Is Anyone Making Money on the Olympics?

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↵There were reports that NBC expected to lose $200 million dollars on the Olympics. Those reports were apparently wrong, as per a disclosure late last week from parent company General Electric, the number is actually closer to $250 million. Eh, what's 50 million between friends, right? ↵

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↵Those at NBC can't be happy with the losses, and of course, are blaming the debt on the wintry economic climate, and not their complete overvaluing of the Olympic – and specifically the Winter Olympic – brand. So if NBC clearly isn't making money, who is? It sure isn't the city of Vancouver. SI's Dave Zirin is already up in Vancouver doing advance work and has a report that the city is getting crushed, financially, by hosting the Games. ↵

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↵⇥The original cost estimate was $660 million in public money. It's now at an admitted $6 billion and steadily climbing. An early economic impact statement was that the games could bring in $10 billion. Price Waterhouse Coopers just released their own study showing that the total economic impact will be more like $1 billion. In addition, the Olympic Village came in $100 million over budget and had to be bailed out by the city. ↵⇥

↵⇥Security was estimated at $175 million and the final cost will exceed $1 billion. These budget overruns are coinciding with drastic cuts to city services. On my first day in town, the cover of the local paper blared cheery news about the Games on the top flap, while a headline announcing the imminent layoff off 800 teachers was much further down the page. ↵⇥

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↵The tenor of Zirin's piece is that many people in Vancouver – from the customs guy in the airport to the bus drivers to the 3,000 homeless on the streets right now – don't think the Games will be a positive experience. Oh, and speaking of the homeless, Zirin spoke with a woman who told him that the Bid Committee promised that, "not a single person would be displaced due to the Games," but the city is now trying to sweep the homeless out of the downtown area in an effort to clean up the city. This is the same thing officials did in Beijing, and presumably every other big city that's hosted an Olympics and has a portion of the population that's homeless. ↵

↵Comparing Vancouver to Beijing isn't really fair, with all the smog issues and labor laws being broken to get the stadiums done and giant billboards of beautiful cityscapes covering up the slums, but the comparison stands when talking about how much money the city will lose in hosting the games. Take this report in the LA Times from last year about Beijing's beautiful, yet vacant, skyline: ↵

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↵⇥Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines. ↵⇥

↵⇥Now, six months after the Games ended, the city continues to dazzle by night, with neon and floodlights dancing across the skyline. By day, though, it is obvious that many are "see-through" buildings, to use the term coined during the Texas real estate bust of the 1980s. ↵⇥

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↵⇥The government spent $43 billion for the Olympics, nearly three times as much as any other host city. But many of the venues proved too big, too expensive and more photogenic than practical. ↵⇥

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↵⇥The National Stadium, known as the Bird's Nest, has only one event scheduled for this year: a performance of the opera "Turandot" on Aug. 8, the one-year anniversary of the Olympic opening ceremony. China's leading soccer club backed out of a deal to play there, saying it would be an embarrassment to use a 91,000-seat stadium for games that ordinarily attract only 10,000 spectators. ↵⇥

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↵⇥The venue, which costs $9 million a year to maintain, is expected to be turned into a shopping mall in several years, its owners announced. ↵⇥

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↵In fact, according to that report, nearly all of the Olympic facilities are useless to Beijing and its residents. Only the Water Cube is still something of an attraction. Oh, and it's not just Beijing. Per the Examiner: ↵
↵⇥Did Greece spend 10 billion euros or more on the Games? The true answer may never be determined. Whatever was spent, Greece lost billions of euros on the two-week sports event. By 2008, 21 of the 22 venues built for the 2004 Games were unused and were in various state of disrepair yet Greece taxpayers were paying for some sort of maintenance at the venues and that too was very costly. It seems that the Olympics did very little for Athens and Greece and that 10 billion euro expenditure was a waste and probably in some way has led to Greece’s financial meltdown. ↵
↵So if the cities are losing billions of dollars, and NBC is losing hundreds of millions of dollars, who is making any money? Jacques Rogge? The ghost of Juan Antonio Samaranch? (Note: not actually dead.) ↵

↵It's becoming more and more evident that the Olympic model just isn't working. And I understand that nobody knows how to fix it, but what's the fun in doing all this morose recapping without some idea what they should do in the future. So here's my plan, if I were in Rogge's shoes. ↵

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↵Have the Summer Games in Greece every four years and the Winter Games somewhere cold – say, the Alps – in the intermediate two years. Never change locations. There would be far less pressure on the host city to build insane venues they can't use for anything else. Greece, where the Olympics first started, would become a four-year destination for the entire world to travel, making the business plan for each Games a consistent rotation the country could handle. And the IOC wouldn't be leaving their devastation in different major cities around the globe like Lyle Landly in the Monorail episode of The Simpsons"I've hosted Olympics in Brockway, Ogdenville and North Haverbrook and by gum it put them on the map." ↵

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↵Now, the more prudent business model would be to have the Games in locations that can handle the event without having to build too many new facilities like the World Cup does. But that's not as much fun as the whole world going to Greece every four years. The athletes got to live on boats in Greece, so it had to be awesome. And the Alps…think of the cheese. ↵

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↵As for NBC, they'll likely go back to the scaled down model of coverage where we won't be able to see every single event on TV or online. For those wanting to catch all the action on the NBC family of networks, it'll be tough darts (note: not an actual Olympic event). Or maybe they can just stop lining the IOC's pockets with gold for the television rights. But what do we know? None of us could lose $250 million bucks in two weeks if Dick Ebersol handed us the NBC Universal credit card and dared us to try. So they must be doing something right. ↵

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This post originally appeared on the Sporting Blog. For more, see The Sporting Blog Archives.

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