Parry, J. and Zimbalist, A. 2020.

Should There Be Permanent Sites for the Summer and

Winter Olympics? Wall Street Journal, 28.10.2020. Accessed 28.10.2020 at:
https://www.wsj.com/articles/should-there-be-permanent-sites-for-the-summer-and-winter-
olympics-11603901605

Oct. 28, 2020 12:13 pm ET

Should There Be Permanent Sites for the Summer and Winter

Olympics?
Yes, the Games are too costly to keep moving around. No, the problem is the size of the
Olympics. The two sides square off in a debate.

Hosts of the Olympics frequently experience large cost overruns and political controversy, as Rio
De Janeiro did in 2016 with the Summer Games that year.
PHOTO: PAWEL KOPCZYNSKI/REUTERS
It isn’t easy to host an Olympics, and over the years it has only gotten harder.

With more events and more athletes (witness the addition of skateboarding, sport
climbing and surfing for the Games in Tokyo next year), the burden on host cities has
become ever more onerous. More venues and facilities for all those events. More
housing for all those athletes. More transportation to move both athletes and
spectators around. Much more money to pay for all that. And more controversy about
the impact on the lives of host cities’ residents—particularly those who are displaced
to make room for the Games.

One solution that has been suggested is to hold the Games at a permanent site or sites
—most likely one site for Summer Games and another for Winter Games. Proponents
argue that permanent sites would be more efficient and spare cities around the world a
host of troubles. But others say that would be too big a deviation from the Olympics’
global mission. A better option, some say, would be to shrink the Games back to a
manageable size.

Andrew Zimbalist, the Robert A. Woods Professor of Economics at Smith College,

argues that the Olympics should have one permanent summer and one permanent
winter location. Jim Parry, a professor of philosophy of sport at Charles University in
Prague, says the Olympics should keep moving around the globe.
YES: The Games are too costly to be rebuilt every four years
By Andrew Zimbalist

Andrew Zimbalist

If hosting the Olympics yielded positive outcomes economically, culturally and

environmentally, then it would be desirable to share the wealth with as many cities as
possible. But that isn’t the case.

Consider Tokyo 2020, whose experience prior to Covid was not atypical. When
Tokyo was awarded the 2020 Games, the projected operating budget was $7.4 billion.
The last budget submitted in December 2019 was $12.6 billion. An audit by the
Japanese government, however, identifies approximately $30 billion of spending to
host the Games—including government spending on things like construction of
housing and sports facilities and transportation and utilities infrastructure—and some
estimates go considerably higher still.
Japan completely rebuilt its national stadium to host this year’s Summer Olympics, which now are
postponed until 2021 because of the pandemic.
PHOTO: NAOYA OSATO/ASSOCIATED PRESS

Prior to Covid, the Games were expected to generate some $6 billion in revenue.
Because of International Olympic Committee requirements, almost none of the
income and sales connected to the Games can be taxed. The upshot is net losses to the
municipal and national government that approach $20 billion.

The Tokyo Games are slated to use more than 40 venues, including new, temporary
and existing facilities. The price tag on the new Olympic Stadium is $1.6 billion. The
government audit projects that annual operating and maintenance costs of the new
venues could reach $20 million. The reason these facilities didn’t exist before the
Olympics is that they had no economically viable use. They are unlikely to have one
after the Games.

Excesses and shortfalls

Negative outcomes are hardly unique to Tokyo, and they go well beyond finances. For
the Beijing Games in 2008, the extensive displacement of residents to make space for
the massive Olympic infrastructure drew international attention.
The costs of the Sochi Games in 2014 ballooned to an estimated $50 billion or more.
Rio 2016 witnessed the eviction of thousands of poor people from their homes; a
heightening of the military’s involvement in everyday life as soldiers were heavily
involved in security and evictions; endless corruption scandals; yawning public
deficits; extensive ecological damage; and political upheaval. Pyeongchang 2018 was
projected to cost $6 billion but ended up costing an estimated $14 billion, and
thousands of trees were felled on the natural preserve of Mt. Gariwang to facilitate the
downhill skiing competition. The list of problematic outcomes and financial shortfalls
goes on and on, helping to explain why the IOC has had such difficulty finding willing
bidders for recent Games.

