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From the Summer 2012 Games People Play issue

By Peter Berlin

PARIS—When the gun sounds on the evening of August 4 to set the fastest men in the world surging down the track at the Olympic Stadium in London, much of the world will be watching. For the shrinking, but still significant, slice of population that remains immune to the increasingly pervasive global reach of sport, the question is: Why? There are those who cannot understand, may even distrust, competitiveness in adults. Others question the resources—time, energy, and, above all, money—dedicated to modern sports, particularly the great set-piece events like the Olympics or the soccer World Cup.

For sport agnostics, games are for children. Eight men sprinting in a straight line are taking part in a frivolous and useless activity. Surely the hundreds of millions watching on television or, increasingly, computers, tablets, and smart phones have something better to do.

Yet the men’s 100 meters offers a powerful argument for the thrilling and beautiful spectacle sport can offer. It is an elemental test. Every child has raced against his peers to see who is fastest. It is also easy to understand. It can be followed without any grasp of arcane rules or tricky technique. The race may be the briefest event in the track and field program—less than 10 seconds—yet, when the race is close, it can generate nerve-shredding uncertainty and sudden twists of fortune. Even when the race is not close—like the 2008 final in Beijing, when, with the pressure at its most intense as he pursued the greatest prize in his sport, Usain Bolt crushed the best sprinters in the world and smashed the world record despite slowing down at the end—it provides proof of the potential power and grace of the human body. The joyous antics of Bolt after he won also offered a reminder that even when we are grown, the child lives on in all of us. When Bolt drew back an imaginary bow, he unconsciously provided a reminder that throughout history for many young men, the most common experience of human competitive urge has been war. As he draped himself in the Jamaican flag for his victory lap, he advertised the central role that nationalism plays in the popularity of modern sport.

If the urge to compete is part of human nature, then perhaps sports do a service by diverting that urge into events whose outcomes have no effect on the wider world. The very triviality of sports becomes one of its assets. Each nation’s young elite is trained and dressed in national uniforms and sent out to defeat the youth of other nations not on the battlefield but in the sports arena. Yet the relationship between war and sports is far more complex. Baron Pierre de Coubertin, principal founder of the modern Olympics, was an avowed pacifist, but he was initially driven by France’s humiliation in its war with Prussia in 1870. He believed French education focused too much on the mind and that it should emulate British schools and strengthen the body as well.

RUNNING IN ARMOR

One event at the ancient Olympics was running in armor. The modern Games contain a string of events that originated in war or as preparation for war: fencing, shooting, wrestling, horse riding, archery, javelin, and even, so legend has it, the marathon. When Coubertin updated the ancient pentathlon, he chose to give his event a military narrative. The competitor is a soldier who has to deliver a message by riding a horse, fighting foes with sword and pistol, swimming a river, then running to his destination. Yet the explanation may be more innocent. Coubertin wanted to sell his creation—warfare as a competitive metaphor. Looking beyond the Olympics, the boundaries between play and war can blur. Armies develop increasingly sophisticated war games to play at combat. Yet no one considers the original war game, chess, a preparation for combat. As anyone who has participated in the heated debates over chess coverage at newspapers can attest, there is some question as to whether it is a sport at all. All mind and no body, it does not meet Coubertin’s idea of sport. Still, there is no starker demonstration of sport as a proxy for combat between nations than the 1972 world championship between Bobby Fischer and Boris Spassky in Reykjavik, where the contestants became pawns in the Cold War—“our free spirit” (or nutcase) against “their robot.” The competitive drive was being played out on a whole series of levels.

For skeptics, corruption is an inevitable result of sport’s transformation into a global industry. The growing thrall of sport is encouraged by the broadcasters, advertisers, and sponsors who invest so much, and by governments, who try to piggyback on the glamour of games and the nationalistic pride inspired by winning teams and athletes. It is a form of false consciousness—a distraction from the problems of the world. Worse, it draws energy, attention, and money from more worthwhile projects. Sport now stands alongside religion as an opiate for the masses. If war is politics by other means, then sport, as nation tries to beat nation, is war by other means. It is not only the athletes who try to skirt the rules. The competitions to stage major events have often been muddied by dirty politics and outright corruption.

