Olympic Decision Tomorrow: Say No to Tokyo

The day has come. Tomorrow, the International Olympic committee will meet in Copenhagen to decide which of the four finalist cities – Chicago, Rio de Janeiro, Madrid, or Tokyo – will get the dubious honor of hosting the Games of the XXXI Summer Olympiad, better known as the 2016 Summer Olympics.

Obviously, each candidate city has spent years and millions of dollars already in an attempt to snag the Games, in the process making more and more promises that are almost certainly unachievable. (Tokyo budgeted $48 million for bidding alone, with $27 million of that explicitly coming from the metropolitan government.)

In this respect, the competition to get the Olympics is quite a bit like a political campaign: even if one of the candidates wanted to be up front about it and make a case, the process drags everyone involved down into the muck of disingenuous myopia. Once the bids begin, candidates go for the gold no matter what the costs – appealing in a sprinter, less so in a government. After all, the whole point of hosting the Olympics is to benefit the host city and environs in one way or another, right?

On Friday, the contenders are pulling out all the stops. In addition to the wining, dining, and wooing of the IOC that has already taken place, big names will be on hand to pitch for their respective cities. For Chicago, President Obama announced last week that he would join his wife, Michelle, in Copenhagen to make the case, even as protests heat up in the Chicago itself and fewer and fewer respondents to polls say they really want to see the Olympics in their town. For our own Tokyo, new Prime Minister Yukio Hatoyama will make the case in what the media here have been entertainingly, but ridiculously calling “Hatoyama vs. Obama.”

First, let’s set aside some of the hogwash about what the Olympics actually represents. The sports? The Olympics is the premier competition for sports that, great as they may be, are otherwise small-time spectator events. Huzzah for track and field athletes, badminton players, swimmers, and competitive preteen gymnasts. For all the IOC’s blather about sportsmanship and global community-building, it’s hard to see that the Olympics is superior in any way to regular team sports leagues in this age of the NBA making a mint in China, Japanese stars breaking MLB records, and the seemingly unending permutations of professional soccer events at the club and national levels. Not to mention that the Olympics seem to bring out more jingoism and ruthless focusing on medal counts than any kind of sportsmanship or competition. (Canada, host of the next Winter Games, for instance, has just barred foreign athletes from training with Canadian coaches or training in Canada, so that said athletes will provide less competition for Canadian athletes, who will then have a better chance at winning more medals. Huzzah for international cooperation!)

Sportsmanship and values? I could see believing this if you were at an age when Santa Claus was still a motivation for good behavior. The Olympics has been just as beset by allegations of doping and other forms of cheating as any other sporting event outside of those that are openly fixed (pro wrestling), known to be fixed to all but the most die-hard wearers of blindfolds (sumo), or pretty much center themselves on the fine line between doping and not doping (bodybuilding, if you want to call it a sport.)

And that’s just in the events themselves! The process behind Olympics is far shadier. If you think the bribing of IOC officials with cash and hookers was a one-off in the vice den that was Salt Lake City in the late ’90s, I have some WWE bets I’d like to discuss with you.

It’s that last point that concerns us here. What benefit is there, really, for a city hosting the Olympics?

To be fair, hosting the Olympics probably makes sense as an image booster or branding exercise. This is especially true for the smaller cities that usually host the Winter Games and is easy to understand for bigger cities that need the boost, too. For most of the 20th century, this boost to big towns was probably the case: Berlin in 1936, when Hitler showed off the new Germany, risen from the ashes of the Great War; Helsinki in 1952 in the same boat – showcasing its and Europe’s recovery from World War II; Melbourne in 1956, breaking onto the world stage; even Tokyo in 1964, showing off Japan’s impressive recovery, the next phase in the modernization and integration into the wider world that Japan had been undergoing since the Meiji Restoration. What is harder to understand is why big, well-known cities would want to blow the cash and invite in the headaches of the Olympics when they stand to gain very little.

So, should the Olympics come to Tokyo, what’s in it for the city?

On the positive side, a miasma of pablum about sportsmanship. The branding and profile-raising aspects are moot. Tokyo is easily one of the best-known cities in the world. Beyond that, it’s known for being modern, safe, and a great international capital of business, culture, fashion, technology, and more. The idea that the Summer Games will suddenly bring a flood of investment or waves of attention that will improve Tokyo’s lot is hard to defend at best.

The primary and greatest consideration is the one easiest to quantify and the one that casts a shadow over every decision made by a government, especially by a government in Japan after the burst of the economic bubble. We hear about the problems every day: the declining birthrate, the aging population and the attendant pension fiasco, widespread underemployment, feelings of economic and professional insecurity, ever-increasing debts, and more. Tokyo, with its continued growth and centrality to business and politics in Japan, might be all right, but it has already sent revenue out to less well-off municipalities and hosts a central government whose debts are approaching 200% of GDP – a scenario that is not looking any more rosy these days.

What all of these problems have in common is that they do not yet benefit from a solid solution and they will all certainly cost money. Lots of money. By some estimates, more money than we will able to pay, for it is, after all, all of us paying taxes who will have to pay larger and larger amounts, especially if we’re not set to retire just yet.

The only thing the Olympics are sure to bring is debt. In short, even if Tokyo really wanted the Olympics (and why anyone with accurate information would want them is confusing), the city could not afford them.

The Olympics, especially the larger, costlier Summer Olympics, are a government-funded enterprise. Yes, there is plenty of nice talk about private investment covering large portions of the costs, but this is purely for show.

