Is The Olympics A Bankrupt Concept?

Every major sports event is different, but there are many similarities. I'm going to compare the football World Cup to the Olympics as I explore this concept. Both are world events, with the focus of the world on one country for a month or so but both have very different financial back stories.

In all of these events, they have governing bodies who are wined and dined by delegates from the bidding parties to decide who wins the opportunity to host the events. In all of these events, the delegates promise the earth, putting a great deal of focus on the "legacy" of their winning bid. The legacy is the emotional promise of what happens after the event has played it's final event, the medals handed out and the whole circus has left town.

They all make grandiose claims about how it will kick start a new era of athletes in those sports, using the newly funded facilities as training and competition arenas, ensuring that a new golden generation will be competing at the highest levels for years to come. There's only one problem; it's all bullshit.

The vast majority of world sporting events don't change the course of any countries future in any sports. There are the odd exceptions, but those are not triggered by hosting an event, they are triggered by someone with a clue being appointed to a position where they can make a difference and actually create a legacy where their predecesssors were too blinkered to try.

The legacy effect is used to justify the huge expense of building stadia for the event. You'd never justify spending £100+m on a few stadia if you knew they'd only be used for a month, then left empty. It's sold as an investment in the future.

With the football World Cup, the major footballing countries could host it without major investment in facilities. In England they have several top flight Premier League quality stadia, from Anfield, St James, Old Trafford, City Of Manchester, Villa Park, The Emirates, Stamford Bridge, White Heart Lane, Wembley and many more. These are stadia that pay for themselves every week of the year through football games, live gigs and other events. There may be upgrades or improvements required to bring some parts of that infrastructure up to a newer standard, modernize parts etc, or the areas surrounding them for transport, accommodation requirements.

The point is that England is a mature footballing country with a top flight league that pays for itself, so the facilities are pretty much in place. You can apply that same thinking to many other countries like Spain, Italy, France, Germany, Argentina, Brazil etc. The downside of that limitation is that it would only award the World Cup to an insular group of nations, locking everyone else out.

Plenty of nations have a football crazy population but little to no money to invest in that infrastructure. Awarding the World Cup to those nations has real legacy potential. Underneath all the bribery and corruption FIFA at least have a product and the power to do that. The Olympics on the other hand is always a cost to the tax payers of the country that's unfortunate enough to be chosen to host it.

Unlike the football World Cup, most of the Olympic hosting venues are built for the event at great expense to the tax payer. Any large venue needs a long term business plan to break even, which means hosting regular events that bring in big crowds who are willing to pay a decent price for their tickets.

The Olympics events themselves are niche at best for small meets and competitions. The allure of the big ticket prices and queues around the block are for the Olympics itself, as much as the events that make it up. Plenty of people will pay for a day of track and field at a venue that has the world best athletes in those events being watched by sports media from all over the world live.

Take that whole circus away and have the same venue used as a national or regional meet for a couple of events, where most of the competitors are strangers, the ticket price evaporates, so do the long queues waiting for them. The usual sports media building up events then focuses around one or two star names who "may" compete if they're fit. With the rules, those star names may find themselves disqualified for false starts. Then what do you have to justify the ticket price? The stars of the future? That's a much harder sell.

Large multi billion pound venues can't break even if they sit empty for days or weeks at a time, nor can they book events that have limited earning capacity. The organizers of those events can't afford the rental fees for the venues knowing they will never make that back in ticket sales.

In both cases the bids are subsidized by the tax payers of the hopeful countries, to try to buy votes. In both cases the "winning" country subsidizes the event itself. The profits from sponsorship, fees etc all go back to enrich the governing body and the winning country have their month in the world spotlight.

The difference is that with football there's a reasonable chance that you can see a net gain from a country hosting the World Cup, both as a genuine legacy that could nurture a new future if handled right afterward, and in the economy getting a bit of a boost in trade from an influx of visitors. The Olympics is such that there is nothing to build on for the winning country, so they have to build from scratch. There is no residual interest in the sports that it encompasses, that are profitable and popular enough to sustain the promise of legacy.

That's not to say there are few fans, or few fans who are willing to pay to see their sport. There's a vast difference in the crowd pulling potential of a Champions League football fixture, and a Conference football fixture. Could Crawley Town move into Wembley as their home ground with a regular attendance that barely reaches four figures? My guess is that the rental of the stadium for one game may bankrupt the club.

This is what the Olympic "legacy" PR amounts to. The impression that a new dawn will break, and that people all over the country will be inspired to take up the various sports to emulate their newly found heroes who have committed acts of athletic prowess on their home turf. The impression that the people who have paid to watch history take place in their home countries, will be enthused and continue to follow those sports as the seasons progress, travel to other countries to watch other events etc.

The reality is that a major sporting event does have that effect, specially on the kids, but it only lasts while the tournament is on. I've been caught up in the Wimbledon fever once when I was a kid. I remember tennis being on all day on BBC1 and BBC2 on bright summer days, and myself and my cousins playing tennis out in the street. We couldn't play of course but we had a laugh, with ancient racquets that probably came from our parents school sports kits. That lasts until the final weekend, maybe a day or two after, then it dies out. Life returns to normal.

For some people that fad turns into an introduction to something they never thought they could be good at, or enjoy but potentially are both. This is the exception, not the rule. We were the rule. Is this a valid investment of tax payers money? To catch a few hundred kids spread over the country who may or may not carry on past a month or two?

Increasingly it seems like a body that requires regular huge jolts of tax payers cash to give the impression of something alive just long enough to fool people into paying for it, so the governing body can continue to exist and fund a lavish lifestyle for it's board members. It seems like the concept of Olympic sports has fallen out of favour as an entity that can stand on it's own without subsidy, that any promise of legacy is impossible to achieve, no matter how successful the event itself is.

Given the shape of the world economy, and the demands on tax payers money, isn't it time we asked the question "Is the concept of the Olympics bankrupt?"