Should The U.S. Spend Gold To Get The Gold?

As we prepare to welcome in 2015, some people already are preparing for events in 2024.

Last week, the U.S. Olympic Committee decided to move ahead with the process to put in a bid with the International Olympic Committee to host the 2024 Summer Games. 

The decision came after the USOC heard individual bids from four cities that want to play host that year: Boston, Los Angeles, San Francisco and Washington, D.C.

The Olympics have not been held in the U.S. since the 1996 Summer Games in Atlanta and the 2002 Winter Games in Salt Lake City. The closest was the 2010 Summer Games in Vancouver.

Not to put coal into anyone's Christmas (or Hanukah or Kwanza) stockings, but those looking for golden returns to go along with gold medals know that the process is long and arduous, and not always fruitful.

The overall cost for staging the 2012 Summer Games in London topped $14 billion, including $808 million for security and $215 million for what was called "operational provisions," with taxpayers footing a significant portion, according to the British government's Department for Culture Media and Sport.

Bidding for the 2022 Winter Olympics initially included Oslo, Stockholm, Krakow, Munich and a joint bid from Davos/St. Moritz, but they all dropped out, agreeing with Stockholm officials that revenues probably "would be lower and costs higher" than estimated. Left standing: Beijing and Almaty, Kazakhstan.

The IOC realizes it has a problem in this area. Earlier this month, it approved a new Olympic bidding process intended to make the system less costly for nations and cities seeking to enter a bid. That included encouraging cities to make maximum use of existing and temporary venues via refurbishing rather than building new sites, and encouraging joint bids by allowing cities to hold events outside the host city or country, "notably for reasons of (economics) and sustainability."

Paying close attention are the IOC's global top tier marketing partners — Atos, Coca-Cola, Dow Chemical, General Electric, McDonald's, Omega, Panasonic, Samsung and Visa — as well as the USOC's roster domestic partners.

Also paying close attention is Comcast's NBCUniversal, which this past May was awarded exclusive Olympic Games broadcast rights in the U.S. through 2032 in a deal put at more than $7.6 billion by industry analysts. That extended NBC's current deal, which ran through 2020. 

The challenge of cost has not deterred representatives from the U.S. cities seeking to host the 2024 Summer Games. “All four cities have presented plans that are part of the long-term visions for their communities,” Scott Blackmun, USOC CEO, said after the two-day meeting.

Of the four U.S. cities, only Los Angeles (Summer 1932 and 1984) has previously been an Olympics Games host.

Each of the four sent heavy hitters to the USOC meeting: The DC 2024 delegation included Mayor-elect Muriel Bowser, former NFL Commissioner Paul Tagliabue and Ted Leonsis, owner of the NBA's Washington Wizards and NHL's Capitals.

The 2024 San Francisco group included Mayor Ed Lee and Larry Baer, president and CEO for the San Francisco Giants. The Boston committee was fronted by Mayor Marty Walsh. Los Angeles Mayor Eric Garcetti and sports executive Casey Wasserman led their charge. 

A recent article in The New York Times by economics reporter Binyamin Appelbaum, under the headline, "Does Hosting The Olympics Actually Pay Off?," came with this observation: "There is strikingly little evidence that such events increase tourism or draw new investment. Spending lavishly on a short-lived event is, economically speaking, a dubious long-term strategy."

DC 2024 has said that hosting the Olympics would cost the region $4-$6 billion, but that with "proper planning," the economic impact could be greater than the cost.

The IOC’s deadline for 2024 bid submissions is Sept. 15, 2015, with the host city to be determined in 2017. The USOC said the name of the U.S. city it would submit would be made prior to the IOC deadline.

There will be no shortage of competitors. Rome already has decided to submit a bid and could be joined by Paris, Germany (Hamburg or Berlin), Budapest, Istanbul, Baku, Doha and a joint South Africa bid for Johannesburg-Pretoria.

As the article in the Times concluded, "Even for established cities like Boston or San Francisco, there is one clear reason to chase the Olympics or the World Cup: People like hosting major sporting events."

Go, Team USA!

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