29 March 2022
PDF version [844KB]
Rodney
Bogaards
Economic Policy[1]
Executive
summary
- In February 2021, the International Olympic Committee (IOC)
designated Brisbane's bid for the 2032 Olympic and Paralympic Games (the Games)
as having ’Preferred Bid Status’. This meant that Brisbane was the only one of
numerous bid cities that progressed to the ‘targeted dialogue’ phase. This was
followed by a ‘final negotiations’ phase, with the official declaration of
Brisbane as the successful host city occurring at an IOC session on 21 July
2021.
- Economic impact studies commissioned by hosting governments
before the Games commence often conclude that hosting will provide a major
economic boost for the host cities and regions. Most economic evaluations
carried out after the Games, have concluded that the expected benefits are
either overstated or in some cases non-existent and that the costs were much
larger than budgeted.
- Given the generally negative host city experiences, the IOC has
had to rethink how the Games are delivered to increase the value proposition of
hosting. This rethinking led to many changes in key areas of the bidding and
hosting frameworks. Together they became known as the ‘New Norm’ changes. As a
result of these changes, the IOC suggests costs are expected to decline for prospective
host cities.
- There are a number of reasons why the IOC’s ‘New Norm’ changes
may not be sufficient to prevent future Games’ hosts exceeding
their budgets. A recent research paper has put
forward six additional steps for better Games management. These steps
should be studied by any prospective host government that is yet to fully
commit to hosting the Olympic Games.
- Based on this history, there is considerable uncertainty as to
whether the benefits of the Brisbane Olympics in 2032 will outweigh the costs to
the community, even with the ‘New Norm’ changes. This suggests the need for any
prospective host government to undertake a careful assessment of costs, benefits
and risks before committing to host the Olympic Games.
Contents
Executive summary
Introduction
The economic impact of hosting the
Olympic Games
The IOC’s ‘New Norm’ changes
Potential impact of the ‘New Norm’
changes?
Brisbane’s 2032 Olympic Games bid
Supplementary KPMG benefit analysis
that does little to enhance clarity
Better Games management
Conclusion
Introduction
In February
2021, the International Olympic Committee (IOC) designated Brisbane's bid for
the 2032 Olympic and Paralympic Games ’Preferred Bid Status’.[2]
This meant that Brisbane was the only one of numerous bid cities[3]
that progressed to the ‘targeted dialogue’ phase. This was followed by a ‘final
negotiations’ phase[4],
with the official declaration of Brisbane as the successful
host city occurring at an IOC session on 21 July 2021.[5]
Following the
announcement of the Australian Olympic Committee (AOC) (and Brisbane 2032
Committee) commencing targeted dialogue with the IOC to host the 2032 Olympic
Games, the IOC President Thomas Bach stated:
According to the clear report of the Future Host Commission,
the Brisbane 2032 project is fully aligned with Olympic
Agenda 2020 and the new recommendations of Olympic
Agenda 2020+5. It proposes sustainable Games in line with the region’s
long-term strategy and using primarily existing and temporary venues.[6]
Chair of the Future
Host Commission[7],Kristin
Kloster Aasen, added:
We are delighted the IOC Executive
Board [EB] agreed with the Commission’s recommendation to invite Brisbane 2032
to targeted dialogue. The IOC EB and the Commission noted the excellent
progress that it has made, the strength of its proposition and the strategic
opportunities it affords to the Olympic Movement. It meets all the criteria to
be invited to move into the next stage.[8]
According to the IOC, the main reasons why Brisbane 2032 was
proposed for ‘targeted dialogue’ were:
The very advanced Games concept, which is fully aligned with
Olympic Agenda 2020 and using 80 to 90 per cent existing or temporary venues.
The venue masterplan, which has already been discussed with
International Sports Federations and the International Paralympic Committee.
The high level of experience in hosting major international
sports events.
The favourable climate conditions for athletes in July and
August, despite the current global challenges caused by climate change.
The alignment of the proposed Games with South-East
Queensland’s long-term strategy (“SEQ City Deal”, February 2019) to improve
local transport infrastructure, absorb demographic change and promote economic
growth.
Australia’s sporting success throughout modern Olympic
history. The last Games in Oceania were Sydney 2000, which would mean the Games
returning to the continent 32 years later.
The existing and planned transport infrastructure and
experience in traffic management, which can adequately meet the demands of the
Olympic Games and were successfully implemented for the Commonwealth Games in
2018.
The existing hotel accommodation inventory, which already
meets Games requirements.
Strong support from all three levels of government, as
confirmed on several occasions by highest-level representatives from the City
of Brisbane, the Southeast Queensland Council of Mayors, the State of Queensland,
and the federal government.
The strong public support and that of the private sector.
Australia’s high scores on human development indices, in
particular its great progress towards achieving the United Nations Sustainable
Development Goals.[9]
In reporting to the IOC Executive Board, the IOC prepared
this presentation
outlining its feasibility assessment for Brisbane 2032, including analysis of
both strategic and technical criteria. The decision to move to the ‘targeted
dialogue’ phase was based upon a positive feasibility assessment, third-party
independent expertise, socio-economic and political factors, alignment with the
Olympic Agenda 2020 and public support.
Brisbane Lord Mayor and Bid Committee member Adrian
Schrinner is confident that a 2032 Brisbane Olympics will generate a positive
outcome for the community because the economic and social benefits from the
Olympics will be widespread and long lasting and the economic costs will be
contained by using (some) existing and temporary venues:
"Because we're not building everything brand new and
shiny, because we're not in this very expensive bidding process, because we're
spreading it over an entire region rather than concentrating it in one city all
in one small area, those factors mean it's a very different type of
Olympics," Brisbane Lord Mayor and bid committee
member Adrian Schrinner said.
If we get the Games, that will mean a decade-long confidence
boost to our region and that will have a long tail as well."
Some of the existing venues would need to be expanded or
renovated, but Mr Schrinner said it was "a relatively small gap in the
scheme of things".[10]
On the other hand, Professor Andrew
Zimbalist, a noted US academic and sports economist, concluded:
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 several-week period of the games or the
prior construction. But more often than not, the main legacy consists of white
elephants that cost billions to build and millions annually to maintain, along
with mountains of debt that must be paid back over ten to thirty years.[11]
This research paper explores the potential economic impact
of hosting the Olympic and Paralympic Games (the Games) and explains the reasons
why hosting the Games may not provide the payoff that some might expect. It
then examines the Games’ costs and cost overruns, and briefly considers the host
city experience of Rio de Janeiro (2016), London (2012) and Sydney (2000) as
host cities. The paper then considers the ‘New Norm’ changes implemented by the
IOC, examining the likelihood of these preventing future Games’ hosts exceeding
their budgets. Finally, the paper evaluates the information publicly available
on Brisbane’s 2032 Games bid and makes some suggestions, based on recent
research, of how those involved with Olympic bids can improve the odds of
generating a positive outcome for their communities.
The economic
impact of hosting the Olympic Games
Economic impact studies commissioned by hosting governments before
the Games commence often conclude that hosting will provide a major economic
boost for the host cities and regions by creating jobs, attracting tourists,
and boosting overall economic output. While there are some exceptions (notably,
Los Angeles (1984) and Barcelona (1992)), most economic evaluations carried out
after the Games, have concluded that these purported benefits are either
overstated or in some cases non-existent and the actual costs
were much larger than budgeted.
In Los Angeles’ case, it was the only bidder for the 1984 Games.
This enabled the local organising committee to arrange for the US Olympic
Committee and the IOC to guarantee the city against any operating losses. Los
Angeles also passed an ordinance stipulating that it would not spend public
money on the Games. The city also utilised much of its existing sporting
infrastructure, including some from the 1932 Olympics, thereby requiring a
minimal construction budget, while University dormitories were used for the accommodation
of athletes and their coaches, rather than a purpose-built Olympic Village. A
large increase in television broadcast revenue further helped: broadcast
revenue in Los Angeles (US$286.9 million) was more than three times the amount
of the preceding 1980 Moscow Games (US$88 million). Partly driven by television
coverage increasing from 111 countries for Moscow to 156 countries for Los
Angeles, the end result was an operating surplus of US$215 million.[12]
In Barcelona’s case, its success has been attributed to the
Games working harmoniously with established city planning processes. The master
plan for reinvigorating the Barcelona cityscape preceded the Games. This meant the
Games had to fit in with the pre-existing plan, rather than the typical pattern
of the plan having to be revised to fit in with the Games. A good example of
this was the early construction of sports facilities:
Of the thirty-seven sports facilities ultimately used during
the 1992 Olympics, twenty-seven were already built and another five were under
construction at the time Spain was selected to host the games in 1986.[13]
This meant that around 83 percent of the total cost of the
Games went into non-sports infrastructure for use by the general community,
most of which was financed by the private sector.[14]
Arguably, many of the studies undertaken before the Games are
subject to ‘optimism bias’ since they are prepared by consulting firms hired to
facilitate a bid process using methodologies and assumptions that will deliver
the desired result. On the other hand, studies undertaken after the Games are usually
undertaken by independent scholars using data generated before, during and
after the event in models designed to establish the economic effects of the Games
(for example, on GDP, employment and trade).[15]
A good overall survey of the host city experience is
provided by the Council on Foreign Relations. The Council concluded that, ‘[u]ltimately,
there is little evidence for an overall positive economic impact’.[16]
Academic
studies on the economic impact of hosting the Games
According to some economists, there are several explanations
for why mega-sports events like the Games do not tend to provide an overall positive
economic impact for the host country:
- much of the economic activity is an ‘economic transfer’ because
it is generated from locals who would have spent their money in the economy
regardless
- there is a ‘crowding out effect’ as economic activity tailored to
the Olympics ‘crowds out’ other economic activity that would have taken place
during the relevant period. For example, the UK saw a decline in overall
international visitors when it hosted the 2012 Summer Olympics. Although the
2012 London Olympics attracted 800,000 visitors to the United Kingdom, the UK
Government reported overall international visitor numbers were down compared to
the corresponding quarter of the previous year and remarked ‘[t]his suggests
that there was substantial displacement of regular visitors who were deterred
by the potential for overcrowding, disruption and price rises because of the
Games’.[17]
Displacement of regular visitors was also a concern at the 2018 Gold Coast
Commonwealth Games.[18]
- money spent in a local economy during a mega-event may not remain
in the local economy (particularly where hotels or other service industries are
owned by non-residents)
- potential host cities and countries face numerous competitors, encouraging
bids with promises to lavish spending on both facilities and operations, and
‘optimistic accounting’. Organising bodies have rarely selected hosts that have
promised to minimise spending on sports infrastructure
- unless there is significant unemployment in a host city, Olympic
activities—such as venue construction, event organisation and sports
tourism—merely act to displace employment in other activities, instead of
creating new employment and
- infrastructure costs generally spiral out of control due to the
rushed schedules; and infrastructure benefits are oversold as stadiums and
other non-sports facilities remain unused or under-utilised once the Games have
concluded. Following three weeks of intense use during the Olympics, hotels,
airports and transportation networks may be extensively overbuilt for the
post-event period. For example, two major luxury hotels built for the 1994
winter Olympics in Lillehammer, Norway, filed for bankruptcy shortly after the
close of the Games.[19]
These economists conclude that:
It remains a widespread belief among countries that there are
substantial national gains to be made from hosting these global events, but the
evidence indicates that this is rarely the case.[20]
Table 1 shows that most economic studies have reached similar
negative conclusions regarding employment, income, sales revenue, trade and
investment. The repeated claims by Games’ supporters that hosting the Games is
a catalyst for economic growth and employment seems to find little support in
independent economic research.
