BUSINESS

The IOC’s Tough Fiscal Talk Is PR Fluff

What if I told you every Olympics is doomed to be a financial disaster?

BUSINESS
AFP/Getty Images
Dec 02, 2016 at 2:15 PM ET

Maybe, just maybe, the International Olympic Committee will be able to tamp down on the spiraling costs attached to the 2020 Olympic Games in Tokyo. That could happen, but it really doesn’t matter.

Over the last few months, various factions within the Japanese government have been debating proposed venue changes and/or the creation of additional sites to house the expanded slate of events. The ostensible goal is to keep the final bill from totaling $30 billion, a four-fold increase from the original estimate featuring a showcase for shiny new robots.

On Thursday, after huddling with Japanese officials, IOC vice president John Coates put his foot down, reiterating that even the lowest, previously-agreed to price tag of $20 billion dollars just would not do.

“The IOC is not in a position to accept a budget of $20 billion,” Coates said according to the Associated Press. “The IOC just isn’t going to sign off on a budget which we think exceeds the costs that the games could be staged for. That would be giving the wrong impression and it would not help us in terms of other candidate cities.”

Ah, the “wrong impression.” Coates’ wording is intentionally vague, but it’s pretty clear what he’s referring to. Namely, he’s concerned with the growing realization that 21st century mega-sporting events always end up costing far, far more than anticipated, with worthless venues that end up abandoned and literally rotting and the installation of a massive, often unregulated surveillance state, all the while scarce public dollars are funneled to wealthy developers and even government officials.

When the the economic boom promised by the IOC and the host nation’s organizing committee doesn’t arrive, you get headlines like this from Public Radio International: “Three months after the Olympics, Rio de Janeiro is broke.”

The state of Rio is broke. It hasn’t been able to pay its bills since long before the games. A federal bailout kept police on the streets and hospitals open while Olympics tourists were in town. But now the money has dried up, and public employees aren’t being paid.

The state government is voting on an austerity package that could slash state workers’ wages and pensions by 30 percent. That’s triggered violent protests and led demonstrators to briefly storm the state Legislature last month.

Meanwhile, crime is surging across the state. From January to October, murders increased by 18 percent, and street robberies jumped by 48 percent compared to the same time last year, according to the state’s security institute.

Rome pulled out of the race to host the 2024 Games for precisely these reasons, and while President-elect Trump recently embraced Los Angeles’ 2024 bid (because of course), in conjunction with the efforts of grassroots activists, more and more cities are making the fiscally prudent decision to walk away, and the IOC doesn’t like it.

In one sense, Coates is correct. Throwing an addition $10 billion dollars on to the pyre won’t help anyone. But even if the Japanese economy is better equipped to deal with the fallout from hosting the Games than Rio, it’s not exactly at peak health, barely escaping recession in recent years and struggling to yield consistent growth.

Even so, this isn’t about a desire to hew to as tight a budget as possible. Coates’ sternly-worded statements are a public relations gambit; an attempt to paper over the scary headlines about the billions that will be wasted and the sad reality that is soon to follow.