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Chris Dempsey

Presentation to
Calgary Bid Exploration Committee

www.nobostonolympics.org 2/25/2017
Questions From CBEC for No Boston Olympics
● What are the various elements that we should consider to ensure a comprehensive
evaluation? Is there any specific framework or structure that you would encourage us
to review to help us through our work?

● Under what conditions would a bid be clearly against the public interest? Conversely,
what conditions would have to exist for a bid to be in the public interest?

● Agenda 2020 from the IOC appears to articulate some material changes to the bidding
process and requirements. During the Boston process Agenda 2020 had been
announced but remained largely unarticulated at that time. What are your thoughts on
what has been described in Agenda 2020 and discussed since? How material are
these changes from your perspective? How would you encourage us to interpret and
react to this guidance?

● What other advice would you give any city considering a bid?
2
Three Key Themes From Today’s Discussion

● Olympic bidding is an auction, not a race

● Agenda 2020 is marketing, not material reform

● If credible opposition solidifies, bidding committees
will be caught in the “Boosters’ Dilemma”

3
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

4
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

5
Background
● Boston native

● Graduate of Pomona College and Harvard Business School

● Former Assistant Secretary of Transportation for
Massachusetts

● Former Policy Director for Congressman Joe Kennedy III

● Former Bain & Co. Consultant

● Co-founded No Boston Olympics in 2013

● Boston Globe Magazine Bostonian of the Year in 2015

● Co-author of book “No Boston Olympics: How and Why
Smart Cities Are Passing on the Torch”
6
No Boston Olympics was a true citizen-led, grassroots
organization

● Hundreds of volunteers and thousands of supporters comprised of
residents from all walks of life, every neighborhood in Boston, and all
corners of Massachusetts
● Average contribution size of ~$100 vs. ~$75,000 average for Boston 2024
● NBO spent less than $10,000 vs. more than $15 million spent by Boston
2024
● 501c4 not-for-profit status; three volunteer Co-Chairs with backgrounds in
business, government, policy, politics, and advocacy

7
Calgary Credentials
● Visited Calgary twice in last three
years for both business and personal
travel -- I love your city!
● Business-school roommate is a
Calgary native
● Have hiked Sulphur Mountain
● Once met Calgary royalty Jim
Peplinski
● Enjoy Paul Brandt’s “Alberta Bound”

8
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

9
Key Boston 2024 Milestones
- Boston 2024 Bid Committee forms and begins planning
2013 - No Boston Olympics forms and begins advocacy
- “Feasibility Commission” created, commission releases report
2014 - Boston 2024 develops plans and advances in process as USOC
narrows field of bidders to Boston, LA, San Francisco, and DC

2015 - USOC chooses Boston 2024 as official United States bid
- Support for bid fall as public learns more about costs and risks
- Boston 2024 releases “Bid 2.0”, but support doesn’t improve
- USOC withdraws Boston 2024 bid
- Government-commissioned “Brattle Report” finds Boston 2024 likely
underestimated costs by $1+ billion 10
Boston 2024 Feasibility Commission
- Created by legislative resolution at state level
- Included members and advisors from consulting
and law firms, government, tourism agencies and
companies, construction industry, event and sports
management firms, and Olympic athletes
- Specifically asked to study “costs”, but demurred
and concluded that “any cost-benefit analysis or
specific recommendations as to budget are beyond
the scope of this Commission”
- No members from academia
- No trained economists
- No members that had track record of being publicly
skeptical of mega-events like the Olympics
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Boston 2024 Committee Members + Team

John Fish, Mitt Romney, Steve Pagliuca
12
Boston 2024’s leaders also included sports
and civic heroes

Ed Davis,
Boston 2024 Board Members included Boston sports heroes Meb
Former Boston Police
Keflezighi, David Ortiz, and Larry Bird
Commissioner
A captivating bid, but competing narratives
on costs and tradeoffs

14
A captivating bid, but competing narratives
on costs and tradeoffs

15
A captivating bid, but competing narratives
on costs and tradeoffs

16
A captivating bid, but competing narratives
on costs and tradeoffs

17
Boston 2024 estimated Games would cost
about $10b
OCOG: Non-OCOG: Public Infra: Security + Logistics:

$4.6 billion $4.0 billion $775 million > $1 billion

- Requires taxpayer - Requires taxpayer - 100% public funds - 100% public funds
guarantee for cost guarantee for
overruns or revenue completion to IOC’s
shortfall specifications