Table 1: Studies on the economic impact of hosting the
Olympic Games
Source |
Main Findings |
2013,
A Feddersen and W Maennig, ‘Employment Effects of the Olympic Games in Atlanta
1996 Reconsidered’ |
There was no long-term and
persistent employment boost attributable to the 1996 Atlanta Olympics.[21] |
2012,
W Maennig and F Richter, ‘Exports and Olympic Games: Is There a Signal Effect?’ |
Authors disputed the
empirical findings of Rose and Spiegel (see below) on the grounds that their
sample of host countries was not a representative sample. When the authors
corrected for this selection bias, they found that there remained little empirical
evidence that hosting Olympic Games leads to better trade and investment
outcomes for host countries.[22] |
2011,
S Billings and S Holladay, ‘Should Cities Go For The Gold? The Long-Term
Impacts Of Hosting The Olympics’ |
No long-term impact of
hosting the Olympic Games on a country’s Gross Domestic Product per capita or
on a measure of trade openness.[23] |
2010,
R Baumann, B Engelhardt and V Matheson, ‘The Labor Market Effects of the Salt Lake City
Winter Olympics’ |
An analysis of the 2002
Salt Lake City Winter Olympic Games. Examining taxable sales in the counties
in which Olympic events took place, they found that some sectors—such as
hotels and restaurants—prospered, while other retailers—such as general
merchandisers and department stores—suffered. Overall, the gains in the
hospitality industry were lower than the losses experienced in other sectors.
The authors warned that ‘[g]iven the experience of Utah, potential Olympic
hosts should exercise caution before proceeding down the slippery slope of
bidding for this event.’[24] |
2009,
A Rose and M Spiegel, ‘The Olympic Effect’ |
Hosting a mega-event such
as the Olympics had a positive impact on national exports. However, they also
found that unsuccessful bids to host the Olympics had a similar positive
impact on exports. In other words, the Olympic effect on trade can be
attributed to the signal a country sends when bidding to host the Games,
rather than the act of hosting.[25] |
Olympic costs
and cost overruns
A detailed examination of Olympic Games costs and cost
overruns (using sports-related costs only) has recently been provided in a 2020 paper
from Oxford University's Saïd Business School.[26]
The average sports-related costs[27]
of hosting the summer Olympics between 1960 and 2016 was nearly US$6.0 billion
(with Rio costing about US$13.7 billion and London nearly US$15.0 billion).[28]
The average cost for the five Games held in the decade 2007–2016 was US$12.0
billion. The Sochi Winter Olympics cost US$21.9 billion, well above the average
winter Olympics cost of US$3.1 billion (Table 2). Non-sports-related costs
were typically several times that amount. Data was only available for actual
sports-related costs for 25 of the 30 Games during the time period.
Table 2: Sports-related cost of the Olympic Games,
1960–2016, in 2015 US dollars
Games |
Events |
Athletes |
Cost (billions) |
Summer: |
|
|
|
Rome 1960 |
150 |
5,338 |
n/a |
Tokyo 1964 |
163 |
5,152 |
0.282 |
Mexico City 1968 |
172 |
5,516 |
n/a* |
Munich 1972 |
195 |
7,234 |
1.009 |
Montreal 1976 |
198 |
6,048 |
6.093 |
Moscow 1980 |
203 |
5,179 |
6.331 |
Los Angeles 1984 |
221 |
6,829 |
0.719 |
Seoul 1988 |
237 |
8,397 |
n/a |
Barcelona 1992 |
257 |
9,356 |
9.687 |
Atlanta 1996 |
271 |
10,318 |
4.143 |
Sydney 2000 |
300 |
10,651 |
5.026 |
Athens 2004 |
301 |
10,625 |
2.942 |
Beijing 2008 |
302 |
10,942 |
6.810 |
London 2012 |
302 |
10,568 |
14.957 |
Rio 2016 |
306 |
10,500 |
13.692 |
Average, Summer |
239 |
8,177 |
5.974 |
Median, Summer |
237 |
8,397 |
5.560 |
|
|
|
|
Winter: |
|
|
|
Squaw Valley 1960 |
27 |
665 |
n/a |
Innsbruck 1964 |
34 |
1,091 |
0.022 |
Grenoble 1968 |
35 |
1,158 |
0.888 |
Sapporo 1972 |
35 |
1,006 |
0.117 |
Innsbruck 1976 |
37 |
1,123 |
0.118 |
Lake Placid 1980 |
38 |
1,072 |
0.435 |
Sarajevo 1984 |
39 |
1,272 |
n/a* |
Calgary 1988 |
46 |
1,432 |
1.109 |
Albertville 1992 |
57 |
1,801 |
1.997 |
Lillehammer 1994 |
61 |
1,737 |
2.228 |
Nagano 1998 |
68 |
2,176 |
2.227 |
Salt Lake City 2002 |
78 |
2,399 |
2.520 |
Torino 2006 |
84 |
2,508 |
4.366 |
Vancouver 2010 |
86 |
2,566 |
2.540 |
Sochi 2014 |
98 |
2,780 |
21.890 |
Average, Winter |
55 |
1,652 |
3.112 |
Median Winter |
46 |
1,432 |
1.997 |
*Mexican peso and
Yugolsavian dinar experienced hyperinflation during or after the Games.
Source: B Flyvbjerg, A Budzier and D Lunn, ‘Regression to
the tail: why the Olympics blow up’, Environment and Planning A: Economy
and Space, published online, 15 September 2020, p. 27.
According to the authors, every summer Olympics since 1960
has run over budget, at an average of 213 per cent in real terms; the average
cost overrun for the winter Games was 142 per cent (Table 3). It is interesting
to note that the authors could only obtain data for 19 out of 30 Games for cost
overruns during the 1960–2016 time period—that is, for 11 Games they could not
find what the estimated and actual costs were, ‘despite trying hard’.[29]
The methodology for determining the cost overruns is
described as follows:
Cost overruns are measured as actual outturn cost in percent
of estimated costs. For example, if a Games was estimated to cost $8 billion
and actually cost $12 billion, then the Games incurred a cost overrun of 50 per
cent. The baseline for measuring cost overrun is the cost estimate at the time of
bidding for the Games. All costs are measured in real terms, i.e., not
including inflation.[30]
Table 3 shows the percentage cost overruns in real terms
for the Olympic Games 1960–2016.
Table 3: Sports-related cost overrun of the Olympic
Games, 1960–2016, calculated in local currencies, real terms
Games |
Cost overrun % |
Summer: |
|
Montreal 1976 |
720 |
Barcelona 1992 |
266 |
Atlanta 1996 |
151 |
Sydney 2000 |
90 |
Athens 2004 |
49 |
Beijing 2008 |
2 |
London 2012 |
76 |
Rio 2016 |
352 |
Average, Summer |
213 |
Median, Summer |
120 |
|
|
Winter: |
|
Grenoble 1968 |
181 |
Lake Placid 1980 |
324 |
Sarajevo 1984 |
118 |
Calgary 1988 |
65 |
Albertville 1992 |
137 |
Lillehammer 1994 |
277 |
Nagano 1998 |
56 |
Salt Lake City 2002 |
24 |
Torino 2006 |
80 |
Vancouver 2010 |
13 |
Sochi 2014 |
289 |
Average, Winter |
142 |
Median Winter |
118 |
Source: B Flyvbjerg, A Budzier and D Lunn, ‘Regression to
the tail: why the Olympics blow up’, Environment and Planning A: Economy
and Space, published online, 15 September 2020, p. 29.
The Australian Olympic Committee President, John Coates,
declined to comment on the Oxford University paper: ‘I’ve taken the view that
I’ve got more productive things to do with my time than to analyse that report
and respond to it’.[31]
However, the IOC
newsletter did take issue with the approach taken in the Oxford University paper
which combined operating costs and sports-related capital costs to give an
overall estimate of sports-related costs. The IOC suggested that this approach over-estimates
the costs of the Olympic Games. The focus of the Oxford University paper,
however, is the gap between projected and actual costs, rather than the
allocation of sports-related capital costs. In any event, given many high-capacity
Olympic venues suffer from low (or no) demand after the Games conclude, the
apportionment could easily be quite high for many venues, especially ‘white
elephant’ infrastructure (where it would be 100 per cent).[32]
Continuing the trend of the actual costs of host cities being
larger than budgeted, the 2021 Tokyo Olympics has also suffered large cost
overruns—not all due to the postponement from COVID-19—coming in at over US$22
billion compared to projected costs of US$7.3 billion when Tokyo was awarded
the Games in September 2013.[33]
These costs include operational costs and capital costs (both direct and
indirect) which are described more fully, later in the paper, in relation to
the 2032 Brisbane Olympic Games bid.
