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OLYMPICS: FANTASIES AND FACTS
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DO THE OLYMPICS GENERATE MONEY FOR THE ECONOMY?
FANTASY:
? Olympic boosters portray the Games as huge money-making events that benefit all of society. Gordon Campbell and the Vancouver-Whistler Olympic Bid Corporation say the Games will cost only $600 million and will generate $10 billion in profits.
FACTS:
? No modern Games have made money when all costs, including public money and land transfers, infrastructure costs, and security are factored in. The source of most of these numbers for the Vancouver Games is the provincial government’s own documents (reported by Vaughn Palmer, Vancouver Sun):
Bid process: $34 million (ends July, 2003)
Convention centre: $500 million
Sea to Sky highway: $1.7 billion
Rapid transit line plus buses, etc.: $2 billion
Staging the Games: $1.3 billion
Security: (not included in current bid) - cost for Salt Lake City: $560 million
Total: > $6 billion, not including other hidden costs (see below)
This is a best estimate, given that land giveaways and other deals are kept “off the books”.
Provincial and federal tax contributions earmarked so far: $620 million.
? Bid-boosters have excluded a number of projects (e.g., Sea-to-Sky) from estimates of cost but included them in estimates of profits.
? Other hidden costs: compensation for Whistler ski resort (est. millions, due to disruption of tourism!), the cost to B.C. taxpayers of providing a blanket indemnity against legal and financial risks associated with the Games, land giveaways (including the $90 million Callaghan Valley.
? Excluding such expenditures from the bottom line is nothing more than Enron-style accounting that hides the true cost of hosting the Olympics.
Some numbers from past Games:
MONTREAL, 1976: Debt: >1 billion (globe and mail; abcnews.com)
LAKE PLACID, 1980: Debt: $11 million
CALGARY, 1988: Debt: $910 million
BARCELONA, 1992: Debt: US$1.4 billion
SYDNEY, 2000: Games billed as self-financing by politicians were a $2.3-billion loss (Auditor General New South Wales Report on Sydney (2000) Olympics)
EXPO ’86: Debt: $311 million (paid by provincial lottery)
? True costs for L.A., ATLANTA and SALT LAKE CITY are difficult to obtain, as local and state funds and giveaways of property have been omitted (see US General Accounting Office analysis at www.gao.gov/new.items/gg00183.pdf.
? Officially, Atlanta made US$10 million, but that excludes the US$1 billion taxpayers spent on infrastructure.
? Utah tax revenues post-Olympics have fallen so far short of predictions that the state is facing a US$155 million shortfall, has slashed spending, dipped into emergency funding, and may have to order more employee layoffs. http://deseretnews.com/dn/view/0,1249,400008943,00.html
? Taxpayers in Atlanta and Barcelona are still paying a surcharge to work off the debt from the Games.
? The Calgary profit spin:
Excerpted from Pete McMartin, Vancouver Sun, Friday, April 05, 2002:
“The [Vancouver-Whistler] bid committee's argument would be that the Olympics will make money, and generate billions of dollars in economic activity. The prime example of a profit-maker they use is the 1988 Calgary Winter Olympics.
But did Calgary make a "profit" in the business sense of the word? The International Olympic Committee claims the 1988 Games made a $90-million profit. The Calgary Olympic Association claims they made a $150-million profit. But in 1999, Toronto Star columnist Thomas Walkom went to Calgary to test those claims.
Searching through the archives of Calgary city hall and the Calgary Olympic Development Association -- the body responsible for running the Olympic legacies -- he found confidential internal memos, contracts, a 1993 audit and the organizing committee's official report released in late 1988.
His conclusion: The Calgary Olympics were a money loser, and could only claim to be profitable if the huge subsidies received from federal, provincial and municipal governments for Olympic venues were excluded. " . . . as the auditor's report also points out," Walkom wrote, "the organizing committee's figures do not include the cost of building most of the Olympic facilities. "All in all, the three levels of government spent about $461 million on the Calgary Games: $261 million from Ottawa, $133 million from Alberta and $67 million from Calgary."