Estimated cost of $10.4 billion BEFORE any cost overruns

All values are in 2016 dollars; OCOG stands for “Organizing Committee of the Olympic Games”
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The economic benefits of hosting the
Olympics are illusory

“There is strikingly little evidence that such events increase tourism or draw
new investment. Spending lavishly on a short-lived event is, economically
speaking, a dubious long-term strategy. Stadiums, which cost a lot and produce
minimal economic benefits, are a particularly lousy line of business…

...Philip Porter, an economist at the University of South Florida who has studied the
impact of sporting events, told me that the evidence was unequivocal. ‘The bottom
line is, every time we’ve looked — dozens of scholars, dozens of times — we
find no real change in economic activity,’ he said.”

19
Source: https://www.nytimes.com/2014/08/10/magazine/does-hosting-the-olympics-actually-pay-off.html
The more voters learned about Boston
2024, the less they liked it
Western New England University WBUR
April, 2015 July, 2015

Information 100% 100%
% Support for Boston 2024 The sole group with
Level: 50%+ support for Boston Of the 70% of voters
2024 were voters with following Boston 2024
High very low information “closely” or “somewhat
about bid. closely” only 36%
Moderate support the bid.
Low 50% 50%
Very Low

0% 0%
% of Pop. in Category: 16% 34% 35% 15% 8% 22% 53% 17%

WBUR: Interviews of 821 registered MA voters, conducted by MassINC Polling, July 6-8, 2015: http://www.wbur.org/2015/07/10/wbur-july-olympics-poll
WNEU: Interviews of 427 registered MA voters, conducted by Western New England University, April 6-14, 2015: http://www1.wne.edu/assets/112/OlympicsPoll_Tables.pdf
Support for Boston 2024 declined, then
plateaued

● Support for Boston 2024 in
Greater Boston was at a high in
January 2015. Support declined
in February and March as more
information about the bid was
made public, and then plateaued
at around 40%

● Boston 2024’s release of a revised
“2.0” bid in July had no
discernible impact on support
levels in Greater Boston

Source: WBUR/MassINC Polling
21
Bid was pulled by the USOC in July, “Brattle
Report” released in August found $1B+ gap
● “Boston 2024, the group charged
with promoting and planning the
games, had been overly optimistic in
its cost estimate for construction
projects, the report’s authors
concluded, to the tune of an
estimated $970 million. That’s on top
of the $918 million Boston 2024
originally budgeted to build
facilities.”

● “Other costs, among them the
amounts budgeted for
contingencies, were low by industry
standards.” i.e., costs for
operations, security, etc. also likely
underestimated.
22
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

23
The IOC’s business model is largely
unchanged from its origins in 1894
● The IOC was founded in 1894 and held its first Games in Athens in
1896. Many stakeholders, including the Greek government,
advocated for Athens to be the permanent home of the Games.
But IOC founder Pierre de Coubertin was a Parisian aristocrat, and
insisted that the next Games be held in the city of his birth

● Since the IOC’s business model was established, modern society has
seen the invention of radio, television, Internet, and air travel. Where
once the only way to experience an Olympics was in-person, now
99.9% of people who experience the Games do so on a screen

● Despite these radical changes in technology, the IOC is clinging to an
expensive, inefficient, 19th-century business model that asks hosts
cities to bear the cost and risk of building expensive venues Pierre de Coubertin
24
Every two years, the IOC conducts an auction to
determine which bid best meets the IOC’s needs

The IOC has bidders “compete” for the The IOC asks taxpayers for a
Games. It awards them to the boosters financial guarantee. It takes none of
that best meet the needs and goals of the risk for Olympic cost overruns or
the IOC, not those of the host city revenue shortfalls
Example: Los Angeles 1984

- A series of disastrous Olympic Games in the 1960s and
1970s left few cities wanting to bid for the 1984
Summer Games:
- 1968: Mexico City political repression
- 1972: Munich terrorist attacks
- 1976: Montreal cost overruns

