Some recent conversations and thoughts have prompted a full diary. I hope it is an informative and interesting read.
The Museo Nacional in Rio burned down last night, destroying untold numbers of art and antiquities. I felt an indescribable sadness watching the building burn, and seeing the wreckage today. I feel deeply for the people of Brazil, and what they’ve lost. It is an utter tragedy.
The disaster will prompt a needed discussion about the Olympic Games, and how they are funded and managed. It may be too early to draw a direct parallel, but there is no question that public services in Rio are dramatically underfunded, and a lot of this is the heritage of the $12-$20 billion costs associated with the 2016 games. So it has me thinking about that, and about the one case study that might provide a lesson in how to make the Olympic Games a benefit for their host cities, and not a burden.
What’s wrong with the Olympics?
The Olympic Games are great, fostering international relations and camaraderie. But they come with a horrendous price tag — billion and billions of dollars to provide the needed facilities, housing and transportation.
Host cities/nations usually end up regretting their bids. The thing is, we can understand the allure. There’s a promise that private and public money will flood into a city, helping fund public facilities and infrastructure that will have long-lasting benefits.
This is an amazing concept — what if we could take a city like Rio, which struggles to meet its financial obligations, and use the Olympics as a means of offering the residents subways, affordable housing, public parks and sporting facilities? It’s a sort of progressive concept, really — let rich nations fund these things for a poor nation, and everyone wins.
But this dream is never realized. (Well, once, and we will get to that). Host cities are almost always left with massive debt, and a bunch of facilities they can’t maintain and which serve little use. Here are some highlights from the past. Get ready to slap your forehead, or gag a little:
1. Rio 2016: On the day the games started, the 2016 summer games were estimated to cost $4.6 billion, up from the $3 billion estimate that Brazil agreed to in their bid. Well, $4.6 would have been nice — the final official cost is estimated at $13.1 billion. Highlights from this mess include the aquatics stadium, which today sits rotting and empty, and the soccer stadium, which today sit rotting and empty, and thirteen high rise towers, which were planned to be converted into housing, but which have become abandoned slums.
2. Sochi 2014: Honestly, Russia can get bent...who cares if they pay through the nose? But I would rate this as perhaps one of the biggest Olympics fiscal disasters in history. The games cost...lord...$50 billion dollars. Why so expensive? Because of course Putin and his criminal friends stole it all. At least $20 billion is thought to have been funneled into Putin’s pockets.
3. Athens 2004: Like Rio, Athens invested billions...about $11 billion. And within five years half the facilities are derelict, and ten years later all of them were falling apart.
The story repeats itself time and time again — a city agrees to host the games, they are straddled with far more costs than initially estimated, and taxpayers end up footing the bill for literally decades...usually to pay for facilities that are only benefitting weeds and toxic molds.
But it doesn’t have to be that way
In the diaries about the Museo Nacional fire, there was a lot of justifiable criticism aimed at the Olympics. The games are, as I’ve outlined, a bit like rich hipsters borrowing your house for a weekend party, and then draining your bank accounts to pay for things used to make a gigantic mess of it.
But in all of the cases of Olympics mismanagement, corruption and bad fiscal decisions, there is one modern example that demonstrates that we can, as a global society, have Olympic Games and simultaneously protect the interest of host city residents. And that example is the 1984 Los Angeles Summer Games, which turned a profit and were used to benefit Los Angelenos for decades...and still today, actually.
The Story of the 1984 Games
No city wanted the 1984 games. In addition to the burdens of hosting them, international relations were not at a high point. The bids were due in the late 1970’s, in that era of runaway inflation, stagnation, and poor relations with the Soviet Union. L.A. was the only taker.
Los Angeles agreed to the games, and perhaps because the city was the sole bidder it was able to establish some ‘ground rules.’ Starting with the core, fundamental rule that modern games need to consider in order to be successful:
Rule #1: No public money should be used for the game. They should be privately financed.
A man named Peter Ueberroth was assigned President of the Organizing Committee in summer 1980, and he was tasked with a primary challenge: hold an event that was entirely privately financed. Without the promise of government funds to cover and shortages, there was a pretty big incentive to ensure there were none. Ueberroth formed a committee of over 150 local business leaders to formulate ideas on how to make the games affordable, and they took to task at solving the various tricky issues associated with that.
Early on, they came up with a second rule for a fiscally successful event:
Rule #2: Use existing facilities, and avoid building new major venues
To hold a games on budget, Los Angeles leveraged every existing facility where it would prevent the necessity for a new one. This involved, again, strong-arming the international Olympics committee, which always wants a slate of shiny new stadiums. In 1984 they wanted Memorial Coliseum to be completely rebuilt...which probably meant tearing it down and constructing an entirely new facility, presumably on the same location. (??)
Instead, Los Angeles demanded that the Coliseum remain, and that money instead be used to renovate it and to build museum facilities in Exposition Park. They would also use all of the other existing sporting venues, like The Rose Bowl, the Forum, Dodger Stadium, and even some non-sporting venues like The Hollywood Bowl. As a result, the city benefited from the third rule:
Rule #3: Spread the games out
Not every host city is a sprawling suburban utopia (dystopia?). Los Angeles was unique in this regard, but most other cities could follow this rule to some degree. L.A. spread the games out, from downtown to Westwood to Pasadena to Inglewood. Even up to Santa Barbara.
