No longer a race to host sport­ing events

De­vel­op­ing coun­tries are will­ing to bear hefty costs, risks in at­tempt to im­prove global po­si­tion­ing

Weekend Argus (Saturday Edition) - - FRONT PAGE - JOHN VARANO

IT USED to be that host­ing a ma­jor sport­ing event like the Olympic Games and the Fifa World Cup would carry sig­nif­i­cant pres­tige.

It was an hon­our that would help to shape a coun­try or city, as well as be a mo­ment of na­tional sym­bol­ism and eco­nomic trans­for­ma­tion.

Why, then, have many ad­vanced West­ern economies de­cided not to bid for such events, and even with­drawn their pro­pos­als?

Host­ing a prom­i­nent sport­ing event boosts tourism, and helps to rebuild or de­velop in­fra­struc­ture. How­ever, it re­quires an im­mense fi­nan­cial com­mit­ment and risk.

The 2014 Fifa World Cup cost Brazil $15 bil­lion to host, mak­ing it the most ex­pen­sive in the fed­er­a­tion’s his­tory. The cost of the 2016 Rio Sum­mer Olympics has been es­ti­mated at $4.58bn.

Those kinds of costs have be­come dif­fi­cult to jus­tify. A lack of can­di­dates will­ing to host the 2022 Win­ter Olympics saw the event awarded to Bei­jing – a city not renowned as a win­ter sports hub.

Away from the Olympics, Lon­don made a last- minute de­ci­sion to with­draw from host­ing the start of the 2017 Tour de France; less-fash­ion­able Düs­sel­dorf stepped in.

Emerg­ing economies like Brazil, as well as Rus­sia and Qatar, who will host the Fifa World Cups in 2018 and 2022, re­spec­tively, do not have the same eco­nomic ra­tio­nale to con­sider.

For those na­tions, host­ing sport­ing events are an in­vest­ment in their global po­si­tions; the cost over­runs and ap­par­ent losses are the price they are will­ing to pay.

The Olympics and Fifa World Cups are at­tract­ing fewer bids. There had been a spike in bids for the 2022 Win­ter Olympics but most can­di­dates with­drew, leav­ing Bei­jing and Al­maty in Kaza­khstan as the only bid­ders.

All four Fifa World Cups from 2010 to 2022 will be hosted by a de­vel­op­ing na­tion. How­ever, the next three sum­mer Olympics will take place in ma­jor cities with de­vel­oped economies – Tokyo, Paris and Los An­ge­les.

One ex­pla­na­tion is that the In­ter­na­tional Olympic Com­mit­tee (IOC) has been hand­ing out con­ces­sions. It changed its com­pet­i­tive process, and named the hosts for two con­sec­u­tive Olympics to give bid­ders more prepa­ra­tion time.

It al­lowed Paris and Los An­ge­les to de­cide the ex­act tim­ing, and of­fered $1.8bn to the LA or­gan­is­ing com­mit­tee.

The IOC un­der­stood the de­clin­ing ap­peal of host­ing the Games. It was why it de­liv­ered the Olympics Agenda 2020, a plan in­tended to pro­vide cost-sav­ing mea­sures and re­duce the com­plex­ity of the bid­ding process.

Is it worth­while host­ing ma­jor sport­ing events? Look­ing at the Olympics, a study con­ducted by the Univer­sity of Ox­ford found that the av­er­age cost over­run for all Games is 156%.

Not many ma­jor projects have an un­change­able dead­line for com­ple­tion, which can ramp up costs as the open­ing cer­e­mony ap­proaches and money gets thrown at any re­main­ing prob­lems.

The same study es­tab­lished that the 2012 Lon­don Sum­mer Olympics has been the most costly Games in his­tory – $15bn.

The 1976 Montreal Sum­mer Olympics showed the high­est cost over­run at 720%.

The ta­ble above il­lus­trates that the Games from 1968 to 2016 (sum­mer and win­ter) have all en­coun­tered sig­nif­i­cant cost over­runs.

The de­cline in en­thu­si­asm for host­ing mega- events has sev­eral driv­ing fac­tors. The fragility of economies due to global fi­nan­cial crises is a sig­nif­i­cant one, along with a grow­ing in­equal­ity in the dis­tri­bu­tion of wealth and in­come.

It con­trib­utes to an in­creased cyn­i­cism around ma­jor sport­ing projects which need vast fund­ing, and this is true when there is no gen­uine guar­an­tee of sub­stan­tial or dis­cernible ben­e­fits for tax­pay­ers.

It used to be that ev­ery­one was play­ing the same game; coun­tries would com­pete for the brag­ging rights and pay lit­tle at­ten­tion to eco­nomic ra­tio­nal­ity or in­fra­struc­ture legacy.

But now, the coun­tries that can most eas­ily jus­tify the risk are those with the most to gain on the world stage, rather than those with the deep­est pock­ets.

Rus­sia and Qatar do not need to turn a profit, but they do want a stronger voice in global af­fairs.

For de­vel­op­ing economies, mega-event host­ing is mo­ti­vated by glob­al­i­sa­tion and soft power.

China and South Africa have re­cently shown that it can be an ex­cep­tional op­por­tu­nity to de­vise a new iden­tity to both their lo­cal cit­i­zenry and global au­di­ence.

The up­dat­ing of your global im­age, how­ever, can hit some ob­sta­cles. Rus­sia and Qatar are hop­ing they will end up pro­ject­ing an im­age of mod­ern and ad­vanc­ing na­tion-states.

But, for now, they are sad­dled with the neg­a­tive im­pres­sion cre­ated by cor­rup­tion and bribery ac­cu­sa­tions. – The Con­ver­sa­tion

● John Varano is a re­searcher at the Univer­sity of Ox­ford.


De­vel­op­ing na­tions and economies like South Africa have shown that host­ing mega sport­ing events, like the Fifa World Cup in 2010, can de­vise a new iden­tity for their lo­cal cit­i­zenry and global au­di­ence.

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