- Just two cities entered the bidding process for 1984:
- Los Angeles
- Tehran

- When Tehran dropped out, in the leadup to the Iranian
Revolution, Los Angeles was left as the only bidder

- Because it was the only bidder, LA flipped the typical
auction dynamic, and set the terms with the IOC
(including no taxpayer financial guarantee)
26
Example: The IOC profited from the Athens Games,
but left Greece with debt and empty venues
- The 2004 auction saw bids from Athens, Rome,
Stockholm, Cape Town, Buenos Aires, and others

- The IOC made $985 million in profit from the Athens
Games. IOC President Jacques Rogge called them
“dream games” and said at the closing ceremony, “I am
an extremely happy president of the IOC”

- Today, Olympic venues for tae kwon do, beach
volleyball, softball, swimming, and canoe and kayak are
all abandoned

- The Athens Games cost at least $11 billion, the most
expensive Games ever at that point

- Greek taxpayers were on the hook for €7 billion, a
significant contribution to the country’s current
crippling debt load
Source: http://www.bloomberg.com/bw/articles/2012-08-02/how-the-2004-olympics-triggered-greeces-decline
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The Boosters’ Dilemma

VOTERS + Calgary 2026
TAXPAYERS Committee

Calgary 2026 Must: Calgary 2026 Must:
● Promise the Games will be “frugal”, ● Promise a bid that meets the
won’t go over budget, and won’t expensive, exacting demands of the
require significant taxpayer funds IOC
● Promise the bid will be “transparent” ● Keep negotiations and conversations
and “open” with the IOC private and confidential
● Promise a “long-term legacy” ● Promise a great three-week event that
looks good on television
The Boosters’ Dilemma: Costs
● Oxford researchers conducted a longitudinal study of every Olympic Games
from 1960 to 2012, published 6/2012
● Key findings:
○ “The Games overrun with 100% consistency.”
○ “Overruns in the Games have historically been significantly larger than other
types of megaprojects.”
○ “The average cost overrun in real terms is 179% (2.8x) -- and 324% in
nominal terms.”
○ “For a city and nation to decide to host the Olympic Games is to take on one of
the most financially risky types of megaprojects that exists.”

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The Boosters’ Dilemma: Transparency

VOTERS + Organizing
TAXPAYERS Committee

“Less than a week after pledging a new commitment to transparency, the organizers of
Boston’s bid for the 2024 Summer Olympics are refusing to make public key documents
outlining the political and budget support needed to land the Games… ‘When information
was released in January, we were clear that proprietary data would be redacted for
competitive purposes and we stand by that decision,’ wrote Boston 2024 Chief Operating
Officer Erin Murphy in an email to the Business Journal.” - June 3, 2015
The Boosters’ Dilemma: Transparency

VOTERS + Organizing
TAXPAYERS Committee

“Additional risk includes the challenge to promote transparency of the project while
maintaining Calgary’s competitive advantage now and in the future. Based on this notion,
it is not recommended that the identified report attachments be shared in their entirety
with the public. Sharing this information could compromise Calgary’s competitive
advantage if it’s concluded that Calgary will proceed to the bid process.”

- January report to City Council
The Boosters’ Dilemma: Legacy

VOTERS + Organizing
TAXPAYERS Committee

"We said from the very beginning there would be no white
elephants on the Park - and we've kept our promise.”

"The total cost of converting the Olympic Stadium from an athletics
stadium into a multi-use venue has soared to £323m, taking the
overall cost of West Ham United’s new home to £752m – largely
borne by taxpayers. How did we get here?”
Exclusive VIP lanes reduce highway
capacity during the Games
● The IOC requires host
governments to block off lanes
on major roads and highways
throughout the city and region

● Access to these special lanes is
given exclusively to IOC
dignitaries and their families,
corporate sponsors, officials,
and athletes