The International Olympic Committee (IOC) has long been adept at creating, or co-opting, symbols and rituals. The ancient games in Greece were based at the Temple of Zeus in Olympia, which housed one of the Seven Wonders of the Ancient World. In their rigid schedule, competitive events were interspersed with religious ceremonies. Similarly, the modern games intentionally took on religious trappings. Coubertin once said: “For me sport was a religion … with religious sentiment.” The Olympics drips with quasi-religious ritual—starting with the flame, lit at Olympia, which marks the opening and closing ceremonies every four years.

NATIONALISM AMPED UP

The Olympics has also embraced the selling power of nationalism. Even individual athletes compete for national teams. Yet the IOC has taken for itself the trappings of a nation state, with a flag, an anthem, a salute, and an oath, read on behalf of all competitors by one athlete at the opening ceremony. The IOC remains wedded to the idea of an “Olympic Truce,” based on the truce almost always observed by the Greek city-states during the ancient Games. Thus, the IOC presents its increasingly grandiose and commercial Games as a force for peace.

Although the age of boycotts has largely passed, no Olympics is complete without a political dispute. Hanging over the London Games are Saudi Arabia, Qatar, and Brunei who had never previously selected a female athlete. After pressure from the IOC, Qatar and Brunei included female athletes on their national teams, but Saudi Arabia’s sports minister still “does not approve” of sending women to the Olympics.

Still, the IOC’s formula sells. The Olympics are unchallenged as the pre-eminent multi-sports event in the world. For the IOC, the Games are a money-generating machine built on the “golden triangle” of broadcasting, advertising, and sponsorship. The IOC expects the host city and country to pay for the lasting glory of having hosted the Games. At the highest level, the IOC understands the dangers of host cities spending wastefully on spectacular facilities that sit unused after the Games.

The vote for the 2012 host city provided a sobering reminder of the realities of the decision making process. The French delegation arrived at the Raffles Hotel in Singapore for the vote in July 2004 led by Bertrand Delanoë, the controversial left-wing mayor of Paris, and David Douillet, a double Olympic gold medalist turned politician. The Paris team, at that moment leading the pack, reportedly whiled away their time in the Raffles bar waiting to give their bid presentation and victory speech. The French president, Jacques Chirac, joined them briefly on his way from Russia to Scotland, tailed by headlines that in Moscow he had told Angela Merkel and Vladimir Putin that it was impossible to trust the British because of their awful cuisine—only Finland’s was worse. The Finns had two voting members on the IOC.

The British arrived, led by Ken Livingstone, the controversial left-wing mayor of London, and Sebastian Coe, the double Olympic gold medalist turned politician. The London team set up a bar on the first floor of the hotel where, flirting with the corruption rules, they wined and dined the IOC delegates. Tony Blair came for several days and, with David Beckham, acted as host in the hospitality room. Before flying out, Blair had met with Silvio Berlusconi, winning the Italian prime minister’s support for the bid. Italy had five IOC votes.

The London bidders had done their homework. With the burka controversy raging in France, the Brits included a woman in a headscarf at their press conferences. London won, beating Paris, 54-50, in the final ballot. Blair said he had dreaded the “humiliation” of defeat by the French.

ANSWERED PRAYERS

In a presentation on bidding for the Winter Games, the IOC said: “Apart from the sporting events, the main reason for applying for candidacy lies in the possibilities for economic development and tourism inherent in such an event.” It goes on: “Two main reasons seem to motivate most applicant cities, namely international recognition and increased opportunities for invigorated urban and regional development.’’

