Mega-events: Bad for cities, bad for the planet?

Before mega sporting events take place, accountants and promoters tend to highlight their positive economic impact. However, according to US professor Andrew Zimbalist, net losses for cities hosting such events is the norm. Every Olympic Games held since 1960 has resulted in cost overruns for the host city, he pointed out.

Regardless of whether the bid is successful, Zimbalist told Play the Game delegates, the cost of bidding for an Olympic Games can add between USD 75 and 100 million to a city’s budget. And if the bid succeeds, no guarantee exists that the benefits to the city will outweigh the costs.

The Olympic bidding process entails inherent conflicts of interest between the cities and the sports organisations, he said. While agencies such as the IOC have a monopoly on awarding the rights to stage the games, their interests are often intertwined with those of the private sector. Construction, architectural and security firms involved in the games would all place their own interests ahead of those of the bidding city, he said.

Crowding out
While the benefits of tourism are widely publicized, Zimbalist said, sports tourism often crowds out regular tourism. Tourism’s overall footprint was down by six percent during the 2012 Olympics in London, he said.

The “word of mouth effect”, which the tourism industry claims is just as valuable as mass advertising, applies far less to sports tourism, he said. While the London Games cost between USD 15 and 20 billion to stage, he said, research had shown that it only gave between USD 3.5 and 4.5 billion in benefits.

Cost overruns are the norm, he said, as political support would vanish if the true cost of hosting a mega-event were initially known.

“When the bid is made, there is an effort to lowball the expenses to get the politicians to sign on,” he said. “Fixed deadlines mean that construction companies have to prioritise these projects, which means higher prices on the construction end.”

Employment is only boosted in the short term, he said, and bonds issues result in long term debt that can deplete future public resources. The IOC also requires host cities to clear advertising billboards, depriving cities of advertising income and forcing them to pay compensation. Tax exemptions also deplete civic funds, he said.

However, he added, a few success stories could be named including the Los Angeles Olympics in 1984 and the Barcelona Games in 1992. The 2006 World Cup in Germany was also a great success, he said. In a best-case scenario, he said, long term benefits include a “feelgod factor” and renewed city pride, a new culture of volunteering and overcoming gridlocked political systems.

Environmental concerns
Hans Bruyninckx, Executive Director of the European Environment Agency linked the future of mega-events to climate change, and stressed the importance of reducing the carbon footprint of such events. Organisers should consider committing to carbon offsetting and zero net emissions when events take place, he said, and commit to reducing the carbon footprint created by related travel. Sustainable development concerns related to mega-events will become increasingly important in the future, he said.

Naomi Westland, Media Manager, Sport and Human Rights at Amnesty International, claimed that the hosting of mega-events often triggered a deterioration in human rights. Amnesty was joining forces with other groups to urge sports federations to protect the right to protest during such events, she said. Citizens of host cities should also have the right not to be forcibly evicted, she said, and international labour standards must be met. Observers should be in place to ensure human rights standards are met, she said.

Human rights clampdown
A clampdown on gay rights and free speech overshadowed the 2014 Winter Olympics in Sochi, she said, and Beijing’s 2008 Olympics were accompanied by a similar clampdown on free protest. The 2014 World Cup in Brazil saw serious human rights abuses in connection with the dispersal of protests, she said, and Qatar continued to disregard labour norms in its preparations for the 2022 World Cup.

A massive human rights clampdown in Azerbaijan in connection with the 2015 European Games included the barring of Amnesty International and the Guardian newspaper she said.

However, the denial of human rights has not barred these nations from hosting future events, she added. Russia will host football’s European Championships in 2018, Rio will host the Olympic Games in 2016 and Baku the Islamic Games in 2017, she pointed out.

 “Human rights problems are exacerbated when big sports events come to town,” she said

Chadia Afkir, Crime Prevention and Criminal Justice Officer at the United Nations Office on Drugs and Crime (UNODC) said that mega-events contained the potential for a high level of corruption due to the complexities of the projects and the large amount of funding involved. The exceptional nature of such events often meant that normal regulations and standards were set aside, she pointed out. Independent financial monitoring and oversight was often lacking, she said, and the recruitment, selection and training of personnel was also subject to less regulation.

High level of corruption
The UNODC’s recommendations include an independent accounting mechanism, she said, as well as mandatory internal and external audits, transparency and public reporting requirements and a financial management accountability structure. Suppliers who had previously been involved in corruption should be excluded from the supply chain, she said, and the awarding of contracts should be fully transparent. Organisers should recognise which positions of employment could be vulnerable to corruption, she said, and candidates should be well-screened before being appointed. Host cities should seek advice early in the preparation process.

Elchin Safarov, Corporate Director of the Baku 2015 European Games Operations Committee (BEGOC), put a positive spin on the Azeri capital’s hosting of the first European Games. With a population of just ten million, he said, his nation that dramatically increased its profile on the world stage. A total of 30,000 volunteers were registered, he said, though only 12,500 were actually involved in the games.

Many aspects of life were improved, he said, from healthcare to education and transport. The hosting of the games had encouraged sports participation at a grassroots level, he said, and boosted tourism, trade and the general economy. Concrete benefits included new highways and railways, a new international airport terminal and new places of worship, he said.

Safarov responded to criticism of the large amount of money spent on the games, stating that their lasting legacy was worth the cost.

“It’s normal, all [host] cities are doing the same,” he said of the estimated USD 100 million price tag.