● Drivers in London faced fines of
$175 for unauthorized use of VIP
lanes
33
IOC members demand luxury treatment
from host cities
● Calgary will be responsible for IOC ● IOC members include:
member costs such as: ○ Princess Nora of Lichtenstein
○ $900 per diem ○ Sovereign Prince Albert of Monaco
○ Personal attendant/assistant ○ Sheikh Ahmad Al-Fahad Al-Sabah of
○ 5-star hotel Kuwait
○ Chauffeured transportation ○ The Grand Duke of Luxembourg
○ Private airport access and ○ Sheikh Tamim Bin Hamad Al-Thani of
ceremonial welcome on the airport Qatar
runway ○ Crown Prince Frederik of Denmark
○ “IOC members shall be greeted ○ Baron Pierre-Olivier Beckers-Vieujant
with a smile when arriving at their of Belgium
hotel.” Prince Tunku Imran of Malaysia
Prince Feisal Al Hussein of Jordan

34
The IOC + Calgary 2026 will ask taxpayers
to sign a blank check for cost overruns
The IOC requests that a candidate city provide a guarantee covering any shortfall
in the OCOG budget. Calgary 2026 will be asking City of Calgary taxpayers to sign
a “blank check” for their proposal.

35
The IOC knows bid books are fiction, but they
don’t really care as long as the hosts are paying

"Bid books are the
greatest piece of
fiction ever written."

- Dick Pound

36
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

37
Agenda 2020
Only seven of the forty recommendations are
actually relevant to host cities

40 7
Relevant recommendations are: #1, #2, #3, #4, #9, #12, #13
High-level description of the seven relevant
recommendations
#1: Encourages use of existing and temporary facilities, allow events to be held
outside of city/region/country
#2: Essentially repeats language from recommendation #1
#3: Relates strictly to bidding process, not actual hosting costs (savings of >$200k)
#4: Promotes sustainability (but language has been part of IOC charter since 90s)
#9: Provides goals for number of athletes and coaches, and number of events
#12: “Reduce the cost and reinforce the flexibility of Olympic Games management”
#13: Elevate role of the International Federations (IFs) in the planning and delivery
of the Olympic competitions
Digging deeper on the seven relevant
recommendations from Agenda 2020

Recommendation #4-3 states that to
promote sustainability, the IOC will:
“ensure post-Games monitoring of the
Games legacy with the support of the
NOC and external organisations such
as the World Union of Olympic Cites
[sic] (UMVO).”
- Which of these entities actually
have an incentive to expose
venues that are not sustainable?
Digging deeper on the seven relevant
recommendations from Agenda 2020

Recommendation #13 elevates the
role of the International Federations
in event planning.

“The IOC to enhance the role of the
International Federations (IFs) in the
planning and delivery of the Olympic
competitions, including the study of
transferring technical responsibilities
from the OCOGs to the IFs.”

- This recommendation could
increase costs, rather than
decrease them.
Digging deeper on the seven relevant
recommendations from Agenda 2020

Recommendations #1 and #2:
● The IOC’s 2002 reforms had the same language as Agenda 2020
about temporary or existing facilities, but did not produce less
costly bids: “In 2002, the IOC’s own Olympic Games Study
Commission, chaired by Canadian member Dick Pound, said the
same thing...What followed were the two most expensive
Olympics ever, with Beijing spending more than $40 billion on the
2008 Summer Games and Sochi topping that.”
(Boston Globe, 2/8/2015)
If the USOC truly believed that the IOC valued
Agenda 2020, they would have chosen LA 2024
Material reform would have changed
incentives, not just restated promises

45
Agenda
I. Introduction

II. Mini-History of Boston 2024

III. IOC Bidding Process + Hosting Requirements

IV. Agenda 2020

V. Risks to Calgary and the Calgary 2026 Committee

46
Boosters are (usually) well-intentioned
But…
- They become too deferential to the IOC + NOC
- They answer easy questions, but defer on difficult ones
- They overestimate their abilities and think “we’re different,
we’ll get it right, we can pull this off” (overconfidence bias)
- They fall victim to groupthink
- They get gold fever
47
Boosters promise they won’t fall victim
to fate of previous hosts
London Olympic Bid Promises London Olympic Games Outcomes
The bid submitted by London boosters to “We have identified spending of around
Spending the International Olympic Committee £11bn.”
estimated spending at £4.2 billion. -The Guardian, 7/2012

“I would say about 80 percent, 90 percent [was
“Not a penny of the budget will be drawn
publicly funded]. The lion's share came from
Public $$$ from the public purse.”
the taxpayer, there's no question.”
- Lord Sebastian Coe, 11/2004
- London Mayor Boris Johnson, 2/2015