This received significant pushback from the Olympics at the time. They want the athletes and events all clustered into a small geographical footprint. Which is part of the problem — in cities like Rio, this leaves behind an abundance of facilities in neighborhoods that don’t need them and can’t afford to maintain them.
And in the process of spreading the games out, the Los Angeles committee landed on a fourth rule that led to a successful event:
Rule #4: Think about the long term
Ueberroth understood that the event would bring a lot of money and construction to the area, and one of his strokes of genius was the idea to really think about how those facilities could benefit the city in the years following the event.
One idea that has produced long-lasting events was to spread the smaller venues out to Los Angeles universities. A major school would be able to use and care for a facility in perpetuity. UCLA got the Los Angeles Tennis Center, which is still in use today. Pepperdine got money to renovate their swimming facilities, still in use today. USC got the Olympic Swim Stadium, which was particularly brilliant because it was designed so that the later-unnecessary seating could be removed to make room for a campus fitness center. (Trojan here: many hours spent benefitting from those facilities, perhaps most noteworthy the annual ‘freshman plunge,’ in which the cinema school airs Jaws while freshman sit in inner tubes in the diving pool.)
Likewise, the long term was considered when planning athlete housing. Instead of one giant Olympics village, the games broke the housing up into three villages at USC, UCLA, and UCSB. The housing was designed to become dorms after the games, and most of these facilities still house students today.
This longer-term thinking helped to ensure that the investment was worthwhile, because...duh...it turns out that if you plan to use a building for fifty years, it’s more cost effective than using the same building for three months and then mothballing it.
Rule #5: Cities should profit
Another innovation of Ueberroth was in strong-arming the Olympics (and everyone) into sharing film and television rights with the city. And you know what? This is Hollywood, baby, and we always keep a piece of the action...ha. But Ueberroth demanded and got desirable contracts, which ensured that if the city drew viewers, it would also draw dollars. And it worked. This is a land of showmanship, and they put on a show. Everything down to the color palette was decided on in order to help draw viewers. And in summer 1984, Los Angeles exploded onto TV sets around the world in vibrant technicolor. I’m not sure what they did about the smog...it was really bad back then, ha.
But this is a concept that should probably apply to all games. Host cities should not only voice being plundered directly, they should avoid being taken advantage of by media companies making a quick buck and contributing nothing in return.
In 1984, Los Angeles negotiated strong television rights, and that generated a lot of the profits that are the legacy of those games.
How the games went
Most who remember those games know that they are a sporting success story — it was a great event. And in a time of international uncertainty, even if Russia was out, they probably helped foster better relations.
But what many don’t know is that the games were a financial success story. The city turned a $225 million profit. And because of the foresight of the organizers, that profit wasn’t all spent immediately — most of it was set aside to form a foundation that was designed to benefit the city in perpetuity.
LA84 and the heritage of the 1984 Games
It has been over 34 years since the Los Angeles Summer Games shuttered their doors and the last athlete out took one look back over their shoulder as they boarded the bus to LAX. And yet, in what is the even more remarkable success story of this event, the 1984 games are still benefiting Los Angelenos.
Yes, a lot of the ongoing benefits stem from the facilities...mostly just renovated in 1984, but in ways that gave them years/decades of enhanced use. But there’s also the money. Because those profits from the games established a trust that is managed by The LA84 Foundation. This foundation provides ongoing grants to help improve sporting facilities in and around the city, as well as grants to help encourage and foster sporting activities for kids.
In the 34 years they’ve been operating, LA84 has provided over $250 million in grants to improve public sporting venues in Los Angeles. On the 30th anniversary of the games, they announced a $10.5 million grant to renovate John Ferraro Athletic Field in Griffith Park, which offers four full-size soccer fields for local schools to use. (Part of the renovation was to convert to artificial turf, out of concern for sustainability).
Additionally, every year the foundation releases a package of grants for childhood sporting programs. In May 2018, LA84 released $1.8 million in funds, slated for:
- $25,000 to the Sloane Stephens Foundation, for tennis instruction and activities for Compton elementary schools.
- $400,000 for LA’s Best, which provides after school sporting activities for 198 L.A. Unified schools.
- $125,000 for Students Run Los Angeles
- $500,000 for Beyond the Bell, after school sporting actives for area middle schools.
- $150,000 for YMCA of Metro Los Angeles for sports actives.
- $150,000 for the SoCal Tennis Association to promote tennis in urban communities..
All told, LA84 has supported over 1,100 youth sporting organizations, helping Los Angeles kids have the means to play and compete. They are also the largest supporter of the U.S. Olympic teams...those athletes in Rio benefitted from LA84 helping provide the largest source of funding to get there.
What’s the point of this diary?
Yesterday, the national museum of Brazil burned, and I am absolutely heartbroken about that. I think it’s reasonable to partially blame the mess created by the Olympics. But while I’m sad about that, it also made me think about the success story of the 1984 games, which I wanted to share.
I think there are a lot of lessons to take from those games. I think it shows that public and private entities can work together for mutual benefit. It shows that taxpayers don’t have to (and should not) shoulder the costs and risks of the games. And it teaches that if smart, dedicated people are put to task, there are ways that a city can host an Olympics and come out ahead.
And yeah...Los Angeles is hosting 2028, so we can put all of these rules and ideas to the test once again. I think it’s going to be pretty great.