Circus Maximus

Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup

Copyright Date: 2015
Pages: 174
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  • Book Info
    Circus Maximus
    Book Description:

    The numbers are staggering: China spent $40 billion to host the 2008 Summer Olympic Games in Beijing and Russia spent $50 billion for the 2014 Sochi Winter Games. Brazil's total expenditures are thought to have been as much as $20 billion for the World Cup this summer and Qatar, which will be the site of the 2022 World Cup, is estimating that it will spend $200 billion.

    How did we get here? And is it worth it? Those are among the questions noted sports economist Andrew Zimbalist answers inCircus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup. Both the Olympics and the World Cup are touted as major economic boons for the countries that host them, and the competition is fierce to win hosting rights. Developing countries especially see the events as a chance to stand in the world's spotlight.

    Circus Maximustraces the path of the Olympic Games and the World Cup from noble sporting events to exhibits of excess. It exposes the hollowness of the claims made by their private industry boosters and government supporters, all illustrated through a series of case studies ripping open the experiences of Barcelona, Sochi, Rio, and London. Zimbalist finds no net economic gains for the countries that have played host to the Olympics or the World Cup. While the wealthy may profit, those in the middle and lower income brackets do not, and Zimbalist predicts more outbursts of political anger like that seen in Brazil surrounding the 2014 World Cup.

    eISBN: 978-0-8157-2652-4
    Subjects: Business, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xvi)
  4. 1 What’s Wrong with the Olympics and the World Cup?
    (pp. 1-6)

    No city wanted to host the 1984 Olympic Games. Mexico City’s games in 1968 were marred by violence and political protest. Munich’s games in 1972 ended in wrenching tragedy as eleven Israeli athletes were killed by terrorists. Montreal’s games in 1976 cost 9.2 times more than initially budgeted and yielded a debt that took the city thirty years to pay down.

    There was no glory associated with hosting the Olympics back then, and the International Olympic Committee (IOC) was desperate to find a venue. With no competition, Los Angeles stepped forward and made a deal. The IOC would guarantee any...

  5. 2 Setting the Stage
    (pp. 7-32)

    The modern Olympic Games began in Athens in 1896. They bear little resemblance to the ancient Greek games of more than two millennia ago.

    The French aristocrat, intellectual, and writer Pierre de Frédy, baron de Coubertin, studied the program of physical education at the Rugby School in England. Coubertin believed that the incorporation of physical education into the British educational system promoted the balanced development of mind and body and was a major reason for the expansion of British power during the nineteenth century. France, in contrast, was still reeling from its humiliating defeat in the Franco- Prussian War, and...

  6. 3 The Short-Run Economic Impact
    (pp. 33-53)

    The claims are impressive. World Cup and Olympic Games organizers and their hired consultants would have us believe that hosting those events is one of the best tools of economic development since the steam engine. According to InterVISTAS Consulting, the 2010 Vancouver Games lifted output by $10.7 billion and created 244,000 jobs. The Dentsu Institute for Human Studies estimated that the part of the 2002 World Cup held in Japan raised that country’s output by $24.8 billion. A 2010 study by the consultancy Grant Thornton projected that the World Cup that year in South Africa would attract 483,000 overseas visitors...

  7. 4 The Long-Run Economic Impact
    (pp. 54-70)

    As the costs for hosting the Olympics and the World Cup have skyrocketed over the past thirty years, rising into the tens of billions of dollars, the potential short-run increase in economic activity of between $2 billion and $5 billion has paled in comparison. To justify the enormous expense of hosting the competitions, the IOC has introduced the term “legacy” to refer to the presumed long-run benefits. “Legacy” was introduced into IOC parlance after the 2000 Games in Sydney and has become a broad, encompassing concept, seemingly limited only by the imagination of the employees in the IOC’s PR office...

  8. 5 Barcelona and Sochi
    (pp. 71-88)

    Barcelona and Sochi stand at opposite ends of the spectrum in realizing gains from hosting the Olympics. The advance planning, the sources of funding, and the inherent potential based on cultural endowment and location dramatically separate the two cities’ experiences and provide an illustrative and cautionary tale for prospective mega-event hosts.

    Barcelona is the poster child of success for cities hosting the Olympic Games. Each new host city studies and seeks to emulate the experience of Barcelona in hosting the 1992 Summer Games. In many ways, the Barcelona case does indeed represent how to do it right, and there is...

  9. 6 Rio-Brazil and London
    (pp. 89-117)

    Brazil and London represent the two most recent experiences with hosting the World Cup and the Summer Olympics, and Rio, of course, will become the newest host of the Summer Games in 2016. The contrasts between the Rio-Brazil and London experiences are manifested along several dimensions: degree of economic development, planning model and goals, administrative style and efficiency, and the extent of buy-in from the local population.

    Two for one. Not a bad idea. Brazil hosted the 2014 World Cup and Rio de Janeiro will host the 2016 Summer Olympics. In theory, there should be some savings, or what economists...

  10. 7 Bread or Circuses?
    (pp. 118-136)

    The perennial claims that hosting the Olympics or the World Cup is an engine of economic development find little corroboration in independent studies. In the short run, the increasingly massive costs of hosting cannot come close to being matched by the modest revenues that are brought in by the games. The payoff, if there is one, must be realized in the long run. But even the legacy return is at best dubious. Much of the alleged legacy comes in the form of qualitative gains, and the rest comes over very long periods of time, difficult to trace back to the...

  11. Notes
    (pp. 137-164)
  12. Index
    (pp. 165-174)
  13. Back Matter
    (pp. 175-175)