“Of the 9,000 homes that will be built, our “Of the 2,818 new apartments that were created,
Housing
target is to have 50% as affordable.” 1,379 (less than half) were [affordable].”
- London Development Agency, 7/2004 - Washington Post, 3/2015

48
Just like London, Boston 2024’s organizers
developed unrealistically low estimates

Percentage
Bid Estimate Actual Cost Overrun June 2015 Bid Documents

Olympic $176 million for a “temporary”
$423 million $1.1 billion 162%
Stadium stadium at Widett Circle

Aquatics $70 million for a “temporary” venue
$113 million $404 million 256%
Center at a still undetermined location

$64 million for a “temporary” venue
Velodrome $30 million $158 million 427%
at a still undetermined location

London 2012 spent more than $1.6b on venues that Boston 2024 estimates will cost only $310m.
For simplicity, figures in British pounds converted to dollars at 1 GBP to 1.5 USD.
Actual exchange rate in construction period was more than 1.6 USD to 1 GBP. 49
Insurance will not cover taxpayers from
major areas of risk
Inadequate Budget Projections: Changes in Real-Estate Market: Voluntary Changes in Scope:

London 2012’s stadium, The unexpected economic London’s commitment to “no white
velodrome, and aquatics center all downturn meant taxpayers in elephants” caused dramatic
cost more than twice bid London + Vancouver had to step changes in scope as business
projections. in to pay for the Olympic Village. plans changed, costing taxpayers.

Source: https://www.bostonglobe.com/metro/2015/07/01/insurance-plan-would-cover-myriad-scenarios/PFPoPfR8jVis2VhrQsuBEP/story.html
To mask inevitable mistakes, boosters
play the Olympic budget shell game

51
Costs shifted to other budgets to maintain
“surplus” in “Olympic” budget
Non-OCOG Public Security +
“Olympic” Budget:
Permanent Venues: Infrastructure: Logistics:

“This venue
was going to be
temporary, but
now we think it “The public is
should be going to use
permanent.” this after the
Olympics, so “We’ve been
it’s OK to use advised this is a
public funds for legitimate
it.” security expense,
so that budget
should pay for it”
52
Public entities end up funding “Olympic”
costs, not just “infrastructure” costs
When London 2012 faced overruns,
the government shifted funds from
away from arts organizations to
make up the Olympic deficit.

"I’m deeply disappointed. The impact
is likely to be felt across the whole
of England and disproportionately
by smaller arts organisations, local
projects and individual artists.”
- CEO, Arts Council England

53
Olympic developers propose tax breaks or
other incentives
Boston 2024 Tax Break Per Square Foot
● Boston 2024’s proposed tax
breaks per square-foot of
development were many times the
value the City of Boston had
approved in other instances

● Because the City still needed to
provide services (fire, police,
schools) to this new development,
allowing such massive tax breaks
hurts other taxpayers, who must pay
more than their fair share

54
Boston 2024’s proposed Columbia Road
improvements cost less than tax breaks
● Boston 2024’s proposed improvements to
Columbia Road estimated at $12m, are funded
by a developer, not by Olympic/IOC dollars

● The proposed tax break for the Columbia Point
project is $13.4 million each and every year --
meaning the contribution to Columbia Road
improvements is less than even one year of
proposed tax breaks

● This project could be an important and worthy
contribution to Boston’s greenspace, but it does
not need Boston 2024 to move forward
When things go wrong, boosters fall back on
the financial guarantee
● Boston 2024 pitched the
Village as privately-
financed, but boosters were “The troubled Vancouver Olympic
“The deal still leaves UK taxpayers Village project went into
still asking for (1) large tax
exposed...as private investors receivership Wednesday when the
breaks, and (2) a taxpayer backed out of the construction city took control of the project in an
guarantee for the project during the recession.” effort to recoup $740 million in
completion of the Village taxpayer funds.”
to the IOC’s standards on
the IOC’s timeline
● In London and Vancouver,
boosters pledged no public “London's Olympic Village has “The City of Vancouver has signed
funding would be required, been sold to the Qatari ruling the paperwork to conclude one of
family's property company in a deal the sorriest episodes in its history
but in both instances
that leaves UK taxpayers £275m …the bottom line: Taxpayers are
taxpayers had to step in as
out of pocket.” out north of $100 million.”
the market changed
56
Even a city with 100% of the venues and
facilities in place faces costs + limited upside:
● No evidence of increased long-term economic development

