JUDY WOODRUFF: Hosting the Olympic Games has become a kind of Olympian feat in itself. Many cities have struggled with it, while others have said the outcome is well worth it.
But Boston's ambivalence about hosting the Summer Games and the decision it announced yesterday is casting a fresh spotlight on these questions.
MAYOR MARTY WALSH, Boston: This is a commitment that I cannot make without assurances that Boston and its residents will be protected.
JUDY WOODRUFF: With that announcement yesterday, Boston's bid to host the 2024 Summer Olympics came to an end. Mayor Marty Walsh:
MAYOR MARTY WALSH, Boston: I refuse to mortgage the future of the city away. I refuse to put Boston on the hook for overruns. And I refuse to commit to signing a guarantee that uses taxpayers' dollars to pay for the Olympics.
JUDY WOODRUFF: The move follows a months-long multimillion-dollar campaign that preceded even January's selection of Boston by the U.S. Olympic Committee as America's candidate city. High-profile athletes with Boston ties made pitches, and planners envisioned venues spread across metro Boston and Massachusetts.
But the bid soured soon after Boston was picked. As Bostonians learned of the cost details, their support plummeted. In a statement yesterday, the U.S. Olympic Committee's CEO, Scott Blackmun, said the USOC “does not think that level of support enjoyed by Boston's bid would allow it to prevail over great bids from Paris, Rome, Hamburg, Budapest or Toronto.”
U.S. Olympic officials now have until September 15 to name a replacement candidate city. One possibility is Los Angeles, which hosted the Games in 1932 and 1984, and has already expressed interest.
The U.S. hasn't hosted a Summer Olympics since Atlanta in 1996, or any Olympics since the 2002 Salt Lake City Winter Games. Boston's doubts and decision underline the great costs borne by Olympic host cities. Rio de Janeiro, which will hold next year's Summer Games, is spending about $12 billion on the event. And Russia spent upwards of $50 billion to organize the 2014 Winter Games in Sochi.
The question that many are asking in the wake of Boston is whether it ultimately is worth hosting the Games. There are various ways of measuring that.
And we get two different takes. George Hirthler has been a communications strategist for 10 Olympic campaigns, including Atlanta's successful 1996 bid and Vancouver in 2010. And Andrew Zimbalist is a professor of economics at Smith College and author of the book “Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup.”
And we welcome both of you.
So, let's talk about Boston first, Andrew Zimbalist, to you.
What would you add to what was just reported about what went wrong in Boston? Why were they chosen and then what fell apart?
ANDREW ZIMBALIST, Author “Circus Maximus”: I think, from the very beginning, when Boston was selected back in January — and, by the way, the USOC said they selected Boston because it was the most walkable of the four competitors.
Ever since the announcement was made that Boston was selected, the Boston '24 Committee came out with a lot of incomplete and deceiving and misdirection-oriented information. And over the last several months, every couple of weeks, some new piece of information has been released that I think has lessened the trust of Bostonians and citizens of Massachusetts, who, after all, just a few years ago, went through the Big Dig construction in Boston, which was supposed to cost $2 billion and ended up costing over $20 billion.
JUDY WOODRUFF: George Hirthler, anything to add to that about what went wrong in Boston?
GEORGE HIRTHLER, Olympic Campaign Strategist: What went wrong, Judy, was the public narrative that was pretty much controlled by Professor Zimbalist and the cohort of — his cohort of colleagues at No Boston Olympics.
They kept the public conversation completely focused on the financial risks of the Games. So the public never had a chance to consider what it would be like to have athletes from 200 countries around the world living in an Olympic Village in their midst. The Games would have been extremely walkable for 90 percent of the fans who came into the Boston.
And because the economic argument prevailed and kept things going, a lot of fear was introduced. And bids don't usually get their economic numbers really worked out until well into the international phase, which doesn't even start in this race until September. Boston was at a great disadvantage in that regard.
It had gone through a domestic phase, and then you're just looking at preliminary numbers. Professor Zimbalist and Chris Dempsey and the others came in attacked every single number and kept the public conversation completely focused on risk and fear.
And so the people never really had a chance to look at the overall benefits and aspects that might have been delivered in the Games.
JUDY WOODRUFF: Well, I do want to move on to the larger question we raised here, but, Professor Zimbalist, let me give you an opportunity to respond.
ANDREW ZIMBALIST: I just want to thank George for making me out to be so powerful. I don't think we had nearly that impact.
But, look, here's the reality. Every single Olympic Games since 1960 that we have financial data for has had a cost overrun. The average cost overrun of the Summer Olympics since 1980 has been 3.5 times, which means, if you compare the initial bid numbers to the final numbers, you have to multiply them by 3.5.
They talk about that the last three Olympic Games in the United States were in surplus, in profit, they say. Well, in fact, there are three buckets of money that gets spent when you host the Olympics. The first bucket is the operations budget of the 17 days of the Games.