DOES HOSTING THE OLYMPICS GENERATE JOBS?
FANTASY: Campbell states that the Games will create “228,000 new jobs” (Based on a study conducted by the BC Ministry of Competition, Science, and Enterprise).
FACTS:
? What the study actually said: 228,000 worker-years over 30 years: 8,000 full-time jobs, boosting provincial employment levels by four-tenths of one per cent. However, it is important to note that the study failed to correctly distinguish between incremental GDP and job creation and that which would have occurred regardless of the Games. The corrected numbers reveal a much smaller figure than that cited above (see David Schreck, strategicthoughts.com.)
? In the state of Utah (Salt Lake City Games), average job growth for the Olympic impact period (1996-2001) was 37% less than the pre-Olympic period (1990-1995) (US Dept. of Labor - State and Area Employment, Nov. 22, ’02).
DOES HOSTING THE GAMES INCREASE TOURISM?
FANTASY: The Games will boost BC’s image internationally, and increase tourism throughout the province.
FACTS:
? Intrawest, owner of Whistler resort is negotiating compensation for lost tourism business during the Olympics.
? Whistler is already considered the Number One ski resort in the world (Pete McMartin, Vancouver Sun). And as Rafe Mair asks, is the winter downpour season really the time to showcase Vancouver (or Victoria, or…)?
? "Not only is the economic impact relatively insignificant, it is also heavily focused in the host city itself. In fact, other regions of the host country have actually experienced a net reduction in economic activity... particularly in relation to travel and tourism". (Jones Lang LaSalle report on the Salt Lake City Olympic Games)
? Excerpt: “Winter Olympics - Business Suffers As Locals Flee” - By Matthew Garrahan, February 20 2002. Salt Lake City may be buzzing with overseas visitors attending the Winter Olympics, but local businesses are suffering because so many residents have taken holidays to avoid the games. The Olympics has also had a negative impact on local tourism, despite the influx of overseas visitors.
ARE THE GAMES A GOOD INVESTMENT?
FANTASY: Many in the private sector support the Games and they know good investments, so this must be a good thing.
FACTS:
? Public funds are paying for the lion’s share of the costs of the Games.
? Taxpayers are legally responsible for any debt left over from the Games (The host governments sign this contract with the IOC, Rule 42 of the IOC Charter).
? If the Games are such a great investment, why isn’t the private sector footing the bill? Read on…
DO SPECIAL INTERESTS MAKE BIG PROFITS BEFORE, DURING, AND AFTER THE GAMES?
FANTASY: The Olympics are about promoting amateur sport and fostering peaceful competition between nations.
FACTS:
? Host cities pay big bucks just to enter the bid process: Just bidding for the 2010 Games is costing $34 million Cdn. That includes a US$500,000 non-refundable cheque the 2010 Bid Corp must give the IOC for being selected to the short list. That's on top of $100,000 US just for submitting a bid. (www.canada.com).
? Television rights alone are worth billions more and the IOC is not shy about marketing various products. In short, it’s a multinational business enterprise dressed up as amateur sport.
Athletes:
? Have trouble covering their training and traveling expenses. It's not unusual to see them holding fundraisers in local pubs.
? The American taxpayers subsidized the Salt Lake City Games with billions of dollars. It worked out to US$625,000 for every athlete at the Games. Not just American athletes, every athlete. How much of that did the athletes see?
Olympic officials:
? Fly First Class around the world, stay in 5-star hotels, and are driven around in limousines. The Bid Corp has guaranteed that hundreds of "internationally protected persons," IOC members, executive, staff, the presidents and secretaries general of international sporting federations and their guests will all be flown by helicopter to Whistler whenever they want to go.
Corruption:
? Recent Olympics have shown the underside of the Olympic movement with ‘fixed’ judging, drug scandals, and payoffs to IOC members. Marc Hodler, "a longtime member of the IOC's ruling inner circle" detailed what he described as the systematic buying and selling of the Olympic Games. Hodler cited a pattern of bribery and other ethical malpractice in the bidding and selection of Olympic host cities. He also cited bribes of up to $1 million and payoffs of up to $5 million. Hodler used the word "bribe" to describe the $500,000 scholarship fund set up by Salt Lake that benefited the relatives of six IOC members.