The 2016 Rio,
2012 London and 2000 Sydney Olympic Games
In this context, we can look more closely at the experience
of three city case studies: Rio and London because they were the most recently
completed (and evaluated) summer Olympics. Similarly, Sydney was the most
recent summer Olympics undertaken in Australia. Together they provide the most contemporary
examples of host city experiences that have been subject to some degree of reflection
or appraisal.
2016 Rio
Olympic Games
The 2016 Rio Olympic Games provides a useful case study to
highlight the downside risks of hosting the event. The city is still struggling
with debt, ongoing maintenance costs for abandoned facilities, underfunded
public services and rising crime:
The final tally for Brazil, the first South American country
to host the Olympics, exceeded $20 billion, with the city of Rio alone
shouldering at least $13 billion ... The state [also] required a
$900 million bailout from the federal government to cover the policing
costs of the Olympics, and is still unable to pay all of its public employees,
which some analysts say has contributed to the city’s rising violent crime.
The city also had to invest heavily in a broad range of
infrastructure, much of it with dubious long-term utility. The city built four
clusters of stadiums and other facilities, connected by new highways and rail
lines. Most of these came in far over budget, with a state auditor finding the
city’s $3 billion subway extension was overbilled by at least 25 percent.
The construction was meant to reinvigorate some of Rio’s
struggling neighborhoods, yet more than a year later most venues are abandoned
or barely used. The Olympic Park is closed, with most of its facilities overrun
with waste and infested with insects and rodents. The nearly four thousand
apartments that made up the athlete’s village were meant to be converted into
housing for citizens, but sit vacant. Government attempts to auction the venues
to private owners have failed, leaving the city with a $14 million annual price
tag for maintenance. Meanwhile, at least seventy-seven thousand people were
evicted from their homes in the course of construction, and the city, still
dealing with its budget crisis, has since suspended its promised program to
clean Rio’s deeply polluted waterways.[34]
2012 London
Olympic Games
Some economic evaluations have suggested that there are
sustained economic benefits to hosting the Games. For example, the London
2012 meta-evaluation, a government-funded report, suggested that the
economic and social legacy of the 2012 London Olympic Games has been positive
(although this ‘positive’ did not appear to be quantified).[35]
A subsequent paper
by one of the consultants to the report estimated the benefits of the Games—on tourism
in 2012, on catalyzed private sector investments in East London, on inward
investment and trade deals to the UK, and on employability and skills development—to
be between £27.9 billion and £40.5 billion over the period 2004 to 2020.[36]
However, there have been criticisms of the government report
as being a ‘political document’ rather than a serious piece of economic
evaluation. One peer reviewer noted that the ‘report provided a very bullish
view, refused to comment on any of the negatives, or even to really qualify any
of the results’.[37]
Another economist argued that the report was undertaken too soon after the
Games to know whether the expenditure was worth the investment.[38]
2000 Sydney
Olympic Games
A 2007 economic evaluation of the 2000 Sydney Olympic Games
concluded that rather than producing an economic benefit the Sydney Games
actually reduced Australian household consumption by $2.1 billion.[39]
The authors use a dynamic computable general equilibrium (CGE) model to
estimate the extent of a tourism legacy effect attributable to the Games.[40]
The results ‘lend no support to the existence of an
induced tourism effect’.[41]
A report from the European Tour Operators Association (ETOA)
using ABS
data found that the number of foreign visitors to Australia increased from 4.5
million in 1999 to 4.9 million in 2000, the year of the Sydney Olympics. These
numbers were less than anticipated and then dropped away steadily in the three years
following the Sydney Games to 4.7 million in 2003 before rising again in 2004.[42]
Looking at foreign and interstate
tourism, construction and financing, and ‘Olympic operations’ (modelled as an
industry with its own sales and cost structure), the results ‘clearly suggest
that, in terms of purely measurable economic variables, … the Sydney Olympics
had a negative effect on New South Wales and Australia as a whole’.[43]
Interestingly, a
1998 paper—pre the Sydney Olympic Games—(by one of the same authors) drew
the opposite conclusion, that is, that there would be a net consumption gain of
$2.7 billion from the Sydney Olympics.[44]
A useful discussion of why these pre- and post-Olympic
results differed can be found in a 2012
article from Monash University:
In the pre-Games modelling, it was assumed that Games
expenditure would stimulate the labour market and lower unemployment. The
modelling also incorporated tourism forecasts which predicted that the Games,
by showcasing Sydney, would leave a legacy of a large boost in overseas tourism
to Australia. As it turned out, the Games occurred during a period of low
unemployment in Australia, meaning that Olympics activities - like venue
construction, event organisation and sports tourism - merely acted to displace
employment in other economic activities, instead of boosting employment.
Furthermore, the modelling we undertook after the Games
revealed no evidence that the Sydney Games had left a tourism legacy. Research
by us and others indicates that hosting the Games in well-known tourism
destinations does not have a strong advertising effect. With the Sydney
Olympics failing to increase employment or leave a large tourism legacy, there
are few other avenues for the Games to generate a net economic benefit.[45]
According to the Monash 2012 article, the financial
contribution made by taxpayers to the Sydney Games was in the vicinity of $2.2
billion (in 2007 dollars) or approximately $420 per Australian household.[46]
The consumption loss of $2.1 billion is similar in magnitude to the taxpayer
contribution to the Games of $2.2 billion. According to the authors ‘this is no
accident’:
Without unemployed resources or a tourism legacy, there is
little remaining in the economic modelling that can lift the size of the net
economic benefit above the size of the Games’ accounting loss. The Games’
losses, which ultimately must be covered by taxpayers, can thus be viewed as a
natural floor or starting point for the calculation of the net economic
benefits of any Games.[47]
The presence of a tourism legacy—a sustained increase in the
number of tourists in the years following the Sydney Olympic Games—was also not
supported by the Australian Tourism Export Council (ATEC) as described in
ETOA’s 2006 report:
The Sydney Olympics had few long-term positive impacts beyond
2000 on the growth of Australian tourism. The impacts were short-term and
contained within a relatively tight geographic region. The forecast of a strong
impact for the four years following the Games did not eventuate. As soon as the
Olympics finished, we started to see a fall away in inbound activity. Australia
went into three years of negative growth (2001, 2002 and 2003) ... The decline
started the day the Olympic focus shifted to somewhere else.[48]
While some attributed this decline in foreign tourists to
international terrorism events and global economic conditions, Australia’s
performance was in marked contrast to the success of New Zealand over the same
period, where foreign arrivals increased strongly.[49]
The IOC’s
‘New Norm’ changes
Given the generally negative host city
experiences, the IOC has had to rethink how the Olympic Games are delivered to try
to increase the value proposition of hosting. In December 2014, the IOC
Session gave unanimous approval to Olympic
Agenda 2020, providing the strategic direction for a major review of all
aspects of organising the Olympic Games—from candidature to Games delivery
through to legacy.
Of the 40 recommendations in the Olympic Agenda 2020 report,
six focused on aspects of the organisation of the Olympic Games:
1. Shape the bidding process as an invitation
2. Evaluate bid cities by assessing key opportunities and
risks
3. Reduce the cost of bidding
4. Include sustainability in all aspects of the Olympic
Games
12. Reduce the cost and reinforce the flexibility of Olympic
Games management
13. Maximise synergies with Olympic Movement stakeholders.[50]
According to the IOC’s Executive
Steering Committee for Olympic Games Delivery:
[T]he overall goals that underpinned these [6]
recommendations were to simplify the Candidature Process
and to create Games which are more flexible, easier to operate and less
expensive, whilst also unlocking more value for host cities over the long term.[51]
To address these goals, the IOC established three major
initiatives around candidature, delivery and legacy. The ‘New
Norm’ has been promoted by the IOC as an ambitious set of reforms that
reimagines how the Olympic Games are delivered. IOC President Thomas Bach
stated:
It is a fundamental rethinking of the organisation of future
Games. This will lead to a new norm – from the candidature for and the delivery
of the Games through to their legacy.[52]
The Chair of the Executive Steering Committee and IOC
Member John Coates stated:
The modifications presented in “The New Norm” address many
challenges associated with bidding for and hosting the Olympic Games. We
examined if the right services and products were provided, if timing of
delivery was optimal, and where we can provide additional expertise. What
resulted is a robust plan that reduces complexity and costs, while maximising
flexibility and partnership.[53]
An infographic of the IOC’s ‘New Norm’ reforms is provided
in Figure 1.[54]
The ‘New Norm’ reforms aim to provide more flexibility in designing the Games
to meet the host’s long-term development plans and ensure that cities seeking
to host the Games receive more support and assistance from the Olympic Movement
before, during and after the Games.
Figure 1: The ‘New Norm’ reforms
Source: IOC, ‘The New
Norm: It’s A Games Changer’, IOC website, accessed 6 April 2021.
In pursuing a 2032 Olympic Games for Brisbane, this new
assistance was recognised by the Queensland Premier:
… the IOC’s New Norm rules meant it was the ideal time for
the State to pursue the opportunity, with the IOC prepared to put in a
significant investment towards Games delivery and provide flexibility.[55]
Examples of
the ‘New Norm’ changes
Some 118 measures were put forward in the IOC’s New
Norm report, designed to reduce the Games’ overall footprint, optimise
operations and increase the value proposition of hosting the Games. According
to the IOC:
By examining the seven-year journey with former Organising
Committees (OCOGs), more than 80 of the 118 solutions that have been proposed
would result in cost efficiencies without compromising the Olympic experience.
The plan invites opportunities to reduce venue sizes, rethink transport
options, optimise existing infrastructure and reuse the field of play for
various sports.[56]
Some key examples of the ‘New Norm’ changes are provided
below.
