yes, if one can't find a bargain place to stay, one just has to deal with the overpriced hotel prices...
- Ticket-wise, i believe there were still badminton tickets available for sale up til the last few days but one has to go online and reserve the tickets (and it wasn't easy); eventhough there was a ticket box office (which was only used for people to pick up tix). I would say it was a bit easier to get than the ones in the 2008 Beijing OG which can only be bought thru touts or individuals ....But yes, the organizer could've done a better job in selling tickets @ the box office (how? that i don't know)...otherwise, yes, if one can't get them online, one has to deal with touts trying to sell tickets or thru other individuals..
- Re the (mostly empty) seating area nearby the press area, where the players, team officials, sponsors have been assigned & reserved, were pretty much full on the last day (Sunday). I guess the organizer/players decided to sell them on the last day..Overall, the arena was packed every single day starting from Day 1..
- Security-wise, it was quite tight but overall comfortable.
Last edited by ctjcad; 08-10-2012 at 04:18 AM.
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