How Tokyo's pandemic Olympics illustrate the cost of hosting the Games
When construction started on Tokyo's 15,000-seat Olympic aquatics center, Yui Ohashi was rebounding from a personal low: the discovery that anemia was making her sluggish in life and the pool. When Olympic swim races were staged there a year later than planned, she stood atop two podiums. Ohashi is an individual medley specialist, Japan's best, and she doubled up on gold last week at 200m and 400m.
Her second final in Tokyo was the 200m, which devotes one length of the pool to each stroke. Ohashi was in second place at the last turn, but once the race transitioned from breaststroke to freestyle, she shifted gears to overtake Alex Walsh, the favored American in the lane to her right. Ohashi sped to the wall in 2:08.52, 0.13 seconds faster than Walsh. She stuck out her tongue, pumped her fist, and waved a peace sign to swimmers in the stands.
Barred from the Olympic premises because of COVID-19, the Japanese public delighted in the circumstances of Ohashi's win - her comeback story, the boost to the national medal count - from their homes. In person, dozens of teammates and officials clapped and cheered from behind their face masks.
Ohashi dried off and returned to the pool deck to accept the gold. The Japanese flag was raised to the ceiling of the aquatics venue. For a moment, it might have felt like half a billion dollars well spent.
Crisis threatens to upend every Olympics: human rights abuses in Russia (Sochi), the Zika epidemic in Brazil (Rio), the risk of North Korea firing nukes (PyeongChang). The 2020 Olympics happened in 2021, which still wasn't late enough to outwait the coronavirus pandemic. Then the sports begin and the spotlight shifts to the athletes. Champions like Ohashi overcome tribulations, peak within the right two-week window, smile for the cameras, and are said to save the Games.
Every edition of the Olympics follows this pattern. Then, after the closing ceremony takes place Sunday, Olympians will scatter to all points of the globe, and Tokyo will start reckoning with the cost.
These Games went on as COVID-19 infections surged to unseen heights in Japan, where less than a third of the population is fully vaccinated. Tens of thousands of athletes, officials, and media personnel descended on Tokyo despite a state of emergency that shuttered dining and halted alcohol sales. The lack of spectators equates, roughly, to $820 million in lost ticket revenue for the organizing committee, said Smith College economist Andrew Zimbalist, who's written three books about the Olympics and their economics.
COVID-19 is a once-in-a-century ordeal, but it exacerbated the burdens that host cities always bear. Tokyo's host contract empowered the IOC to cancel the Olympics for safety reasons while leaving the city and organizers liable if the Games weren't held. Hosts also have to foot the bill. Before the pandemic, organizers said Tokyo 2020 would cost $12.6 billion to stage, which auditors contend was a big undercount. The final budget came in at $15.4 billion, but independent estimates suggest the ultimate price could approach or exceed $30 billion. The Associated Press reported that the IOC only contributed about $1.3 billion to the overall cost.
The aquatics venue alone was a $520-million expense. The pandemic eliminated one of the upsides of hosting; scant few people got to see Ohashi swim live. The downside of the enterprise, meanwhile, is still there.
"The Olympics are such a difficult beast to do right," said Alexander Budzier, a mega-projects researcher at the University of Oxford. "Host cities have zero control over the cost and the economics of the Games."
Overspending is an Olympic tradition, on Games as a whole - see the $50 billion that Russia shelled out for Sochi 2014 - and on so-called white elephants. The Council on Foreign Relations, a U.S. think tank, reports that Beijing spends $10 million annually to maintain the $460-million Bird's Nest stadium, which hasn't been used much since the Summer Games in 2008 (though the city will also host the 2022 Winter Olympics).
Like Sochi and Beijing, Tokyo followed a blueprint. Oxford research that Budzier co-authored found that every Olympics systematically runs over budget, by 172% on average since 1960. Host cities don't share knowledge about how to spend efficiently, Budzier said, and exercising restraint isn't really their call, anyway. The IOC establishes the scope of the project, deciding what sports will be contested and setting the deadline - the date of the opening ceremony - for the host to deliver.
"You can't as a host city say: 'Oh, sorry. We kind of ran out of budget. I don't think we're going to have swimming competitions this year,'" Budzier said.
"The only thing that can go up is cost."
Hosting expenses mounted for a few decades before this, but the trend spiked after the summer of 1984. That's when Los Angeles hosted the rare Olympics to turn a profit (of about $230 million).
Already a massive sports hub, L.A. only had to build two new Olympic facilities, for swimming and track cycling. When newly interested bidders overlooked this context, though, worldwide demand to host the Games sparked an arms race. Cities in developed and developing economies alike were urged to spend freely on venues, hotels, transportation infrastructure, and ceremonial space, tacking on the bells and whistles that bloat budgets.
"More and more cities were thrust into competition with each other," Zimbalist said. "They had to convince the IOC that their city was better than the other cities."
Some host cities buckled under the weight. Before L.A. ran its surplus, Montreal's 1976 Summer Games blew 720% over budget, the Oxford researchers found. Construction costs had spiraled. The provincial government took 30 years to pay off $1.5 billion of debt and the Olympic Stadium came to be called The Big Owe. Jean Drapeau, the mayor of Montreal, had claimed the Olympics could never run a deficit, just like a man could never give birth, so the political cartoonist Aislin drew him pregnant and phoning to arrange an abortion.