? Sen. John McCain, an Arizona Republican, re. the Salt Lake City Games: "It's got to do with land swaps exchanging worthless land for valuable land, it’s got to do with wealthy developers, and it’s got to do with the enrichment of billionaires."
The Vancouver-Whistler Olympic Bid:
? Secret deals are being negotiated with select First Nations bands, and municipal and corporate entities.
Crown corporations are handing over ‘contributions’ of public money:
? ICBC, against their Charter, gave $1.8 million to the Bid Corp while raising driver premiums
? B.C. Lottery Corporation donated $1.5 million
? B.C. Hydro has given $1.1 million
? Canada Post has given between $150,000 and $500,000 This spending is on projects that are outside the mandate of the Crown corporations.
? The Callaghan Valley: Back-room deals are being made to develop a mega ski resort at public expense, using the Olympics as cover: The provincial government has promised the Bid Corp more than $90 million of publicly-owned Crown land in the Callaghan Valley for the Athlete's Village and Nordic ski areas. BC taxpayers may pay for development of the resort, too. Current estimated costs for the village and facilities exceed $100 million. The total cost so far is close to $200 million, and likely to grow.
The Bid Corp highlights their long-term goal of future development of this land/facility as 'restricted housing' (pg. 31 Bid Corp proposal). In other words, what will most likely occur is that the people of BC give away the land, pay for the development, and the private sector will get to keep the resulting condos.
Furthermore, someone else has already claimed the land title. In the mid '80s the mother-daughter team of Nan and Diane Hartwick proposed a multi-season resort in the Callaghan and won the right to develop the area. The government of Bill Vander Zalm tried to insert their political cronies instead. A series of lawsuits followed and the issue is still not resolved. However, the RMCP Commercial Crimes unit in Vancouver has reopened an investigation into the actions of various persons, including Vander Zalm. Significantly, some of the same players from the earlier period have resurfaced. One of those named in the papers on the original Callaghan lawsuits is now Director for the Whistler Bid Corp who is a government of BC bureaucrat seconded from BC Assets and Lands/Crown Lands.
The Whistler Bid CEO, Jack Poole, is also current CEO of Concert Properties, a condo construction company and bid sponsor. Mr. Poole was former CEO of Vancouver Land Corp. (VLC) in the '80s and early '90s. VLC received 'free' land in Vancouver from former mayor Gordon Campbell to develop housing for the city's poor. The condos wound up on the high end market.
Corporate sponsorship and preferential treatment:
Excerpted from, “Corporate Games - bid donations total $16M” Andrew Petrozzi, Vancouver Sun, November 06, 2002
“Linda Oglov, vice-president of marketing for the Vancouver 2010 Bid Corporation…said donating money will not mean companies can expect preferential treatment should the Vancouver bid succeed…She quickly added: "What I always tell our sponsors, and I mean it, is that we will remember our friends. We'll remember the companies that came forward and supported us when we tried to bring this opportunity to British Columbia.”
WHAT SHOULD WE DO WITH ALL THAT MONEY?
FANTASY: Governments say they ‘can’t get blood from a stone’ when it comes to funding for nurses, teachers, hospitals, schools, women’s shelters, etc….
FACT: The various governments have now admitted that they are not broke and that there is funding for projects they like. Taking the conservative estimate of $6 billion as a starting figure, here is what we could buy instead of the Games:
? $1 billion for Forestry Renewal, creating a value- added, sustainable forestry.
? $1 billion to create a Sustainable Fishery.
? $1 billion for Health Care
? $1 billion for Education
? $1 billion for Alternative Energy.
And, there’s still a billion left for other projects, or to throw one heckuva party!
FOR MORE INFORMATION CONTACT:
CHRIS SHAW
csshawlab@hotmail.com
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This site was last updated 3/24/07
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