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Evan Horowitz

What are the costs and benefits of a Boston Olympics?

One day this January, we may suddenly learn that Boston is the US nominee to host the 2024 Olympics, and the odds-on favorite to beat the competition and become the official host city. At that point, with the race already underway, there will be a lot of pressure to push ahead with the bid and, well, go for the gold.

Before we find ourselves in that heady position, it may be worth reflecting on the fate of other Olympic cities. For them, the Olympics bring more than record-breaking feats and impossibly close finishes. It also brings years of citywide construction and — at least in recent games — huge cost overruns.


Aren’t the 2024 Olympics a decade away?

Yes, but planning for the games is a marathon, not a sprint. Decisions about where to hold the games, and what infrastructure to build, are being made now.

In January, the United States Olympic Committee will select one US city as its official nominee. Boston is vying for that spot against Los Angeles, San Francisco, and Washington, D.C.

Whichever US city is chosen will then compete against other global destinations for the right to host the 2024 games, with the final decision coming in 2017.

Boston’s bid isn’t being put together by the city, or the state, but by an outside group called the Boston 2024 Partnership, chaired by John Fish, CEO of Suffolk Construction. In true Olympic spirit, “Boston 2024 partnership” has its own opponent, No Boston Olympics, a loosely organized group trying to stop what they think is a costly boondoggle.

What would a Boston Olympics cost?

Boston 2024 Partnership has suggested that the cost of a Boston Olympics would be roughly $4.5 billion. That figure hasn’t been independently vetted, and there isn’t a detailed breakdown to assess. Still, there are reasons to think that $4.5 billion is probably an underestimate.


Recent games have tended to cost somewhere between four and nine times as much. The 2012 London Olympics cost nearly $20 billion. Brazil is expected to pay something similar in 2016. And Beijing spent roughly $40 billion in 2008.

What is more, huge cost overruns are relatively common in Olympic history.

Who foots the bill?

Between TV rights, sponsorships, and ticket sales, the Olympics does generate a fair bit of revenue, which can help cover the costs. In recent years, TV rights have amounted to nearly 50 percent of the Games’ revenue, while ticket sales make up 15 percent or less.

But even when all of the revenue streams are counted, it will probably add up to just five or six billion dollars, which is well below the $15 billion to $20 billion cost of recent Olympic Games.

If the pattern holds in Boston, and costs far exceed revenues, the difference will likely be made up by Massachusetts taxpayers. Before the International Olympic Committee will accept Boston’s bid, Massachusetts has to agree to cover all necessary costs.

Would the Olympics spur our economy?

Economists have searched mightily for evidence of economic gains related to the Olympics, but they haven’t found much.

That may sound implausible, particularly if you think of the Olympics as an event that attracts thousands of visitors to stay in Boston-area hotels, eat at local establishments, and spend money all over town. But tourism actually fell during the London and Beijing Olympics, and those who do come are chiefly interested in the Olympic events — which means they’re less likely than other tourists to visit museums or travel to outlying communities.


Two of the leading experts in the economics of the Olympics and other sports mega-events work here in Massachusetts: Victor Matheson at Holy Cross and Andrew Zimbalist at Smith (who shared with me his forthcoming book “Circus Maximus,” which provides a full picture of the costs of hosting an Olympics.) In study after study, these and other economists have found that the economic benefits of the Olympics are either nonexistent or extremely small.

Wouldn’t some spending help modernize Boston?

Sometimes, a deadline can help you focus on the task at hand. Hosting the Olympics has a similar effect, encouraging cities to make long-delayed investments that improve their transportation systems and address other vital needs — before the eyes of the world arrive.

The Boston 2024 partnership has a stated commitment to use the Olympics as a catalyst for Boston’s development, turning the Olympic village into university housing after the games, for example, and using modular architecture to possibly transform a new 60,000-plus Olympic stadium into a scaled-back home for the New England Revolution (read more about possible sites).

Most every Olympic city, however, starts out with prudent and perspicacious plans — only to find them overtaken by more pressing Olympic demands. That isn’t because of limitations in city planning or failures of foresight. It’s because the Olympic process isn’t really set up to meet the needs of the host city. It’s set up to meet the needs of the International Olympic Committee. As Zimbalist puts it: “An eleven-year process of one-upmanship, along with meeting direct demands made by the IOC or FIFA, leads to ever more elaborate and expensive plans.”


Are there any clear benefits?

There are some industries that do benefit from hosting the Olympics, notably the construction industry. For Boston to host an Olympics, we need to build a brand new Olympic stadium, along with a new aquatic center, and a velodrome. Each is a major construction project in its own right, and while cost overruns may hurt taxpayers they won’t necessarily hurt those involved in the construction.

If you’re looking for reasons to be skeptical about Boston’s Olympic bid, consider that members of the construction industry have played an outsized role in the effort. When the idea of a Boston Olympics first came up, the state put together an official exploratory committee (prior to and totally separate from the Boston 2024 Partnership). Both of the expert economists I mentioned — Zimbalist and Matheson — expressed a willingness to participate in that process when informally asked. Ultimately, though, neither was invited to join. Instead, the members were drawn mostly from the tourism and construction industries.

How likely is Boston to get the Olympics?

The decision-making process is quite secretive, but whatever city is chosen as the US nominee is likely to be the international front-runner.

One reason for that is the shrinking interest. More and more democracies are looking at the cost-benefit breakdown and deciding not to participate. The 2022 Winter Olympics may end up being held in authoritarian Kazakhstan because all of the European cities have withdrawn their initial bids.


But the other reason is that TV revenues tend to be higher when the Olympics are held in the United States. Local time zones make it easier for Americans to watch the games, and American viewers are especially valuable to Olympic sponsors, because they tend to spend more money.

Aren’t the Olympics great entertainment?

They are, and it’s perfectly reasonable to argue that this benefit alone outweighs the high cost of hosting. After all, people pay good money to go to football games and soccer matches. Perhaps $15 billion to $20 billion is the right price for three weeks in the international spotlight and the pleasure of enjoying a hometown Olympics.

What happens next?

If Boston is chosen as the official US nominee for the 2024 games, we’re likely to see a broader and more transparent public discussion, particularly since legislators will have to decide to commit taxpayer dollars to cover the likely cost overruns.

If, instead, Boston doesn’t take the gold in this competition, we can still enjoy the Olympics. We can even undertake massive construction projects, if we choose. We’ll just have to leave the 2024 hosting duties to someone else.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz