JUNE 2021 IN
RICK ASTER’S WORLD

Has the Olympics Run Out of Host Cities?

Along with its other challenges, the Olympics may be running out of host cities. It is a stark sign that only one city put in a bid to host the 2032 Olympics.

That city was Brisbane, with support from surrounding cities, and the plan looks credible enough, so the sports world is largely willing to overlook the fact that this was the only bid.

Six other countries had expressed interest, but with time running out, none were near ready to put in an informal proposal, let alone a formal one.

The bottom line is that the Olympics was one notch above not having a site for 2032. This comes at the same time that Japan faces a political crisis over whether to proceed with the delayed 2020 Olympics over public opposition.

From economic theory, an auction with only one bid is not really an auction. The folk saying, “Beggars can’t be choosers,” reflects the imbalance of power in this situation. The single bid shows that the site selection process is already broken, and the International Olympic Committee will have to bring more to the table the next time around or risk being taken advantage of by one or two bidders, or the worse situation of having no bidders at all.

Sites have to be chosen far in advance because of the billions of dollars in construction required to get a city ready. Sports venues have to be constructed, and also housing, hospitality, transportation, and security. No well-balanced city would have all of these things already on the scale needed for the Olympics.

Considering the construction costs, host cities expect to lose a fraction of a billion dollars on hosting the games. It works as a kind of subsidy for the local construction and tourism sectors, but mainly as a publicity project with the goal of raising the profile of the city in the world.

The format of the Olympics will surely have to change. There will be a way to reduce the local impact and cost while maintaining the appearance of continuity for the U.S. TV audience that provides the greatest part of the funding.

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