Yet the evidence suggests that advocates of big sporting events habitually overstate the jump in tourism, which is, in any case, local not national. It’s becoming clear that the London Games are going to deliver, at best, a very small and quite temporary uptick in London’s tourist revenues. That comes principally from the tendency of tourism-related businesses to ramp up prices in an Olympic year. Those who come for the Games, however, won’t be spending as much on traditional British tourist attractions. Andrew Lloyd Webber has predicted a “bloodbath” for West End theaters this summer.

The Games’ physical legacy includes upgrades to transportation and the construction of housing in the shape of the Olympic Village. The question is whether these are the upgrades or accommodations the city really needs. The most spectacular example of what can go wrong is the 1976 Montreal Olympics. They left the city with a debt of 1.5 billion Canadian dollars, also about 1.5 billion in 1976 U.S. dollars, which it did not clear until 2006. In large part, the expense came from two particularly costly white elephants. The Olympic Stadium cost more than 1.5 billion Canadian dollars and was nicknamed the “Big Owe”—the uncomfortable, and, as bits of the roof fell off, sometimes dangerous home of the Montreal Expos for 27 seasons. Mirabel Airport, which cost 500 million Canadian dollars, never attracted the predicted business and is today almost exclusively a cargo facility. Almost always, much of the money could have probably been better spent elsewhere, and elsewhere could mean anywhere in the country. Britain has followed the Olympic pattern. Since 2005, London has mopped up a great deal of investment from the national government.

The official cost to the public purse of the London Games is £9.3 billion ($15 billion)—triple the original estimate—but the Public Accounts Committee this year put the figure at £11 billion. Sky television, a British cable broadcaster owned by Rupert Murdoch, has calculated that, including upgrades to public transport, the actual cost is nearer £24 billion, or $38 billion. That’s not far off the estimated $44 billion Beijing spent in an attempt to stage the most spectacular Games possible. The economic downturn and the collapse of the London property market has not helped. When Lend Lease, an Australian property developer, withdrew from its partnership to build the Olympic Village, it was built with public money and in 2011 sold to a property firm owned by Qatar’s royal family for a loss of £255 million.

NO BID

“Had we known what we know now, would we have bid for the Olympics? Almost certainly not,” says Tessa Jowell, the Labor minister responsible for sport at the time of the bid. Still, with the same refrain played before and after virtually every Olympic gathering—and indeed after a host of other global sports spectaculars from the soccer World Cup to the Commonwealth Games—it’s often difficult to understand why governments keep coming back for more. It is a question that fascinates economists who have been looking for a broader economic impact of “mega-events.”

There does seem to be a brief, small economic boost associated with the Olympics, which is hardly surprising given the amount of money spent on staging them. According to John Irons, of the Economic Policy Institute in Washington, GDP generally grows 1.5 percent in the years immediately preceding the Olympics, with the apex about three years before the Games, when construction work peaks. While there is no lasting impact on GDP from the Olympics, Irons has found that countries that host the World Cup experience a drop in GDP in the year of the competition and then a 1 percent gain in GDP in the two years after the event.

Even more curious are the findings of Andrew K. Rose, of the University of California, and Mark M. Spiegel, of the Federal Reserve in San Francisco. Their results suggest that “countries which have hosted the games seem to have exports some 30 percent higher” than comparable countries. There is also an export boost for countries that host other “mega-events” such as the World Cup. Yet that effect is the same for countries that bid for the Games but lost. Rose and Spiegel suggest that “bidding to host an international mega-event such as the Olympics is part of a costly strategy that signals trade liberalization and results in increased openness.” But their findings show that “hosting the games in and of itself has no impact on a nation’s fundamentals or trade.”