● Some hosts have faced negative short-term economic impacts

● No long-term impact of increased participation in athletics

● Distraction from more important priorities

57
Olympics have enormous opportunity costs

58
What a bid would mean for the city or
provincial governments
● Explicit or implicit approval of IOC-requested taxpayer
guarantee for cost overruns and/or revenue shortfalls

● Olympics as city-wide or province-wide agenda-setter
from now through 2026, regardless of other important
priorities

● Responsibility without control
59
Tactically, bidding committees
commonly make these mistakes
● Using bottoms up analysis but not reference class forecasting

● Not appropriately accounting for contingency in bottoms-up analysis
(should be at least 20%+ of estimate, and perhaps much more)

● Flawed or incomplete assessment of public support
○ From Calgary survey: “The International Olympic Committee looks closely
at what legacy a Games can provide to a host city when making its
decisions.”

● Underestimation and downplaying of political opposition
60
The bid submitted to the USOC in December
included the following inaccuracies:
● It misrepresented "planned investments" for major public-transit projects in the
Greater Boston area

● It overstated commitments from local universities for use of facilities and
fundraising assistance

● It exaggerated conclusions about potential public support by using an optimistic
polling methodology

● It overstated support from key political leaders, including Speaker of the House
Robert DeLeo and Senate President Stan Rosenberg

● It underestimated the strength and effectiveness of opposition groups
61
The bid submitted to the USOC in December
included the following inaccuracies:
● It misrepresented "planned investments" for major public-transit projects in the
Greater Boston area

● "Bid commitments
It overstated books are from
the local universities for use of facilities and
greatest
fundraising assistancepiece of


fiction ever written."
It exaggerated conclusions about potential public support by using an optimistic
polling methodology
- Dick Pound
● It overstated support from key political leaders, including Speaker of the House
Robert DeLeo and Senate President Stan Rosenberg

● It underestimated the strength and effectiveness of opposition groups
62
Boosters did not fare well in the Boston
media or court of public opinion

“Top 10 Losers”:

#4. John Fish,
Boston 2024 Chairman

#7. Rich Davey,
Boston 2024 CEO

#8. Northwind Strategies,
Boston 2024’s
Communication Firm

63
Three Key Themes From Today’s Discussion

● Olympic bidding is an auction, not a race

● Agenda 2020 is marketing, not material reform

● If credible opposition solidifies, bidding committees
will be caught in the “Boosters’ Dilemma”

64
No Boston Olympics Book
“No Boston Olympics: How and Why
Smart Cities Are Passing on the Torch”

By Chris Dempsey +
Professor Andrew Zimbalist

Spring 2017

Available on Amazon.com:
http://a.co/3Ytk7Sv
65
Contact Information

Email: christopher.dempsey@gmail.com

Twitter: @cdempc, @NoBosOlympics

66
Appendix

67
Boston 2024 talked about insurance for 2+
years, but still has offered few details
National insurance experts have criticized Chicago 2016’s proposed insurance
boosters’ claims of “removing financial risk”: policy was woefully inadequate:
“Insurers do not cover risks that are certain to materialize,
and almost every Olympics in the recent past has had major
cost overruns. Any suggestion that private insurance will “In many key areas, no insurer stands
pick that up is smoke and mirrors.” between taxpayers and the risk of
revenue shortfalls or cost overruns…
- Professor Patricia McCoy, Boston College Law School
‘It's a leap of faith,’ acknowledged
Chicago Alderman Joe Moore.”
“There’s no wraparound, no Band-Aid that says, ‘OK. You
blow the budget by $1 billion and the insurance steps in and - Crain’s Business Journal
funds that.’ It doesn’t exist.”