- Candidature process—shorten the formal Candidature Stage to
streamline and simplify the process and reduce the workload and related costs
for cities (measure 5).
- Host city contract—ensure greater action is taken with regard to
sustainability and legacy by maximising the use of existing and planned
infrastructure and considering temporary and demountable venues where no
long-term legacy need exists (measure 8).
- Legacy—advise cities interested in hosting the Olympic Games to
develop a ‘high-level legacy plan,’ establishing priorities, action plans,
potential funding sources and strategies for proactive communications (measure
13).
- Games governance—ensure a greater role for the IOC in guiding,
influencing and assisting organisers (measure 23).
- Competition venues—no minimum requirements for venue capacities.
Instead, capacity should be determined according to context with emphasis on a
range of specific criteria (measure 32).
- Training venues—reduce the overall number of training venues and
the rental period for each by optimising the training schedule (measure 34).
- Testing of the fields of play—testing of the fields of play is
important to ‘stress test’ a number of venue functions, moreover for a number
of sports, competing or training in the actual venue is essential for reasons
of safety and fairness. The testing program must be tailored to achieving these
objectives while containing costs. To reduce costs, strong consideration must
be given to utilising events that are already planned to be held in the host
city/region and the country prior to the Games. For example, by means of other major
state, national or international competitions (measure 38).
- Olympic village(s)—advise host
cities/organising committees to consider temporary or demountable solutions
for the Olympic village(s) if no existing facility is suitable and permanent
facilities are not required post-Games (measure 44).
- Media services—advise host cities/organising committees to
consider multi-site, temporary or demountable solutions for the International
Broadcast Centre and the Main Press Centre if no existing facility is suitable
(measure 48).
- Technology—encourage organising committees to update their telecommunications
and central results management to reflect the latest technologies (cloud
computing, etc.), which has the potential to reduce resources (measure 57).
- Ceremonies—while keeping the objective of maximising the impact
of the Opening and Closing Ceremonies, organising committees are encouraged to
limit the production costs. The IOC and stakeholders will support organising
committees in exerting greater control over their ceremony investments (measure
69).
- Transport—organising committees are encouraged to find solutions
which make use of public transport and minimise the use of a dedicated fleet of
buses (measure 79).
- Accommodation—organising committees are encouraged to use
temporary accommodation for referees, workforce, journalists, broadcasters,
sponsors, etc. when existing capacities are insufficient or there is no post-Games
need for new permanent structures (measure 91).
- Food and beverage—simplify food and beverage services, especially
warm menus for some stakeholder groups. Where kitchen facilities must be fully
designed and built, warm food will be provided only to certain Games clients
(measure 97).
- Medical services—allow for specific services and/or equipment not
considered essential to be provided at local hospitals within reasonable
distance of the Olympic Village (maximum 15 minutes) instead of within the
Olympic Village Polyclinic (measure 101).
- IOC support to organisers—the IOC will introduce executive
learning and coaching to senior Games organisers. This will shorten and
accelerate the learning pathway for key individuals who need to take important
decisions in an unfamiliar environment (measure 112).
IOC expects cost
savings from the ‘New Norm’ changes
The IOC’s Executive Steering Committee for Olympic Games
Delivery suggests the ‘New Norm’ measures will improve the design and delivery
of future Olympic Games through:
Better integration of Olympic stakeholders in the governance
and delivery;
Overall plans fully adapted to local context;
Right sizing of resources (staff, equipment, spaces, etc.);
Right quality of services;
Use of third parties’ capabilities to deliver;
Shared solutions with previous and next organisers; and
Shorter delivery timelines.[57]
The IOC’s Executive Steering Committee for Olympic Games Delivery
estimates that there will be significant cost savings for host cities (see Figure
2):
Combined, the adoption of all the measures could lead to
maximum savings of up to USD 1 billion in the organisation of the Olympic and
Paralympic Games and USD 500 million in the organisation of the Olympic and
Paralympic Winter Games (based on previous OCOG budgets).
Savings are marked as “maximum” because, although they have
been calculated based on real spends or estimations at a series of previous
Games, implementation will depend on the local context for each city.[58]
Figure 2: Potential Savings as identified in the 2018 ‘New Norm’ report
Source: IOC, ‘The New
Norm: It’s A Game Changer’, IOC website, accessed 6 April 2021.
The biggest Olympic Games savings of US$228 million are
expected from a reduction in competition and training venue costs:
The increased flexibility in venue selection criteria arising
from the use of existing mono-functional venues, even if located outside the
host city / region; the elimination of minimum venue capacities, combined with
increased venue sharing opportunities; and reduced venue-specific requirements,
can lead to significant savings related to venue construction.[59]
Savings from technology/energy of US$207 million are also expected
to be significant:
The current Games delivery model for
technology is well established. It relies heavily on bespoke-technology
solutions and an intense level of resources required to manage planning,
delivery and operations. While successful, this model will be reconsidered
based on advances in information technology, including the introduction of
cloud technology, increased reliability of commercial telecommunications
services and changes in the working habits of Games stakeholders. In order to
take advantage of the evolution in core and off-the-shelf technology services,
a change in the Games technology operational model should be considered. This
would involve a review of the levels of service being delivered by … technology
partners. Overall, the measures proposed … will reduce the scale, costs and
complexity of the global Games technology delivery model.[60]
Potential
impact of the ‘New Norm’ changes?
In the 2020 research
paper, mentioned earlier in relation to Olympic costs, the authors suggest
a number of reasons why the ‘New Norm’ changes may be insufficient to avoid
potential or actual cost overruns.[61]
Table 4 outlines six drivers behind cost overruns at the Games
which are identified in the research paper.
Driver
|
Explanation
|
Irreversibility
|
Unlike other investment
projects host cities find it difficult to abandon the Games even if it would be a rational decision
to do so.[62]
Hosting
the Games is a difficult decision to reverse. When the scope and costs begin
to escalate hosts generally do not have the option of walking away, as they
do with most other investments, even if they think this would be the best
course of action.
|
Fixed time schedules
|
It is not possible to
reduce costs by extending the time of the project schedule.[63]
For other types of
investment projects, trading off budget against timing is common, and is
often an effective mechanism to dampen cost escalation. This mechanism is not
available to the Games, since timing cannot be moved, except in extreme
circumstances.
|
Misaligned incentives
|
The IOC has no incentive to reduce costs because the host is
legally bound to cover cost overruns (sometimes known as the ‘Blank Cheque
Syndrome’).[64]
The host takes on all the
cost risk. The IOC makes its profit from higher revenues, so if more host
spending leads to improved revenues this is a positive for the IOC,
irrespective of the cost to the host. The incentives of the IOC and hosts to
keep costs down are not aligned.
|
Tight coupling
|
The size, structure and
quality of the project are often strictly defined by the requirements of the
sports, leaving little or no room for cost-reducing changes.[65]
These non-negotiable
constraints set the Olympics apart from more conventional projects where
trade-offs between budget, schedule, scope, and quality have wider margins.
|
Long planning horizons
|
The long planning horizon increases the risk of negative
impacts from random events and changes in the business cycle.[66]
The
longer the duration, the larger the window, and the greater the risk of an adverse
event occurring which impacts the Games. This could include security/terrorist
threats, labour strikes, transportation breakdowns and natural catastrophes.
Cities and nations
typically bid for the Games when the economy is buoyant, with the consequence
that the business cycle has reversed when the opening date arrives seven to
eleven years later.
|
‘Eternal beginner
syndrome’[67]
|
As the host changes for
each Olympic Games, they are often inexperienced in managing projects of this
size and complexity.[68]
|
Source: B Flyvbjerg, A Budzier and D
Lunn, ‘Regression
to the tail: why the Olympics blow up’, Environment and Planning A:
Economy and Space, published online, 15 September 2020, pp. 10–13.
The authors also note that the ‘New Norm’ reforms may not
prevent prospective host cities from walking away from the bidding process when expected future costs—relative to expected future
benefits—appear to be excessive:
Cities have explicitly and vocally cited extravagant costs
and cost overruns as a main reason for exiting the bid process. With Agenda
2020 [and the New Norm initiative], which is being touted by the IOC as
protecting the interests of host cities, the IOC has made a first attempt to
address the exodus, and to protect its brand and product. But the [New Norm]
initiative though welcome, does not address the root causes and looks like too
little too late … Our guess is that more reform will prove necessary to stop
the exodus.[69]
Given the significant cost overruns in Tokyo 2021, noted earlier,
the endorsement of Olympic Agenda 2020 and the subsequent ‘New Norm’ changes were
announced too late to assist with reining in costs at these Games.[70]
Although, as per Recommendation 1 of Olympic
Agenda 2020, the Tokyo Organising Committee for the Olympic Games ‘was
encouraged to use more existing and temporary venues’ to generate US$2.2
billion in cost savings and ‘a number of requirements regarding transport,
energy, overlay and others were also modified’ presumably to generate further
cost savings.[71]
Brisbane’s
2032 Olympic Games bid
Despite the release of two evaluation reports, one in February 2020 and the
other in June
2021 (see the ‘impact study’), there is little publicly available detail on
the cost of a Brisbane Olympics—or more accurately, a South-East Queensland
Olympics.
On 11 February 2020, the Queensland Premier announced the release
of a 24-page Value
Proposition Assessment Executive Summary (VPAES).[72]
It is not clear why the Queensland Government did not publish the full report.
The VPAES does not provide a comparison of costs and benefits over any
specified timeframe to provide the reader with an indication of the ‘net
benefit’ to the community (be that Brisbane, South-East Queensland, Queensland
or Australia).
As noted by Queensland economist Gene Tunny:
I suspect it didn’t publish the full report because it would
raise too many questions about the merits of the Olympic bid. The [VPAES] report
does not provide any tabulations of expected costs, both operational and
capital costs, to compare with expected benefits. The government hasn’t shown
its calculations or its underlying assumptions supporting its confidence the
Olympics will be a net positive for the state.
