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Circus Maximus
Book

Circus Maximus

The Economic Gamble Behind Hosting the Olympics and the World Cup

Andrew Zimbalist
Brookings Institution Press, 2015
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Editorial Rating

8

Qualities

  • Innovative
  • Eye Opening
  • Well Structured

Recommendation

What happens to velodromes or rowing parks after the Olympic Games leave town? How do cities make use of soccer stadiums built for the World Cup? When cities and countries fall in love with the idea of hosting these giant events, they often overlook the harsh financial realities of such an undertaking. In fact, the International Olympic Committee and FIFA, soccer’s governing body, promise that the hosts of their sports extravaganzas will realize long-term economic and social benefits. In reality, cities such as Athens, Beijing and Sochi get stuck with enormous debt, unusable venues and infrastructure headaches. Sports economist and economics professor Andrew Zimbalist explains why hosting these huge sports events usually results in a political, social and economic nightmare. Through painstaking research, the author sheds critical light on a corrupt system aching for reform. While his style may be a touch dry, you’ll be fascinated and appalled by the dreadful waste of money, resources and manpower he reports, all in the name of fleeting prestige and glamorous sport. getAbstract recommends this eye-opening reportage to mayors, city councils, state and local government officials, sports authorities, community activists, and anyone concerned about the links between public spending and private profit.

Summary

Little Return on Investment

Competition to host the Olympic Games was virtually nonexistent until the success of the 1984 Summer Games in Los Angeles. The city made a modest $215 million profit for three primary reasons: The International Olympic Committee (IOC) promised to guarantee any financial losses; the city used existing venues; and Peter Ueberroth, head of the LA Organizing Committee, secured deals with corporate sponsors. Leaders of other cities and some countries have sought aggressively to host such events. Some cities spend $100 million just to put together a bid – and that pales in comparison to the costs of staging the massive event. Sochi’s 2014 Winter Games cost a reported $50 billion.

The cost of hosting FIFA’s World Cup every four years also has skyrocketed. In 1994, the United States spent several hundred million dollars to host the event. Brazil spent between $15 and $20 billion in 2014, and Qatar may invest upward of $200 billion in 2022. Promoters trumpet the financial benefits that the Olympics or World Cup confer on local economies, but evidence shows that their sales pitches ring hollow. The economic responsibilities of hosting pile extra difficulty...

About the Author

A professor of economics at Smith College, Andrew Zimbalist is an industry consultant. He also wrote Unpaid Professionals: Commercialism and Conflict in Big-Time College Sports.

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