Athens and Rio had it worse. Greece slid into an economic crisis not long after the 2004 Olympics, for which water, beach, and field venues were built and then abandoned for more than a decade. Rio's 2016 Games were held during a recession, and Budzier and his fellow researchers found that cost overruns reached 352%. The city's Olympic Park fell into disuse, as did thousands of apartments in the athletes' village.
Despite decades of stagnancy, Japan's economy is valued at $5 trillion, meaning Tokyo's Olympic losses shouldn't be ruinous, Zimbalist said. But the consequent social discontent might prove tougher to shake. Japanese Prime Minister Yoshihide Suga has to stand for re-election this fall. Public support for his administration hit a record low the week before the Olympics began, Kyodo News polling showed.
In the months that led up to the Games, high-profile corporate sponsors, thousands of Japanese doctors, and four-fifths of domestic poll respondents backed calls to further postpone or cancel the Olympics. During the opening ceremony in Tokyo, a moment of silence was held for people who've died in the pandemic, and protesters were heard shouting outside the Olympic Stadium. They were powerless but impossible to ignore.
"Some folks will point to the high TV ratings in Japan. But that definitely doesn't erase the reality that a significant majority, in the lead-in to these Olympics, did not want them to happen this summer," said Jules Boykoff, a political science professor at Pacific University in Oregon who researches the Olympics.
"Just think what it must be like to be living in Japan right now, where you see the coronavirus rates surging across the country, where you see numerous prefectures in a state of emergency. And where you also see thousands and thousands of people who have come from around the world, none of them required to be vaccinated. It's just got to be gut-wrenching."
Beyond Tokyo, the host cities for three forthcoming Summer Games are set: Paris in 2024, Los Angeles in 2028, Brisbane in 2032. Sadiq Khan, the mayor of London, has said he'd explore bringing the Olympics back to "solidify London as the sporting capital of the world." Jakarta, Indonesia, bid for 2032 and plans to try again for 2036. In Turkey, Istanbul is all-in on 2036, too, determined to atone for its runner-up finish in the 2020 selection process.
"To make sure Istanbul gets its deserved place on the world sports map, we are focusing on the biggest target," Mayor Ekrem İmamoğlu said in July, per Inside The Games.
Increasingly few cities share this goal. Two decades ago, 10 cities applied to host the 2008 Summer Olympics, and Beijing beat Toronto and Paris in the IOC's final vote. China spent more than $40 billion to stage those games. Not coincidentally, interest in hosting has plummeted. As The Economist wrote ahead of Tokyo's Games, "The Olympics may become a race no city wants to run."
Consider: Four European cities submitted but then withdrew bids for 2022's Winter Games, leaving Beijing and Almaty, Kazakhstan, as the IOC's options. When Boston, Hamburg, Rome, and Budapest pulled out of the 2024 process, the IOC awarded those Games to Paris and, preemptively, the next edition to L.A., its only other suitor. As a workaround, the IOC now identifies a "preferred bidder" to select as host 11 years in advance, starting with Brisbane.
Further reform to the system is possible. Zimbalist promotes a radical alternative to the bid process: Hold every Summer Games in one city (like L.A.) and every Winter Games in one city (like somewhere in the Alps), bases where the needed venues, bedrooms, and transit lines already exist. Otherwise, he suggests the IOC build an Olympic campus on acreage in Greece, the movement's birthplace, a permanent host site where athletes could train in the years between Games.
"There's no reason for cities to have to rebuild the entire massive Olympic infrastructure that's required every four years," Zimbalist said.
A twist on this idea: Adopt the Euro 2020 model and take the Games worldwide. Matches at the recent soccer championships were played in 11 countries across Europe, at famous grounds such as London's Wembley Stadium and as far east as Azerbaijan, which straddles Asia. Different locales are equipped to host different Olympic events. Leverage that, Budzier suggests, instead of shoehorning the whole show within one country's borders.
"You can actually create, almost, a global Games," Budzier said.
So long as the status quo persists, every government that considers bidding ought to put the question to a public referendum, Boykoff said. Hosting the Olympics changes a city, he said, but conversations about whether to pursue them too often exclude anyone who lacks political power and economic clout. Popularizing the debate would give every resident a voice and a vote.
"I worry about folks from Brisbane, Los Angeles, Paris who really haven't been given a fair chance to weigh in," Boykoff said. "Now they're sort of stuck with a dud. That's a nice way of putting it, when you think about what's happening in Tokyo."
Tokyo's experience might spur would-be hosts to try to negotiate a better deal with the IOC, Zimbalist said. The pandemic will abate, but when some future crisis hits, having the power to cancel the Games might be desirable. If a preferred bidder refuses to spend gratuitously on venues, maybe the IOC will bend and costs will plateau. It's also possible that the landscape won't shift and the forces that champion bids - the construction industry, ambitious politicians - will keep convincing enough cities that the price is worth it.
To Budzier, the onus is on cities to be smart. The only sensible bids are those that shun white elephants, pinpointing how new facilities will be used long term. (One example: After Vancouver 2010, the speed skating oval in nearby Richmond was converted into a multi-sport community facility.) And even if a city can't control Olympic overruns, it can consider the opportunity cost: debts that could have been avoided, different projects that the money for the Games could have bankrolled.
It all comes back to Ohashi freestyling in the pool. Her story inspired people. Her golden swims were electric, even without fans on hand. The Japanese flag was raised, but after the meet, the lights darkened at the aquatics venue and the world headed home.
"What is the legacy we get out of (other) kinds of investments," Budzier said, "versus what is the legacy we get out of the two weeks of the greatest show on Earth?"
Nick Faris is a features writer at theScore.