… It’s clear that the state government committed to bidding
for the Olympics without having a firm idea what it would ultimately cost
Queensland taxpayers. Anyone who has seen how investment decisions are made in
private sector companies would be appalled by this lack of feasibility analysis
and due diligence.[73]
Expected costs of hosting the Brisbane Games
Costs for hosting the Olympic Games fall into three main categories:
- operational costs (‘Organising Committee for the Olympic Games
costs’ or ‘OCOG costs’)—incurred by the Organising Committee for the purpose of
staging the Games. These include workforce, technology, transportation,
administration, security, catering, ceremonies and medical services
- direct capital costs (‘non-OCOG direct costs’)—incurred by the
host city or country or private investors to build the competition venues,
Olympic village(s), international broadcast centre, and media and press centre,
and which are required to host the Games
- indirect capital costs (‘non-OCOG indirect costs’)—for example,
road, rail or airport infrastructure, or hotel upgrades or other business
investment incurred in preparation for the Games but not directly related to
staging the Games.
Operational
costs
The VPAES claims that OCOG costs will be completely offset
by IOC contributions and OCOG revenues:
The OCOG revenues include contributions from the IOC
(approximately USD 1.8 billion) related to Broadcast Agreements and The Olympic
Partners program, domestic sponsors, licensing and merchandising and ticket
sales.
Based on current forecasts, the OCOG budget of $4.45 billion
to deliver the Olympic and Paralympic Games is expected to be cost neutral and
at no cost to the Queensland Government.[74]
According to a recent media report, these operational
costs have already increased by 30 per cent since the VPAES was published—from
$4.45 billion to $5.8 billion.[75]
Capital
costs
However, no information was provided in the VPAES on the
expected magnitude of non-OCOG direct and non-OCOG indirect costs:
The non-OCOG costs for the 2032 Games will include:
- State Government services (planning and delivery)
- Games legacy venues (Games induced venues) and villages
- Legacy and festival programs [that are tailored to individual regions to
meet priority local needs and deliver on regional strategic objectives].
Costs associated with the non-OCOG budget continue to be
assessed.[76]
These non-OCOG costs include the capital costs for up to seven
new venues according to the IOC’s
feasibility assessment,[77]
although the Olympic Stadium will now be part of a ‘redeveloped’ Gabba at a
cost of $1 billion.[78]
To avoid ‘white elephants’, any new infrastructure built for
the Brisbane Olympics should continue to be utilised in a commercial manner after
the Games: it will continue to cost money to maintain, secure and operate. The ‘Bird’s
Nest’ in Beijing may be the best known white elephant in the recent history of
the Olympic Games: it served as the Olympic Stadium for the 2008 Beijing Games,
cost a reported US$428 million to build and had a capacity of 90,000 people. It
now costs over US$10 million a year to maintain, hosts only occasional events,
and largely serves as a tourist stop for visitors to Beijing.[79]
As with nearly all Olympic Games, it is expected that the
capital costs for the Brisbane Olympics will be mainly (or fully) funded by the
public sector. Recent media reports suggest that the Australian Government and
the Queensland Government have agreed to share these forthcoming capital costs
equally in a ‘50–50 infrastructure funding split’.[80]
This is a much greater funding commitment by the Australian Government than
occurred for the Sydney Games in 2000.[81]
The Australian Government and the Queensland Government will
also establish a joint Olympic Infrastructure Agency that will have ‘full
oversight of all projects from the planning, scoping and design phase through
to contracting, construction and delivery’. According to Mr Ted O’Brien MP, the
Prime Minister’s Olympics representative, the joint body would ensure only
infrastructure crucial to the delivery of the Games would receive funding.[82]
The Olympic Infrastructure Agency will have the difficult
task of identifying and balancing numerous (and sometimes conflicting)
interests and objectives across community groups, businesses and governments to
achieve the best outcome for the overall community. A rather jaundiced view was
expressed by one researcher summarising his experience of cities hosting mega sporting
events:
In either democratic or authoritarian countries, the tendency
is for event planning to hew closely to the interests of the local business
elite. Construction companies, their unions, insurance companies, architectural
firms, media companies, investment bankers, lawyers, and perhaps some hotel or
restaurant interests get behind the Olympic or World Cup project. All stand to
gain handsomely from the massive public funding. Typically, these interests
hijack the local organising committee, hire an obliging consulting firm to
conduct an ersatz economic impact study, understate the costs, overstate the
revenues, and go on to procure political consent.[83]
Indirect capital costs are often higher than direct
capital costs for the Olympic Games. For example, recent research on sport and
general infrastructure costs for summer Olympic Games found that the former outweighed
the latter, often considerably.[84]
The cost of general infrastructure for the 1992 Barcelona Olympic Games was
eight times that of sports’ infrastructure. On the other hand, for Sydney 2000,
the cost of general infrastructure was only marginally higher.
According to the Venue Masterplan (see p. 20 of the IOC
Feasibility Assessment) the proposal for the Brisbane Olympics focuses on
three clusters:
- Brisbane – main cluster with 21 venues
- Gold Coast – six venues (excluding football preliminary venues), 65km
from Brisbane and
- Sunshine Coast – three venues (excluding football preliminary
venues), 85km from Brisbane.
A noted US sports economist has questioned whether the general
transportation infrastructure necessary to provide smooth movement between these
three clusters will be consistent with South-East Queensland’s longer-term
planning and development needs:
"Although they call it a Brisbane
cluster, it's not really a cluster. The venues are all over the place,"
Andrew Zimbalist, from Smith College in Massachusetts, told 7.30.
"That means you have to build connecting transportation,
and whether you do that in ways that are beneficial to the city's needs or are
just beneficial to the need to connect venues is an important question."[85]
However, the IOC
Feasibility Assessment indicates that ‘good and mature’ public transport
and traffic management infrastructure used for the Gold Coast Commonwealth
Games in 2018 is already in place. Moreover, as South-East Queensland is
already facing strong population growth, major upgrades and the expansion of
public transport infrastructure are already planned—so it seems likely that at
least some of these costs may not be included in the indirect capital costs of
the Games because they would have occurred irrespective of whether Brisbane was
hosting the 2032 Games.[86]
Brisbane’s Final
Submission in response to the IOC’s Future Host Questionnaire in May 2021
provided some further information on transport infrastructure planning in
South-East Queensland:
By 2032 the transport corridors connecting the three Games
zones (Brisbane, Gold Coast and Sunshine Coast) will have increased road and
rail capacity and connectivity. For example, the Cross River Rail project,
currently under development, and other planned upgrades will unlock the
bottleneck at the heart of the rail network resulting in system-wide capacity
increase of more than 50 000 passengers per hour per direction. As a result of
the road and public transport enhancements, Games Family, as well as spectators
and workforce, will enjoy comfortable travel times and service levels.[87]
Figure 3 displays the transport modes to be used between
the venue clusters and precincts in 2032. According to the Final
Submission, within the three zones, the transport plan for each cluster,
precinct and venue has been developed to provide appropriate access.
Figure 3: Transport modes between the venue clusters and precincts in 2032
Source: IOC, IOC
Future Host Commission questionnaire response, Final submission, May
2021, p. 24.
The longer-term ‘legacy’ returns of any augmented transportation
infrastructure undertaken for the Brisbane Games will be one of the key factors
in determining the extent of ‘net benefits’[88]
generated from hosting the Games.[89]
Expected
benefits of hosting the Brisbane Games
The VPAES was more specific on estimated benefits (albeit
without providing the assumptions and methodology on which the headline results
are based):
The preliminary analysis has determined the estimated
benefits of the 2032 Games could be $7.4 billion (excluding any assessment of
benefits or costs associated with transport infrastructure). This excludes the
considerable benefits that are currently not able to be quantified.
Quantifiable benefits include but are not limited to an uplift in tourism,
trade and jobs.
Induced Tourism
TEQ [Tourism and Events Queensland] undertook an assessment
of the potential uplift the 2032 Games could deliver Queensland and estimates
the 2032 Games would generate an additional $20.2 billion in international overnight
visitor expenditure (OVE) for the period 2020 to 2036. TEQ also estimates the
2032 Games would generate an additional $3.6 billion in domestic OVE (in real
terms) in the year of and the year preceding the 2032 Games.
Trade
TIQ [Trade and Investment Queensland] undertook an assessment
of the potential uplift the 2032 Games could deliver Queensland and estimates
that Queensland could witness a Games-induced uplift in trade exports of up to
$8.63 billion in the ten years leading up to and the ten years following the
2032 Olympic Games.
Jobs
A mega-event such as the Olympic and Paralympic Games will
benefit Queensland with long term impacts on jobs across multiple sectors. It
is anticipated the Games will support approximately 130,000 direct jobs
consisting of:
- an average of 5000 sustained jobs per year, in the 10 years
leading up to the Games creating significant tourism and construction job
opportunities
- a peak of 115,000 jobs during Games year to support the
planning and delivery of the Games
- over 10,000 sustained jobs for at least three years post
Games resulting from increased visitation to Queensland.
In addition to direct jobs, there will be tens of thousands
of indirect jobs supported by the Games including over 10,000 tourism induced
jobs in the Games year alone …[90]
… In addition, there are a range of qualitative social and
community benefits that the Games could deliver over a potential two-decade
window of opportunity.[91]
Recalling the Sydney Olympics experience discussed
earlier, some of these benefits might prove elusive if economic activity
associated with the Olympic Games—such as venue construction, event
organisation and sports tourism—merely act to displace employment in other
economic activities; and if, for example, the tourism legacy benefits do not
eventuate because South-East Queensland is already a well-known tourism
destination.
The VPAES also suggested that the Brisbane Games would
deliver a range of (unquantified) social benefits. These are listed below:
Business and government networks (business-to-business
outcomes, government international relations, diplomacy and public-private
partnerships).
Education and skills (upskilling residents, attracting a
skilled workforce and developing a skill legacy).
Volunteers (individual short and long-term benefits,
community short and long-term benefits and enhanced skills and capabilities).
Social cohesion and pride (residents' attitudes to their
local area, shared image of city and community, primary networks at a communal
level, inclusiveness of communities and institutions, trust in government and
quality of life).
