No wealth to be had in Commonwealth Games
No-one wants to host the Commonwealth Games. From Australia to Canada, from SA to India, the former colonies are putting their hands in their pockets, and avoiding eye contact with the Commonwealth Games Federation.
This week, the Gold Coast said no thanks to hosting the Games, which came just a few months after the state of Victoria pulled out. The Commonwealth Games is facing an existential crisis. It does not have the pull of the Olympics, which relies on the egos of politicians to make those budgets happen and then overrun with abandon. It seems unlikely that a host will be found for 2026. The one thing much of the Commonwealth has in common is a lack of wealth.
The gist is: “Look, we’ll come and play if you invite us, but, can we have the party at your house?” The price of hosting a multi-sport games is not just an issue but THE issue when it comes to pros and cons. Even the Olympics is beginning to lose its lustre.
In June, the Bloomberg news agency ran a story headlined “The Olympics are a giant money sink. So what?” It pushed a narrative that the “benefits of staging the games go beyond profit-and-loss accounting”, or, so what if you spend loads of tax money on an event that leaves a vague legacy, fading memories and broken promises.
“You can’t blame Britons for looking back fondly on the 2012 London Olympics. It was possibly the last time the country did anything really well in the eyes of the world, an unqualified sporting success and an optimistic celebration of openness and diversity. After a decade marked by Brexit, public health failures, economic crisis and rising anti-immigration rhetoric, it’s small wonder the games retain a warm glow for many. But were they worth the money?” asked Bloomberg.
The London Games were budgeted to cost £2.4bn. They ended costing three times that, at almost £9bn. Some estimates reckon it was closer to £11bn. Every medal won by the Great Britain team cost an average of just over £4.5m. The legacy was supposed to be, according to the promises, a fitter country of Britons, more jobs and low-cost housing in London. The bid, won in 2005, promised to be a “model for social inclusion”, with 30,000 new homes built to provide “affordable housing”.
Except, well, they didn’t.
By 2022, 10 years after the Games, just 13,000 homes were built on the Olympic site. The athletes’ village was rebranded. Flats were available on the Olympic site for £1,750 a month, probably more now.
It is not just the organisers of the London Olympics that didn’t know how to stick to budgets. An Oxford University report found that every Games held since 1960 has run over budget, “the highest overrun on record for any type of megaproject”, which was more than “roads, bridges, dams and other major undertakings”.
Before the Tokyo Olympics were held in 2021, the New York Times quoted a Journal of Economic Perspectives report that “examined how rosy projections of the Games’ economic impact — usually commissioned by organisations with an interest in their city’s hosting the spectacle — stacked up to reality. It concluded that actual effects ‘are either nearzero or a fraction of that predicted prior to the event’.”
Andrew Zimbalist, a professor at Smith College and author of three books on the economics of the Olympics, believes the reasons cities continue bidding for the Games is the influence of construction giants, trade unions and investment bankers, who will make billions of dollars in contracts and then hire a consultancy firm to dream up a report to make it all seem worthwhile, the “legacy”.
How to fix it? Zimbalist has a solution, one that will struggle to find purchase: “If we were living in a rational world, we would have the same city hosting the Games every two years. There’s no reason to rebuild the Olympic Shangri-La every four years. It doesn’t make sense for the cities. It makes no sense from the standpoint of climate change. When the modern Olympics were created in 1896, we didn’t have telecommunications and jet travel. So in order to have the world participate in and enjoy the Olympics, you had to move it around. We don’t have to do that anymore.”
It makes sense. Let us hope the Commonwealth Games Federation pays heed.