One argument that is sometimes made is that at least some of the infrastructure built
by host cities is of lasting benefit, particularly new transit lines. But that spending
generally would have been way down any priority list of public-transportation
investment.

Scaling back the Games would mean less waste, but it wouldn’t, as some suggest,
have enough of an impact to justify continuing to move the Olympics around the
globe. Again, the example of Tokyo isn’t encouraging. Cost-cutting there may have
saved $1 billion to $3 billion—nowhere near enough to close the budget gap the
Tokyo and Japanese governments are going to have to fill.

Olympic Shangri-Las
Back in 1896, when the modern Games began, it was necessary to move the Games
around to allow them to be experienced world-wide. That model is outdated. Hosting
requires hundreds of acres of scarce urban real estate, not only for the athletic
facilities but for the supporting infrastructure and ceremonial space. People must be
pushed aside and facilities, mostly without an economic raison d’ètre, must be
maintained. Why should the Olympic Shangri-La have to be rebuilt in a new city
every four years at a cost of billions of dollars?

Political rivalries and the long-term threat of political instability at potential

permanent Olympic sites could make finding those sites difficult—though the initial
choices might be less quarrelsome than some would expect, because the Games have
become such a financial burden. But I’m not suggesting that creating and maintaining
permanent sites would be problem-free—only that they would be preferable to the
current system. Also, any competitive advantage for athletes from the countries that
would host the Games would be too minimal to matter.

The Olympics have become a construction event. But the Olympics, as a sporting
event, have value, both real and symbolic, and should be preserved. The sensible
solution is to have one permanent summer and one winter location.

Dr. Zimbalist can be reached atreports@wsj.com.

NO: Scale back the Games instead

By Jim Parry

Jim Parry

There are serious criticisms to be made of the Olympics: They’re costly and disruptive
to cities. But single-site Games aren’t the answer.
Instead, the answer is simple: Scale the Games back and plan them better. That can
certainly be done. And it wouldn’t deprive us of the many benefits of having the
Olympics move around the world.

No doubt something needs to be done. Rio protesters against the 2016 Olympics had
legitimate complaints about government corruption and underspending on health and
education amid lavish spending on the Games. Montreal has only just paid off its debt
from 1976, and there are many examples elsewhere of sport facilities now abandoned
or dismantled.

But it isn’t beyond the wit of man to come up with a model more favorable to cities
and beneficial to citizens. For starters, a recent University of Oxford study on
Olympic costs says a major reason for the rising costs of the Games is that the
International Olympic Committee has required all sorts of expensive provisions as
conditions of holding the Games, while requiring the host city to pay for them.

Cities must hold the IOC to account. Now is a good time to reverse the trend to
gigantism by rescaling the Games to a smaller, more manageable size. Cities need to
resist the IOC’s many demands, as well as the desire of individual sports to self-
aggrandize by coming up with more disciplines and more events. The resulting
savings would allow for the planning of affordable Olympics with benefits to the host
cities.

Original values
But the question of whether to limit the Games to single sites goes beyond cost and
other practical issues. The vision of Pierre de Coubertin in reviving the Olympics in
1896 was of a “perambulating games,” whose aim was to take the values of sport and
the Olympic ideal of education through sport around the world, exhibiting the basic
values of old-fashioned liberalism—freedom, equality, fairness and the rule of law.

Hosting the Games is both an opportunity for cultural expression (think of the 1988
Seoul Opening Ceremony that brought aspects of Korean culture into the international
spotlight) and for the manifestation at a local level of all that is best in global human
sporting achievement. You can get some of that on your screen—but nothing beats the
real thing in your own backyard.

Spectators arrive at Stratford station to reach the Olympic Park before the opening ceremony of the
London 2012 Olympic Games.
PHOTO: FRANCK FIFE/AGENCE FRANCE-PRESSE/GETTY IMAGE

Even on a purely practical level, it is possible for cities to benefit from hosting the
Olympics. In London, for instance, the 2012 Games not only came in on budget and
paid for themselves out of income, they also stimulated long-needed government
infrastructure spending on the rehabilitation of east London, including a new rail
system, and ensured prompt completion—a boon for the city. Most of the sports
facilities built for those Games were either temporary or planned so that they would be
used after the Games—an example that any host city can follow to avoid ending up
with a collection of useless venues on land that could be put to better use. Given good
planning, hosting the Games provides the opportunity of a lifetime for a country to
design its own world-class facilities that can be used for many years. This is global
sports development through the Olympics.
No single answer
Single sites would present their own serious problems. There would still be huge costs
of building, maintenance and long-term upgrading of facilities, some of which would
have to be mothballed and fired up once every four years for a month. And where will
the sites be located—Russia, China, the U.S., somewhere in Europe? Political rivalries
would make initial agreement difficult, and then how would the responsibilities and
powers of administering the Games be coordinated?

