Olympics, Tokyo, NPR discussed on The Indicator from Planet Money
N. p. r. this the indicator from planet money. I'm stacey vanik smith. The olympics is wrapping up this weekend and this has been a strange olympics. Nobody in the stands kovin spreading through the olympic village protests in tokyo while. I'm in my tiny tiny hotel room which I can't even stretch my arms out to yoga in the hallway. It's only a few steps away. it's It's very very tiny. Our own mandalay. Del barco has been reporting on the olympics for npr from tokyo. It's been very interesting and strange and kind of humbling to be here as a journalist as well. There's not a lot of us here kind of a lonely olympics. I should say mandalit says these olympics have also been marked by all these protests a lot of them over the cost of this olympic games which is one of the most expensive olympics on record. I know cost a lot to put these Olympic games on and the some of the venues were or the venues were paid for by tax dollars here in japan largely so i think there was a lot of feelings about that but here tokyo is in the majority cities that host the olympics. Almost always lose money on it. So why did they do it today. On the show we take a look at the costs and benefits of hosting the olympics. Right after the break this message comes from. Npr sponsor fund rise making investing in private real estate as easy as investing in stocks bonds or mutual funds build a more diversified portfolio today at fundraise f. u. n. d. r. i s. e. dot com slash indicator. This message comes from npr sponsor capital one capital one auto navigator can help you find a car get prequalified instantly and see your real monthly payment without impacting your credit score capital one. What's in your wallet. Terms and conditions apply more at capital. One dot com slash auto navigator. We're joined by kenneth shropshire. Ceo of global sport institute at arizona state university and victor matheson professor of economics at college holy cross in massachusetts. So victor let's start with you. How much did the summer games cost. The olympics in tokyo were hugely problematic from an economic standpoint way before kovin hit so they originally had a price tag of seven point. Three billion dollars. That's a lot of money just to start with. But those numbers had risen to fifteen and a half billion dollars officially and over twenty five billion dollars. Unofficially by december twenty nineteen so before a single person in japan ever got sick from cova. Did we already had an olympic games that we were looking at a twenty five billion dollar price tag and there's just simply no way that the money amount of money generate from the olympics can possibly cover those sort of classes. Okay kenneth. i'm gonna throw this question to you. Which is i think the question that always comes into my head about the olympics. Why does anyone want to host the olympics. This is extenuating circumstances but it seems like almost every single city that's ever the olympics has lost money sometimes. There are like political issues that happen. I mean why does anyone want to host the olympics. Chroma sofas devil's advocate. I love it. Devil's advocate but it is the or of that brings to your community. It's what it brings to your city. You are mexico city in nineteen sixty eight. And you want the world to know that. Latin america's a place to go to your tokyo and sixty four where maybe it made more cincinnati does today and you wanna know twenty years after world war two. This is a city. This is a country that part of the global community. If you're los angeles in eighty four. We're not just hollywood. Were part of the pacific rim. So it's so it's big issues like that and it's infra cities who are the ones had been on this. It is like building infrastructure. It's like building roads and highways and parks. And the like but this is this is not a mutual fund where there's a return on investment and victor. What is your take on this issue. I mean from what i understand. It's very rare for cities to be able to make money on the olympics. I think one of the few was los angeles in nineteen eighty-four right so first of all los angeles was just a very remarkable and unique situation. And what had happened. There is that los angeles was left as the only bidder. Back in one thousand nine hundred four for the games and when you're the only bidder of course you can dictate the terms of the bid to the i o c. Rather than the other way around and so they said. Hey we'd we'd love to host the games but we're not building new facilities you can use the rose bowl you can use the coliseum. These facilities that even then we're already over fifty years old and when you do that you can really keep those costs down. A worth of the info four olympics in my youth. I ran the sport of boxing initially sponsorship in licey. yes. I did sponsors licensing. I am forced gulf so. La was that unique situation. Ironically there was one city that was still bidding theron and that was during the hostage crisis so wisely there was the decision. Well we will include them in this conversation and so la have this tremendous leverage. Is there a kind of kenneth mentioned. Is they're kind of like a softer sort of pay off. I mean is there like a payoff in like maybe not right away but in like visibility for your city long-term tourism on the answer for that is yes and that's of course what we call the legacy effect right and you can have a couple of kinds of legacy here number. One part of this is actually real infrastructure. You you make your roads better and you build your airport. Expansions and and both greece in rio have expanded subway systems. Thanks to the olympics. And then there's that lasting there's that intangible thing about becoming a major league city right or putting you're sitting on the map but even there requires a very unique situation. I think the best two examples of this. We have our barcelona which was kind of in the shadow of madrid and lesser known as a tourist destination it was about tenth or twelfth in in europe in tourist destination before the early nineteen ninety s After the olympics it's jumped into the top five and tourism in europe and so there's a good example Salt lake city also following the olympics. Ski visits to utah. Significantly outpace ski visits to colorado. So there's some legacy effect that you're getting out of these things. Are you guys going to be watching the olympics. I'm a big fan. I have devolved away a little bit. I was caught up old enough. Where the medal. Count things a big deal and we get more this. This media presentation the athlete back story than we had in the past. And you got so many options of ways to watch the good or bad thing now is you can almost watch every event if you want to as opposed to just wait and see what. Abc would share with you on a given day again. Some of these great powerful moments that you get from sport. That again is worth something. But the question is whether it's worth twenty five billion dollars. This episode of the indicator was by julia. Richie engineer huxtable. It was fact checked by michael Our editor is kate coyne cannon and the indicator is a production of npr and the results are in so on friday. We had a little contest. Family feud style on indicators of the week and had alone jacob goldstein. Mary childs and robert smith and me. We all competed to see who would win. the prize. for indicator of the results are in. Check him out on our twitter feed at the indicator or on instagram at planet money..