Rose and Spiegel list a series of countries whose winning bid for a major event coincided with other moves to liberalize politically or economically. In 2001, two months after Beijing captured the 2008 Games, it successfully concluded negotiations with the World Trade Organization. Rome won the 1960 games in 1955, and as Rose and Spiegel pointed out, that “same year Italy started to move towards currency convertibility, joined the UN, and, most importantly, began the Messina negotiations that would lead two years later to the Treaty of Rome and the creation of the European Economic Community.” The Tokyo games of 1964 coincided with Japanese entry into the IMF and the OECD. Barcelona was awarded the 1992 games in 1986, the year Spain joined the EEC. The start of political liberalization in South Korea coincided not with the Games in 1988 but with their award. Mexico entered GATT in 1986, the year it hosted its second World Cup.

This suggests that the perception of liberalization, be it economic or political or both, begets the Games, rather than the other way round. For a while, the IOC congratulated itself that the imminent Seoul Games helped accelerate South Korea’s de facto shift to democracy. Beijing exploited that idea when it bid for the 2008 Games, only to spend the Olympics crossly fending off questions from the international media as it became clear it had no intention of allowing its people more freedom and was, in fact, busily arresting its citizens foolish enough to think it might.

If seeking to stage a major sports event sends a signal about the virility of the host economy, then it really doesn’t matter if it makes economic sense.

The $100 million opening ceremonies to the Beijing Games broadcast that message to an audience anywhere between 1 billion and 4 billion in glorious, CGI-enhanced technicolor. Perhaps it is no surprise that Brazil will host both the next World Cup and the 2016 Olympics. The message is clear. This is no longer a third world country but a major emerging player on the world economic stage. Yet for any developing country, this strategy carries considerable risk. The global coverage of the build up to the 2014 World Cup is tinged with skepticism over Brazil’s ability to deliver and indignation that the urban redevelopment means “pacifying” or relocating the city’s favelas. In much the same way, the messages from India, with the Commonwealth Games in Delhi in 2010, and Greece, with the Athens Olympics in 2004, were muddied as the year before the games was dominated by headlines questioning their capacity to deliver. Indeed, Greece is still paying both financially and in terms of international confidence for its Olympics.

For the London Games, the prospect of another type of disaster has driven spending. The day after the vote in Singapore, with the world’s gaze on London, four suicide bombers blew themselves up on public transport during rush hour, killing 52—a reminder that both Britain and the Olympics have been targets for terrorists before. But the 2005 London bombings have turned into a business opportunity. In March 2012, the House of Commons Public Accounts Committee put the security budget for the London Games at £553 million ($888 million), more than twice the original estimate.

Residents of an apartment block in the East End of London were surprised to find that they were having a surface-to-air missile battery installed on their roof as part of the security effort. Discussing the development on a BBC news review show, Paul Merton, a comedian, said: “We thought we signed up to host the Olympics, but we signed up to live in North Korea instead.”

It’s unclear if a nation, broadly, feels better about itself after hosting a Games. Yet politicians do believe that sporting success makes voters feel better about their leaders. Hosting an Olympics is productive since the home nation almost invariably wins more medals. One problem of the modern obsession with medals is that it diverts scarce resources from mass-participation toward elite athletes. Whether the great mass of the British public feels better after the Games remains to be seen, but they certainly won’t be any fitter.

The modern Olympics are principally a made-for-television event. That’s where the money comes from. The fans in the stadium are props, the noisy, colorful backdrop that reassures viewers they are watching something important. It is wonderful to be there, but when the gun goes off to start the 100 meters final, an armchair in front of the television, which will show the race close up, from multiple angles, at multiple speeds, and quickly relay the smiling face and breathless, happy, clichéd words of the victor, offers an excellent vantage point. And for the hundreds of million viewers around the world, it will hardly matter that the race was in London, rather than Paris or Beijing or Rio. Britons may well take pride in the “London Games,” but the economic and social costs they have already borne, and which they may find are the true legacy of hosting, should be a warning for those contemplating bidding for a mega-event.

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Peter Berlin was sports editor of the International Herald Tribune and The Financial Times. He has covered four Olympic Summer Games and writes on sports from his base in Paris.

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