Further, if home ground is an advantage, won’t the sites chosen confer an unfair
advantage on the host countries’ athletes? Athletes from countries furthest away will
forever be furthest away. And what happens if the chosen sites are in countries
afflicted with unforeseen political instability years from now?

If anything, the Games need to expand their reach, not retract it. FIFA set an example
by accepting bids for soccer’s 2010 World Cup tournament only from Africa—while
there has never been an Olympics in Africa. I say, let’s perambulate!

Dr. Parry can be reached atreports@wsj.com.

More on the London Games

After publication, Dr. Zimbalist disputed one of the assertions in Dr. Parry’s essay. In
the interest of clarifying both sides of the debate for readers, we’re adding the
following exchange between the two, focusing on the 2012 Olympic Games in London.

DR. ZIMBALIST: Mr. Parry claims that it is feasible to downscale the Olympics

sufficiently to transform hosting the Games into an economically viable proposition. I
wish it were so, but evidence is to the contrary. One piece of evidence Mr. Parry
offers is the London Games of 2012. He writes that the Games came in under budget.
The facts suggest a different inference. When London was chosen as the host by the
IOC in 2005, the proposed budget was £2.4 billion (or $4.37 billion at the time).
Several years later, the budget was almost quadrupled to £9.3 billion. It was this latest
budget that one can argue London 2012 met. But by such a standard, every budget can
be balanced. Note too that the budget in question excludes most facility and
infrastructure costs.
DR. PARRY: I did not offer London 2012 as an example of successful downscaling,
but as an example of relatively good planning. Is Mr. Zimbalist claiming that
downscaling could never work? Where is his evidence for that? If we were to have a
single site, would he want this to be downscaled, or not? If not, where are his relative
assessments of costs? Is he claiming that good planning is not part of the solution?
I did not say that the London Games came in under budget, but rather on budget. We
should distinguish the cost of the Games themselves from associated government
infrastructural costs. Different economists present different “facts”—but, whatever the
facts, the British government was delighted with the economic outcomes.

I cannot think of a major capital project (airport, highway, stadium, military) that has
not been budget-revised over time—what has this to do with anything?

DR. ZIMBALIST: London 2012 was not well planned. The new Stratford rapid train
station and the nearby housing were part of a project of the London and Continental
Railways that was initiated in 1997 and not part of the Olympic planning. Gavin
Poynter, British economist at the University of East London, observed that London
2012 brought the city a stadium it didn’t need, four- and five-star hotels it didn’t need,
and additional high-rise, high-priced developments it didn’t need. Promises to the
contrary, there was not much in it for lower-income people.

Ever since the extravagant Sydney Games of 2000, the IOC has had an explicit project
to downscale and lower costs. Instead, costs have exploded. Political and economic
forces will make it hard to reverse the trend.

Yes, large construction projects often have cost overruns and revised budgets. I don’t
know of one that nearly quadrupled its cost and was considered on budget.

DR. PARRY: Of London 2012, I said “relatively good planning”—and that is

undeniable, given the comparators. Stratford station was indeed an explicit part of
infrastructure development of the wider Thames Gateway, guaranteed by government,
as well as the detoxification and redevelopment of the industrial wasteland that
became the Olympic Park. My point was that event-related and non-event-related
costs should be disambiguated, if we wish to discuss the cost of the Games
themselves. (And surely you are not saying that downscaling is impossible—even at
your preferred single site?)

Notice that even the economist Gavin Poynter is critical of conducting policy
discussion only on a cost/benefit basis. Cost is not the same as value. (Consider the
rebuilding of Notre Dame after the fire.) We must see value and legacy in much wider
terms, as did the British government in London, and as should we all in future
Olympics. Let’s perambulate!