The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent


Why cities are increasingly reluctant to host the Olympics


The Olympic rings.
The Olympic rings.

Budapest, Hungary recently dropped its bid to host the 2024 Summer Olympics. CNN reports that this is part of an increasing trend of cities refusing to bid for the Games because of the economic damage they inflict:

Budapest has abandoned its bid for the 2024 Summer Olympics, a move that leaves Los Angeles and Paris as the only potential host cities….

There's one big reason support drained away: the high cost of hosting the Olympics….

Budget concerns have led city after city to abandon their Olympic dreams in recent years. Rome and Hamburg, Germany, previously bailed on 2024. Stockholm and Krakow, Poland, pulled the plug on bids for the 2022 Winter Olympics, which were later awarded to Beijing.

An Olympic host city has to plan, pay for and construct massive sporting venues and infrastructure projects. Security costs can run into the billions of dollars. Thousands of hotel rooms must be built for athletes and tourists.

Most of it happens on the taxpayer dime—with little discernible economic benefit. Researchers at Oxford's Saïd Business School estimate the cost overrun for the 2016 Summer Olympics in Rio de Janeiro was $1.6 billion.

Local governments and the general public in potential host cities are starting to realize what economists across the political spectrum have long known: public subsidies for sports events and stadiums routinely create far greater costs than benefits for communities. In addition, host governments for the Olympics and the World Cup often resort to such cruel tactics as forcibly displacing large numbers of people in order to make way for sports facilities. Many thousands were displaced for the 2008 Beijing Games and the 2016 Olympics in Rio de Janeiro, among others.

Afterwards, the facilities built for the games often turn into "white elephants" that provide little if any benefit or even lie empty and abandoned. Stadiums built for the 2014 World Cup in Brazil are now severely underutilized to the point where some are being used as parking lots or rented out for children's birthday parties.

In addition to their negative humanitarian and economic effects, large-scale international sports events are also often used as propaganda showcases by authoritarian host governments, such as China and Vladimir Putin's Russia. That just adds political insult to economic injury.

The Olympics and the World Cup do not have to be this way. We should be able to showcase the talents of great athletes without spending massive amounts of public money, forcibly displacing people from their homes and businesses, or providing a propaganda forum for dictators. Hopefully, the increasing reluctance of cities to host the games will stimulate the adoption of long-overdue reforms such as funding the Games with private money (as was done with the successful 1984 Olympics in Los Angeles), banning the use of eminent domain and other tactics that forcibly displace residents, and restricting hosting rights to liberal democracies.

I am not optimistic that the notoriously corrupt International Olympic Committee and FIFA (the governing body for the World Cup), will make any of these changes willingly. But perhaps growing opposition to sports boondoggles will eventually force them to do so.