Improved health outcomes through increased uptake of sport
and recreation opportunities, active and public transport use, improved
liveability of communities and improved mental health through greater
participation, social cohesion and community connectedness.
Inclusion and diversity (inclusion and tolerance of
diversity, interest in different cultures, access to education, opportunities
for employment).
Destination branding (awareness of city or country as tourist
destination and amenity enhancements).
Disaster preparedness (measures taken to prevent, prepare for
and reduce the effects of natural and man-made disasters).
Environmental sustainability (sustainability measures and
environmental awareness).
Sport and athletes (elite sporting pathways, sports
participation, health impacts, sports diplomacy and integrity in sport).
Accessible tourism (whether tourist destinations, products,
services and experiences are accessible to all people, regardless of their
physical limitations, disabilities or age).[92]
In regard to sports participation, there is no reliable
international evidence that indicates the Olympic Games raises sport
participation levels for a host country.[93]
For the Sydney Games in 2000, international researchers suggest there is ‘mixed
evidence’:
LERI (2007) noted that Haynes (2001) suggested anecdotal
reports from the media of large post-Games increases in interest and
participation in Olympic sports, but that Cashman (2006) showed that, in
relation to recreational swimming at least, attendances in Sydney were static
or slightly falling in the two to three years following the Games. For
participation across Australia as a whole, Veal’s (2003) quantitative study
showed post-Games increases in participation in seven Olympic sports, declines
in nine others, and a general increase in recreational and non-Olympic
activities. Murphy and Bauman (2007), in their systematic review of public
health initiatives, suggested that there was no evidence from Sydney that the
euphoria of the Games turned into increased activity afterwards, despite a
great deal of ‘rhetoric’.[94]
The Australian research is also inconclusive, with
non-Olympic sports witnessing stronger increases in adult participation than
Olympic sports following the Sydney Olympics:
The analysis of the Sydney 2000 Olympic Games suggests that
there may have been a positive effect on adult sports participation overall
but, curiously, non-Olympic sports rather than Olympic sports experienced
stronger increases. For children, Olympic sports did better, lending some
support to the idea that the Olympic Games may be effective in inspiring young
people to take up sport.[95]
VPAES
summary of costs and benefits
Table 5 provides a summary of the costs and benefits of
hosting the Brisbane Olympic Games drawn from the VPAES. The information
provided is insufficient to draw any conclusions as to whether the Games are
likely to provide a net benefit to the community.
Table 5: VPAES summary of costs and benefits of hosting
the Brisbane Olympic Games 2032
Costs |
$A Billion |
Operational costs |
4.45 |
Direct capital costs |
Unquantified |
Indirect capital costs |
Unquantified |
|
|
Benefits |
|
Induced tourism |
20.20 (from 2020 to 2036) |
Trade |
8.63 (from 2022 to 2042) |
Social benefits |
Unquantified |
Source: Queensland Government, 2032
Olympic and Paralympic Games, Value Proposition Assessment, Executive Summary,
2019.
Supplementary
KPMG benefit analysis
Following the IOC announcement in February 2021 that
Brisbane had preferred bid status, economic consultant KPMG was engaged by the
Queensland Department of Tourism, Innovation and Sport to update and refine the
analysis of benefits contained in the VPAES to reflect new information (for
example, changes to the Games Masterplan) and to consider any potential impacts
of COVID-19 on the analysis.[96]
Perhaps surprisingly, KPMG did not provide any updates to the cost information
provided in the earlier VPAES, so there is still limited clarity as to whether
the Games are in the community interest.
Table 6 from the KPMG
summary report, released by the IOC on 10 June 2021 (see the impact
study), presents a summary of the quantified benefits, for the 20 year
period 2022 to 2042.
The estimated impact of the new expenditures from the Games
is also projected to result in the creation of approximately 122,900 job years
at a national level and approximately 91,600 job years in Queensland over the
20 year evaluation period.
Table 6: KPMG summary of potential quantifiable benefits
($A billion)
|
Queensland
|
Australia
|
Economic benefits
|
4.60
|
8.50
|
Social benefits
|
3.50
|
9.11
|
Total quantifiable economic and social benefits
|
8.10
|
17.61
|
Source: KPMG, Brisbane
2032 Olympic and Paralympic Games, Preliminary economic, social and
environmental analysis, Summary report, on behalf of [Qld} Department of
Tourism, Innovation and Sport, June 2021, p. 23.
An infographic taken from the KPMG summary report of the
potential benefits of a Brisbane Games is provided below (Figure 4).
A number of technical criticisms can be made of the aggregated
benefit estimates in the KPMG
summary report, including:
- limited consideration of the ‘base case’ scenario (p. 4), that
is, what would have happened to the quantifiable benefits in the absence of
hosting the Games—making it difficult to observe the incremental benefits from
hosting the Games in the analysis.
- quantification of benefits based on (unknown) secondary sources
(p. 14). Economists can use a number of techniques to value benefits,
particularly intangible benefits, that have no observed market prices (for
example, community spirit and civic pride). But these valuation techniques can
be difficult, expensive and time consuming to implement. To overcome these
constraints (to conducting an original study) KPMG have used ‘plug in’ values
from previous studies conducted elsewhere (sometimes known as ‘benefit
transfer’ or using ‘secondary sources’). While transferring benefit information
from secondary sources can provide a quick, low cost approach they should be
treated cautiously as any technical weaknesses in the studies may result in
bias—making these benefit estimates highly uncertain
- provision of higher bound estimates only for the non-market
benefits (that is, the social benefits) rather than including both central and
lower bound estimates (p. 23). When conducting sensitivity analysis the central
estimate assigns the most plausible values to the variables in the analysis to
produce an estimate of benefits that is thought to be most representative. The
lower bound estimate assigns the least favourable of the plausible range of
values to the variables. The higher bound estimate assigns the most favourable
of the plausible range of values to the variables. By using only the higher
bound estimate KPMG is providing the best case scenario, making these benefit
estimates appear overly optimistic
- no discounting of future benefits (p. 23)—due to the uncertainty
of the timing of the benefits, KPMG has not specified what the value of
benefits will be in each year between 2022 and 2042. As a consequence, KPMG
does not discount the future benefits, using a ‘discount rate’, thereby preventing
the yearly benefits from being compared in a common metric—that is, their
present value. This is important because individuals prefer a dollar today to a
dollar in the future (that is why banks need to pay interest to entice
individuals to forgo current spending). For example, the present value of $100
to be received in 2022 is usually much higher than the present value of $100
to be received in 2042—the difference in their present values will depend on
the magnitude of the discount rate chosen. By not discounting the future
benefits the benefit estimates in Table 6 are higher than they would be in today’s
dollars (that is, their present value).
- no transparent disaggregation of the quantified economic benefits
(that is, induced tourism benefits and induced trade benefits) and quantified social
benefits (that is, resident benefits, health benefits and volunteering benefits)
into their individual components (p. 23). While these individual benefit
components are discussed in chapters three and four of the KPMG summary report,
no analysis is provided for how the aggregated totals of economic and social
benefits in Table 6 are determined—making these quantified benefit estimates
effectively unverifiable. There is also no provision of the specific
assumptions, methodology used, and calculations generated for each of the
individual components comprising the aggregate economic and social benefit
values.
- no sensitivity analysis is provided that shows how sensitive the
estimated benefits are to different values of uncertain variables and to
changes in assumptions—making it difficult to validate the robustness of the
benefit estimates.[97]
Beyond these technical limitations, almost half the
estimated benefits to Queensland (and over half the estimated benefits to
Australia) are generated by intangible social benefits that are inherently
difficult to quantify with any measure of certainty, including:
- resident benefits—hosting the Games is assumed to deliver intangible
benefits to Australian residents that are associated with legacy, community
spirit, prestige and civic pride
- health benefits—hosting the Games is assumed to deliver an
increase in participation in physical activity across Queensland and the nation
which in turn is anticipated to result in a lowering of risk of chronic
diseases, improving mental health outcomes and enhancing productivity for
Queenslanders and Australians
- volunteering benefits—hosting the Games is assumed to deliver
benefits to volunteers (such as self-improvement and altruistic value) and also
to the broader community (such as the increased likelihood of future
volunteering and the wage costs avoided because of the activities undertaken by
volunteers in support of the Games).[98]
The KPMG analysis estimates that economic benefits,
resulting from a Games-induced uplift in international tourism and trade, are
in the order of $4.6 billion for Queensland and $8.5 billion for
Australia—notably, the KPMG economic benefits estimate for Queensland is more
conservative than the VPAES (albeit using different timeframes for
international tourism, with VPAES using 2020–2036 rather than 2022–2042).
However, since there is no evident reconciliation between the VPAES and KPMG
reports or detailed disaggregation of the economic benefits, it is impossible
to assess the likelihood of achieving the predicted benefits to international
tourism or trade.
Figure 4: Potential benefits of a 2032 Brisbane Olympic Games
Source: KPMG, Brisbane
2032 Olympic and Paralympic Games, Preliminary economic, social and
environmental analysis, Summary report, on behalf of [Qld} Department
of Tourism, Innovation and Sport, June 2021, p. iii.