Then there is the venue budget, and then there is an infrastructure bucket. It's true that the last three U.S. Games in the operations budget had a surplus. That doesn't mean overall there's a surplus. It doesn't mean overall that there's a lot of public money going into the Games.
JUDY WOODRUFF: Well, George Hirthler, do you want to respond to that? And then I do want to move on to this bigger question.
GEORGE HIRTHLER: Well, the obvious example that I can talk about — I'm no economist, but I can talk about the economics of Atlanta a little bit, anecdotally.
Since the flame went out in Atlanta, Judy — and, by the way, the venues were built out of marketing revenues in Atlanta. There wasn't a separate bucket, as Professor Zimbalist has just said, for the development.
We built eight competitive competition venues for $520 million out of the marketing revenues for the Atlanta Games and still ended up with a profit. But since the flame went out in Atlanta, Judy, there's been $3.2 million of investments around Centennial Olympic Park, which was not park of the original plan, that served as a catalyst for the economic redevelopment of downtown Atlanta.
Last year, we hopped the National Center for Civil and Human Rights right off the park, next to the World of Coke, next to the Georgia Aquarium, next to a lot of new hotels, condos, restaurants, and businesses, all of which came to Atlanta because of the Olympic Games.
JUDY WOODRUFF: So…
GEORGE HIRTHLER: Professor Zimbalist might also add in his comments that the Games don't help raise the image of the city internationally.
Today, Atlanta has 18 Fortune 500 headquarters here. That's up from 12 before the Games, because — primarily because of the image enhancement we got out of the Olympic Games.
JUDY WOODRUFF: Well, I do want to broaden this out.
ANDREW ZIMBALIST: This reminds me of the story…
JUDY WOODRUFF: I do want to broaden this out, Andrew Zimbalist, though, and ask you, is your belief, is your argument that there's a better model for deciding where these Games go, or that the U.S. shouldn't be bidding for them, period?
ANDREW ZIMBALIST: I think it's a very difficult proposition to come out economically neutral when you host these Games, very difficult.
Los Angeles obviously did it in 1984 under very special circumstances. I think Barcelona achieved some positive economic results from hosting in 1992, also because of some very special circumstances.
In terms — I wouldn't say you should never bid. I think that it's possible that a Los Angeles bid might make sense. They have most of the venue infrastructure and the transportation infrastructure already in place, so the amount of investment they would have to make would be quite small.
That's something that we have to see when the plans develop and whether or not Mayor Garcetti is willing to sign the guarantee to the IOC that they will cover any cost overruns or revenue shortfalls.
JUDY WOODRUFF: George Hirthler, is there a better model, I guess, is the question I'm getting at here, because, clearly, some cities have struggled with the cost that is required to put these Games on, and there are real questions. There were questions in Boston. Is there a better model?
GEORGE HIRTHLER: There are new models, Judy.
JUDY WOODRUFF: Go ahead.
GEORGE HIRTHLER: There are going to be new models. And Boston would have invented a new model, I'm sure, in line with the Agenda 2020 reforms that the International Olympic Committee has recently begun to implement.
But forget that. There is a better story, and it's the story of the Olympic movement and its value to our world. And you never hear about it in the economic, financial risk stories of the opponents of the Games. Right now, the Olympic movement is at work in 200 countries around the world 365 days a year, instilling the values of excellence, friendship and respect, respect for opponents, other cultures, differences in young children, millions of young children around the world.
In our world, we need a positive force like that at work around the world. They invest — the Olympic movement invests a billion dollars every year in the development of sport around the world. And that money flows directly from the sponsorships and broadcast rights that are sold for the cities that are hosting the Games.
JUDY WOODRUFF: Well, let me…
GEORGE HIRTHLER: So, the IOC draws money from these host cities in order to develop sport globally.
JUDY WOODRUFF: Well, let me…
GEORGE HIRTHLER: And I would like to know what the value of the development of sport, giving kids to a chance to choose sport everywhere, what's the economic development of that?
JUDY WOODRUFF: All right, let me just quickly turn in the little bit of time we have left to Andrew Zimbalist.
What about this bigger benefit that you hear Mr. Hirthler describing? Why doesn't that outweigh some of the economic questions that you're focused on?
ANDREW ZIMBALIST: Look, the Olympic movement is a good thing. Olympic values is a good thing. Nobody is contesting that.
The issue that we're talking about is whether or not it makes economic sense for cities to host the Olympic Games, whether or not it pays off for them to do that. And all of the academic literature, all of the serious, unpaid-for literature finds that it's not a good investment for cities to make.
JUDY WOODRUFF: All right.
ANDREW ZIMBALIST: That's the argument that I'm representing here.
JUDY WOODRUFF: All right, we're going to have to leave it there.
We thank you both for joining us, Andrew Zimbalist and George Hirthler.
GEORGE HIRTHLER: Thank you, Judy.
ANDREW ZIMBALIST: Thank you.