- Senior Executive at a National Insurance Firm

Source: Boston Globe, “Insurance for Olympics won’t cover every risk,” 7/1/2015; Crain’s, “Peeling back the coverage,” 9/19/2009 68
Boston 2024’s proposed insurance would
not have covered Tokyo’s current situation

Tokyo’s estimate for its Olympic
stadium ballooned from $1.05
Inadequate Budget Projections: billion to $2.03 billion -- before
even breaking ground on stadium
construction

The Prime Minister of Japan has
scrapped the design, saying they
Voluntary Changes in Scope: will “start over from the beginning”.
Meanwhile the recently-cleared
site sits empty
Significant costs not in public consciousness,
like IOC-required Broadcast/Media Center
- December 2014 bid documents proposed $500 million in new
construction costs for roughly 1m sq. feet of space
- Roughly equivalent in size to Fed Reserve Building
- Equivalent to twice the square footage of proposed BCEC
expansion put on hold by Governor Baker

- June 2015 bid documents allocate just $51m for “temporary”
construction, possibly including lease of existing or new space
- “We feel like there’s a solution that hasn’t presented itself,”
Boston 2024 leadership has said

- London’s Olympic boosters promised the Broadcast/Media
Center would be privately financed and cost only $215m
- In the end, it was funded 100% publicly and cost $440m, plus
an additional $150m to convert, for a total cost of ~$590m
Note: Boston’s Federal Reserve Building has 1,078,903 sq feet of floor space.
70
There is no evidence that IBC/MPC space
requirements are declining over time
Host City Square Meters

Atlanta 1996 74,000

Sydney 2000 105,000

Athens 2004 100,000

Beijing 2008 202,000

London 2012 84,000

Rio 2016 112,000

Tokyo 2020 100,000 London 2012’s International Broadcast
Center/Media + Press Center (IBC/MPC)
IOC 2024 Stated Requirements 96,154 was the smallest since 1996, and still
cost $590 million
Note: 93,000 square meters = 1,000,000 square feet. Boston’s Federal Reserve Building has 1,078,903 sq feet of floor space.
71
The IOC requires strict control of
advertising and marketing in host cities
● Boston 2024 and the City of Boston will be
required to provide a written guarantee to the
IOC confirming that legislation will be passed
to control advertising on the MBTA, at Logan
and other airports, in airspace, and in areas near
Boston 2024 venues

● Advertising control begins 2-4 weeks prior to
beginning of the Games

● Boston 2024 is not required to reimburse the
MBTA or Massport for control of these
advertising properties
Source: http://www.olympic.org/Documents/Host_city_elections/FINAL_2022_Candidature_Procedure_and_Questionnaire-FINAL.pdf
Three reasons why Boston 2024 will not help
our Commonwealth’s long-term economy
1. The International Olympic Committee’s auction process leads to bad outcomes for hosts
- The IOC selection process is an auction that awards the Games to a city that best meets the
IOC’s needs, not what will produce the best outcome for the host city
- Los Angeles was the only city to bid for the 1984 Games, so it set the terms, not the IOC
- The “Winner’s Curse” - only worse, because boosters are bidding with other people’s money

2. Short-term thinking overtakes long-term decisionmaking
- The Olympics will focus attention on a three-week event, not the long-term needs of our city,
region, and state
- IOC-imposed deadlines are a double-edged sword: we might “get things done,” but we might also
pay much more than we should, or use costly shortcuts that hurt us in the long-run

3. The facilities we have to build for Boston 2024 do not increase long-term economic productivity
- The IOC requires we build a velodrome, an aquatics center, a 60k-person stadium, etc., but it
has no requirements for transportation or infrastructure upgrades
- Boston 2024 does not require significant investment in what makes MA great: human capital
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Most US Games have required significant
support from taxpayers
Salt Lake City 2002: Lake Placid 1980:
- Used at least $1.3 - Cost more than 3x initial
billion in federal and budget
state taxpayer subsidies
- Required a bailout from
- Organizers were the State of New York to
indicted for bribery stave off bankruptcy

Atlanta 1996:
Los Angeles 1984: - Received 9x more in
- Only bidder for 1984 federal subsidies for
Games, eliminating IOC’s operations and venues
“auction” dynamic than what it reported in
“operating profit”
- Did not provide
taxpayer guarantee
Source:http://www.gao.gov/archive/2000/gg00183.pdf