KPMG notes that a degree of uncertainty surrounds the economic
benefit estimates and acknowledges that:
- ‘findings in the literature are mixed about the size of the
estimated tourism legacy benefits and the ability of major events to induce
international tourism’
- there is a ‘gap between research finding relating to anticipated
tourism impacts of future major events and research findings relating to the
realised tourism impact of major events that have been previously held’ and
- ‘the mechanisms through which mega-events, such as the Games, can
boost trade are usually not well-defined’.[99]
KPMG did not consider that COVID19 would create a ‘material’
risk of adverse impacts on Games-induced tourism:
The COVID-19 pandemic has raised risks that have the
potential to reduce the induced tourism impact of the Games. However, these
risks are unlikely to be material as they are mitigated by Queensland’s, and
Australia’s response to the COVID-19 pandemic.[100]
Similarly, it did not assess the impact of COVID-19 on
Games-induced trade to be of any lasting concern:
The pre-COVID-19 baseline projections for trade by TIQ [Trade
and Investment Queensland] remain valid in the medium to longer-term. Trade has
been negatively affected due to COVID-19, but most economies have bounced back
strongly and are expected to consolidate their recovery over the next two
years, underpinned by the roll-out of vaccination programs. The assessment is
that globalisation will not be stalled and a reversion to protectionist will be
resisted.[101]
Perhaps of greatest concern, the KPMG
analysis does not address likely costs of the Games to the Queensland and
Australian communities. That is, KPMG only quantifies benefits, so it does not
provide a balanced assessment of the economic and social impacts on communities
of hosting the Games. Nevertheless, KPMG concludes that the benefits of
Brisbane hosting the 2032 Games will outweigh the costs:
The focus of this report is on the economic and social benefits
of a 2032 Games. Delivery of the 2032 Games will entail disbenefits in the form
of economic opportunity costs associated with operations and legacy
infrastructure. Preliminary analysis indicates that the economic and social
benefits of hosting the 2032 games outweigh the disbenefits [costs].[102]
However, the absence of an analysis of costs makes it
difficult to be confident there is likely to be such a ‘net benefit’ to the
community from hosting the Games.
Better Games
management
Despite the IOC’s ‘New Norm’ changes to Games governance,
hosting requirements and support to organisers, the six main drivers of cost
overruns (see Table 2) have yet to be adequately addressed. In light of this, the
2020 Oxford
research paper put forward six additional steps for better Games management:
- an acknowledgement by the IOC and potential hosts that hosting
the Olympic Games is an extremely risky business and therefore an independent
review of cost forecasts is essential
Today, there is some understanding of
risk with the IOC and hosts, but nothing that reflects the real risks. Instead
of extreme randomness, the IOC assumes low randomness when it states that a 9.1
percent contingency for unanticipated expenses is in line with the level of
risk for previous Games … This number is glaringly insufficient when compared
with actual cost overrun in the most recent Games … Either the IOC is deluded
about the real cost risk when it insists that a 9.1 percent contingency is
sufficient, or the Committee deliberately overlooks the uncomfortable facts ...
Independent review of any cost and contingency forecast is therefore a must,
including for estimates from the IOC.[103]
- larger cost contingencies are needed
… to produce a significantly more realistic estimate of the
necessary cost contingencies for the Olympics than the numbers put forward by
the IOC. More realistic contingencies would have the additional advantage of
softening the tight constraints … which in turn would help drive down cost
blowouts and costs[104]
- the IOC should hold some of the cost risk from staging the Games
The IOC sets the agenda, defines the specs, and has ultimate
decision-making power over the Games. Nevertheless, the IOC holds none of the
cost risk involved. As a result there is little alignment between incentives to
keep costs down and making decisions about cost, which is one reason costs
explode at the Games, and will keep exploding. … we suggest the IOC is made to
cover from its own funds minimum 10 percent of any cost overrun for the Games,
to be paid on an annual basis as overruns happen. This would give the IOC the
motivation it lacks today to effectively manage costs down[105]
- the seven-year delivery phase for the Olympic Games should be
shortened
The longer the delivery, the higher the risk, other things being
equal. … Faster delivery may be supported by a more standardized and
modularized approach to delivery, without the need to reinvent the wheel at
every Games, and by using existing facilities as much as possible. …
Standardized turnkey solutions should be developed as far as possible to help
hosts reduce costs[106]
- the location of the Olympic Games and the delivery authority
should have greater permanency to curtail the ‘eternal beginner syndrome’
… proposals have been put forward to host the Games in one or
a few permanent locations – e.g., Athens – or, alternatively, that two
successive Games should be given to the same host, so facilities could be used
twice. … Games could be spread geographically with different events going to
different cities, but with each event having a more or less permanent home …
This could be combined with a permanent and professional delivery authority,
responsible for staging the Games every time and accumulating experience in one
place in order to secure effective learning and build what has been called a
"high-reliability organization" for delivering the Games[107]
- prospective host cities should walk away from the bid process if
the financial risks become too great
Indeed, this has become a preferred strategy for many cities.
Over the past 20 years the number of applicant and candidate cities have fallen
drastically, from a dozen to a few. … For the 2022 Winter Olympics, the IOC
ended up with just two potential hosts … For the 2024 Summer Olympics the same
happened ... To protect itself from further humiliation with the 2028 Summer
Games, the IOC broke precedent and selected the next two Summer Games hosts
simultaneously by negotiating a deal with Paris and Los Angeles, according to
which Paris would win the bid for the 2024 Games and the 2028 Games would go to
Los Angeles without a bid round. Finally, for the 2026 Winter Olympics the IOC
had to extend the invitation phase after no city had bid for the Games well
into 2017.[108]
Given Brisbane is now confirmed as the host of the 2032 Games
these proposals are redundant. However, the six steps to
better Games management should be studied by any prospective host government
that is yet to fully commit to hosting the Olympic Games.
Perhaps in the longer term, judgements about which prospective
host city is best placed to reap the ‘legacy benefits’ of the Olympic Games may
require the establishment of an independent panel to assist the IOC, as
suggested in a New
York Times (NYT) article:
The Games cost too much, and host populations derive
insufficient benefit because Olympic development is often disconnected from
city and regional planning. The I.O.C. should create an independent body
comprising respected sports economists, urban planners and political scholars
who can objectively assess whether bids’ construction plans fulfill long-view
development strategies.
The Olympic Charter already allows for outside experts to
assist with evaluating bids. This panel — let’s call it the Independent Bid
Review Board — would meticulously analyze host cities’ filings and make
recommendations to the I.O.C.’s key decision-making body, the Evaluation
Commission.[109]
Moreover, the author of this NYT article also recommends that
IOC member voting records should be transparent (although a moot point in
circumstances where there is only one contender):
IOC members are notoriously capricious, ignoring technical
reports and voting for the bid with the shiniest promises. The IOC should
publish the records of voting members, so that there’s transparency about who
is siding with the expert evidence and who is not.[110]
Conclusion
The history from
cities that have hosted Olympic Games suggests a common tendency for overly
optimistic estimates of the benefits, and underestimation of the significant
direct and indirect costs, which has frequently resulted in large cost
overruns. These cost overruns can have fiscal implications for years into the
future: for example, Montreal took 30 years to pay off the debt incurred by the
720 per cent cost overrun on the 1976 Olympic Games. Cost overruns and
associated debt from the Athens 2004 Olympics weakened the Greek economy and may
have contributed to the country's deep financial and economic crises for the
next decade.[111]
The experience of these and many other
host cities suggests that Australian decision makers should be alive to the
risks of optimism bias. In this context, and even applying the ‘New Norm’
changes, with limited cost information available and contestable benefit
estimates there remains considerable uncertainty as to whether the benefits of the
Brisbane Olympics in 2032 will outweigh the costs to the community. Given the substantial costs involved, prospective host
governments should ensure a rigorous and critical assessment of costs, benefits
and risks before committing to host the Olympic Games.
[1]. Many thanks to
my colleague Liz Wakerly for her helpful comments and suggestions on this
paper.
[2]. International
Olympic Committee (IOC), ‘Brisbane
and AOC invited to targeted dialogue for the Olympic Games 2032’, IOC
website, 24 February 2021, accessed 1 April 2021.
[3]. The IOC did not
confirm rival bidders, but interest is thought to have come from places such as
Doha, Budapest, Istanbul, China’s Chengdu and Chongqing, and Jakarta. See T
Holmes, ‘Brisbane’s
bid for 2032 Olympic Games firms as it becomes last city left in negotiations’,
ABC News, 24 February 2021.
[4]. IOC, ‘IOC
Executive Board puts forward Brisbane 2032 for election by IOC Session’,
IOC website, 10 June 2021, accessed 12 June 2021.
[5]. IOC, ‘IOC
elects Brisbane 2032 as Olympic and Paralympic host’, IOC website, 21 July
2021, accessed 14 October 2021.
[6]. IOC, ‘Brisbane
and AOC invited to targeted dialogue for the Olympic Games 2032’, op. cit.
[7]. See ‘Future
Host Commissions – Terms of Reference’ for more information on their
mandate within the IOC governance framework.
[8].
IOC, ‘Brisbane
and AOC invited to targeted dialogue for the Olympic Games 2032’, op. cit.
[9]. Ibid.
[10]. P McCutcheon, ‘Would
the Olympic Games be an economic bonanza for Queensland?’, ABC website,
accessed 28 April 2021.
[11]. A Zimbalist, Circus
Maximus, The economic gamble behind hosting the Olympic Games and the World Cup,
Brookings Institution Press, Washington DC, 2016 (2nd edn), p. 127.
[12]. Ibid., pp.
20–21 and p. 129.
[13]. Ibid., p. 76
[14]. Ibid., p. 144.
[15]. For a
discussion of the issues see: A Zimbalist, ibid.,
pp. 35–43.
[16]. J McBride, ‘The economics
of hosting the Olympic Games’, Backgrounder,
Council on Foreign Relations, last update 19 January 2018.
[17]. United Kingdom,
Department for Culture, Media & Sport, Report
5: Post-Games Evaluation – Meta-Evaluation of the Impacts and Legacy of the
London 2012 Olympic Games and Paralympic Game, Summary Report, July
2013, p. 18.
[18]. J Carlini and A
O’Neil, Business
and the Gold Coast 2018 Commonwealth Games: Expectations, outcomes and the
future, Griffith University, Griffith Business School, June 2019, p. 4.
[19]. These six dot
points are all discussed in R Baumann and V Matheson, ‘Infrastructure
investments and mega-sports events: comparing the experience of developing and industrialized
countries’, College
of the Holy Cross, Department of Economics Faculty Research Series, Paper No.
13-05, August 2013, pp. 7–14.
[20]. Ibid., p. 21.
[21]. A Feddersen and
W Maennig, ‘Employment
effects of the Olympic Games in Atlanta 1996 reconsidered’,
International Journal of Sport Finance, 2013, 8, pp. 95–111.
[22]. W Maennig and F
Richter, ‘Exports
and Olympic Games: Is there a signal effect?’, Journal of Sports
Economics, 13, No. 6, 16 August 2012, pp. 635–641.
[23]. S Billings and
S Holladay, ‘Should
cities go for the gold? The long-term impacts of hosting the Olympics’, Economic
Inquiry, Vol. 50, No.3, July 2012, pp. 754–772.
[24]. R Baumann, B
Engelhardt and V Matheson, ‘The
labor market effects of the Salt Lake City Winter Olympics’, College of the Holy Cross, Department of Economics
Faculty Research Series, Paper No. 10-02, May 2010.
[25]. A Rose and M
Spiegel, ‘The
Olympic Effect’, National Bureau of
Economic Research, Working Paper No. 14854, April 2009.
[26]. B Flyvbjerg, A Budzier and D Lunn, ‘Regression to
the tail: why the Olympics blow up’, Environment and Planning A: Economy
and Space, published online, 15 September 2020.
[27]. Non-sports
related capital costs such as road, rail, airport, hotel and other
infrastructure are not included.
[28]. All dollar
figures are US 2015 dollars.
[29]. B Flyvbjerg, A
Budzier and D Lunn, op. cit., p. 3.
[30]. Ibid.
[31]. M Bleby, ’No
cost blowout on Queensland 2032 Olympics, Coates vows’, Australian
Financial Review, (online edition), 15 September 2020.
[32]. D Owen, ‘Academic
paper calls for IOC to have "skin in the game" on Olympic cost
overruns’, Inside the Games website, 9 September 2020, accessed 29 April
2021.
[33]. A Nygaard and
CG Nielsen, ‘The
unpredictable financial costs of hosting the Olympic Games’, Play the Game
website, 23 February 2021, accessed 29 April 2021.
[34]. J McBride, ‘The economics
of hosting the Olympic Games’, op.
cit.
[35]. Gov.UK, ‘London
2012 meta-evaluation’, published 19 July 2013.
[36]. N McCullough, ‘The
economic legacy of the London Olympic Games’, Hitachi Research Institute,
August 2015, p. 36.
[37]. A Shapiro, ‘Did
London get an economic boost from the 2012 Olympics?’, NPR, 3
February 2014.
[38]. Ibid.
[39]. J Giesecke and J Madden, The Sydney Olympics
seven years on: An ex-post dynamic CGE assessment, Centre of Policy
Studies, Monash University, General Paper G-168, September 2007.
[40]. While not
without weaknesses, CGE models are superior to earlier static input-output (I/O)
models since they incorporate dynamic techniques that reduce the risk of
overestimation of economic impacts. For further information see M Clark, Whole-of-economy
modelling: beyond the black box, Staff research paper, Queensland
Productivity Commission, April 2018.
[41]. J Giesecke and
J Madden, op. cit., p. 5.
[42]. European Tour
Operators Association, Olympic
Report, 2006, p. 14.
[43]. J Giesecke and
J Madden, op. cit., p. 10.
[44]. J Madden and M
Crowe, The
economic impact of the Sydney Olympic Games, RePEc, January 1998.
[45]. J Madden and J
Giesecke, ‘Hosting
the Olympics: cash cow or money pit?’, The Conversation, 26 July
2012.
[46]. Ibid.
[47]. Ibid.
[48]. European Tour
Operators Association, Olympic
Report, 2006, p. 15.
[49]. Ibid., p. 16.
[50]. International
Olympic Committee (IOC), Olympic
Games: the New Norm, Report by the Executive Steering Committee for
Olympic Games Delivery, PyeongChang, February 2018, p. 3.
[51]. Ibid.
[52]. IOC, ‘The New
Norm: It’s A Games Changer’, IOC website, accessed 6 April 2021.
[53]. Ibid.
[54]. Ibid.
[55]. A Palaszczuk
(Queensland Premier), State gives green
light to pursuing Games opportunity, media release, 9 December 2019.
[56]. IOC, ‘The New
Norm: It’s A Games Changer’, IOC website, op. cit.
[57]. IOC, Olympic
Games: the New Norm, op. cit., p. 10.
[58]. Ibid. Full
details of the basis for the financial calculations can be found in Annex 1 of
the Olympic
Games: the New Norm report.
[59]. Ibid., p. 48.
[60]. Ibid., p. 30.
[61]. B Flyvbjerg, A
Budzier and D Lunn, ‘Regression to
the tail: why the Olympics blow up’, Environment and Planning A: Economy
and Space, published online, 15 September 2020.
[62]. Ibid., p. 10.
[63]. Ibid.
[64]. Ibid., pp.
10–11.
[65]. Ibid., p. 11.
[66]. Ibid., pp.
11–12.
[67]. This should be
less of a concern for Brisbane and South East Queensland given the Gold Coast’s
recent experience of hosting the 2018 Commonwealth Games.
[68]. B Flyvbjerg, et
al, ‘Regression
to the tail: why the Olympics blow up’, op. cit., p. 13.
[69]. Ibid., p. 15.
[70]. The IOC
selected Tokyo in September 2013, Olympic Agenda 2020 was endorsed in December
2014 and the New Norm changes were released in February 2018.
[71]. IOC, Olympic
Games: the New Norm, op. cit., February 2018, p. 13.
[72]. A Palaszczuk
(Queensland Premier), Games
Jobs and Economic Benefits, media statement, 12 February 2020.
[73]. G Tunny, ‘More
work needed to show SEQ Olympics would stack up’, Queensland Economy Watch,
blog, 28 February 2021, accessed 14 April 2021.
[74]. Queensland Government, 2032
Olympic and Paralympic Games, Value Proposition Assessment, Executive Summary,
2019, p. 15.
[75]. M Bleby, ‘Brisbane
2032 Olympic host costs are already soaring’, Australian Financial
Review, 12 June 2021, p. 3.
[76]. Queensland
Government, 2032
Olympic and Paralympic Games, Value Proposition Assessment, Executive Summary,
op. cit., p. 16.
[77]. IOC, IOC
Feasibility Assessment - Olympic Games Brisbane, February 2021, p. 20.
[78]. J Marszalek, ‘Gabba
to get $1bn Olympic-sized transformation’, The Courier Mail (online
edition), 20 April 2021. While not brand new sports infrastructure, it appears that
the Gabba will be essentially demolished and rebuilt (L Lynch, ‘Gabba
to be ‘demolished’ in $1b Olympic Games facelift: Premier’, Brisbane
Times, (online edition), 20 April 2021).
[79]. O Gibson, ‘Bird’s
Nest stands as an empty monument to China’s magnificence’, The Guardian,
(online edition), 23 August 2015.
[80]. C Peel, ‘Scott
Morrison agrees to 50-50 Brisbane Olympics funding’, The Australian,
p. 3, 27 April 2021.
[81]. R Bogaards, ‘Brisbane
Olympic Games 2032’, Budget Review 2021–22, Research paper series,
4, 2021–22, Parliamentary Library, Canberra, May 2021, pp. 16–17.
[82]. Ibid.
[83]. A Zimbalist, Circus
Maximus, op. cit., pp. 130–131.
[84]. R Baade and V
Matheson, ‘Going
for the gold: the economics of the Olympics’, Journal of Economic
Perspectives, Vol. 30, No. 2, Spring 2016, p. 205.
[85]. P McCutcheon, ‘Would
the Olympic Games be an economic bonanza for Queensland?’, op. cit.
[86]. IOC, IOC
feasibility assessment – Olympic Games Brisbane, February 2021, p. 56.
[87]. IOC, IOC
Future Host Commission questionnaire response, Final submission, May
2021, p. 24.
[88]. A net benefit
is the sum of expected benefits minus the sum of expected costs over a defined
time horizon.
[89]. The term
‘legacy’ was introduced into the IOC vernacular after the 2000 Sydney Olympics
and has become a broad, encompassing concept that seeks to justify the large
costs of hosting the Olympic Games. See C Gaffney, ‘Between discourse and
reality: the un-sustainability of mega-event planning’, Sustainability,
No. 5, 16 September 2013, p. 3931.
[90]. Queensland
Government, op. cit., pp. 16–17.
[91]. Ibid., p. 19.
[92]. Ibid., p. 17.
[93]. M Weed et al., A
systematic review of the evidence base for developing a physical activity and
health legacy from the London 2012 Olympic and Paralympic Games, Centre for
Sport, Physical Education & Activity Research, February 2009.
[94]. M Weed et al.,
‘The Olympic Games and raising sports participation: a systematic review of
evidence and an interrogation of policy for a demonstration effect’, European
Sport Management Quarterly, Vol. 15, No. 2, p. 208.
[95]. AJ Veal et al.,
‘The
sport participation legacy of the Sydney 2000 Olympic Games and other
international sporting events hosted in Australia’, Journal of Policy
Research in Tourism, Leisure and Events, Vol. 4, No. 2, p. 175.
[96]. KPMG, Brisbane
2032 Olympic and Paralympic Games, Preliminary economic, social and
environmental analysis, Summary report, on behalf of [Qld} Department
of Tourism, Innovation and Sport, June 2021, p. 3.
[97]. Ibid., p. vii
and pp. 4–5.
[98]. Ibid., pp.
14–17.
[99]. Ibid., p. 9 and
p. 11.
[100]. Ibid., p. 11.
[101]. Ibid., p. 12.
[102]. Ibid., p. vi
[103]. B Flyvbjerg et al, ‘Regression to
the tail: why the Olympics blow up’, op. cit., pp. 13–14 .
[104]. Ibid., p. 14.
[105]. Ibid.
[106]. Ibid.
[107]. Ibid., p. 15
[108]. Ibid.
[109]. J Boykoff, ‘A
Bid for a Better Olympics’, The New York Times, (online edition), 13
August 2014.
[110]. Ibid.
[111]. B Flyvbjerg et
al, ‘Regression
to the tail: why the Olympics blow up’, op. cit., p. 6.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.
This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Entry Point for referral.