To wit: Right after claiming, “If Tokyo is selected to host the Games of the XXXI Olympiad in 2016, the OCOG budget will be financed entirely through private sector funds,” Tokyo’s bid states:

TOKYO 2016 is confident that the financial robustness of the future OCOG will prevent any deficit. In addition, the Governor of Tokyo has made a solid commitment to cover any deficiencies that may occur in the OCOG budget. The Tokyo Metropolitan Government will provide a guarantee with the Candidature File in the next phase.

Furthermore, the Prime Minister of Japan promises total support with regards to the staging of the Games of the XXXI Olympiad including the financial support.

In other words, “The Organizing Committee will raise some money, but don’t worry, we have the city and the government on the hook for whatever it actually costs.”

In fact, the Tokyo Olympic bid opens by touting the city’s pecuniary hardiness, pointing out that Tokyo’s 2007 general accounts budget was $57.409 billion and that the special accounts budget was $38.279 billion (at ¥115 = $1.) All well and good, but the intent is clear: the government is willing and able to spend a lot.

Now, this is all boilerplate so far. Every candidate city states that the relevant governments will back up its miraculously privately-funded Olympic Committee and, in reality, every relevant government does end up paying, usually a lot more than it expected to.

Tokyo’s case gets more and more problematic, though.

First, the budgeting process.

No Olympics has ever made money. None. Now, we’ve all heard reports of how much a city made, but there is one important caveat: none of the big costs – infrastructure, venues, security, transportation, utilities, etc. – are included in the OCOG budget.

That’s right. Olympic committees show wonderful gains for their cities by not counting any expenditures beyond their own operating expenses.

The TOCOG’s total budget? $3,115,252,000.

Surprised? You should be – that’s only one-sixth of what London is officially set to spend. No wonder they talk of private funding – all of their spending is set to be done in bringing the Games to Tokyo and managing their own office. Once the real heavy spending comes into the picture, we, the taxpayers, get to take over.

So how much do they say it will cost us?

Well, that’s harder to answer succinctly. The bid projects $13,127,581,000 in necessary capital investments, which is telling as the breakdown assumes no capital investment necessary for a number of venues – from the 1964 Olympic Stadium, which will almost certainly have to be rebuilt (according to the IOC, in addition to anyone who’s seen it) to the as-yet nonexistent venues for some marine events.

The cash flow projections show bank loans of $27,778,000 annually every year from 2010 to 2017 (at ¥108 = $1), which combined with other financing will provide for the $2,327,579,000 in projected operating cost outflows for 2010 through 2017.

So, we can take the bid as saying it will cost roughly $14,194,537,000 for the Games themselves, plus the $48 million for the bid itself, which makes. . .

US$14,242,537,000

. . . which is a little over $1,114 per resident of Tokyo, in addition to Tokyoites having to spend a lot on tickets and merchandise in order to add enough to what the tourists will spend to make it work out.

(For those who are interested, the large pdf of Tokyo’s bid plan can be downloaded from the official Tokyo 2016 site. All costs are estimated in yen and converted to US dollars at the rates specified. I used USD here for the purposes of comparison with other cities.)

Is that figure believable?

Well, first, remember what that includes and doesn’t include. Pretty much all of the hidden or tangential costs are treated as irrelevant. The TOCOG has arranged free use of public transport for people with tickets to events at the Games as well as guarantees for reimbursement of hotel prices that exceed a set maximum, price gouging that may occur, and more.

There should also be some skepticism directed toward the claim that revenues will exactly match TOCOG expenditures. Those revenues also include $85.7 million in “donations” and $814,822,000 in ticket sales. Now, either tickets will be hugely expensive or a lot of people are expected to attend events (or at least buy tickets.) My guess would be that the TOCOG, having cited “high interest in sports” as one of Tokyo’s attractive points, is doing what previous host cities apparently did, and is acting on the assumption that every ticket available will be sold at whatever asking price is set. Anyone who has attended large sporting events in Japan knows very well what is likely to happen: events with well-known Japanese competitors will be packed, other events will quiet. Tokyo might have to add tumbleweed clean-up to the budget. Despite the fact that the host country is expected to compete in every event, events in which the Japanese entrant is unknown will be up against events in which Japan has a higher profile. No competition.

Heck, there won’t even be baseball or softball.

Skepticism is also appropriate to any aspect of an Olympic hosting bid considering the enormous discrepancies that have existed between previous bids and the actual costs of the events, even without correcting for the preposterous bookkeeping that has stadia, security, and expenses born by government as somehow not counting toward the cost of staging the Olympics.

London, for example, more than tripled its initial projections of just over $4.8 billion to nearly $14.9 billion in 2007, and is now expected to spend well over $16 billion – and that’s just what they’re admitting to. You can bet your Granny’s teeth there’s still a good bit of fudging going on.

Beijing spent at least $58.5 billion. Officially. Which is to say it was probably a lot more.

Now, we could say that Tokyo was somehow more transparent, more trustworthy; that the Japanese government and a panel here would not engage in such shenanigans (more than they already have), but. . .

(Take some time to laugh that off.)

In fact, looking back, every host city has had cost overruns and every host city has lost money. The Olympics is a loss leader. This could make sense for, say Tokyo in 1964, when the city had something to show the world and the Olympics provided a good stage, but it makes no sense for Tokyo now.

Readers who have been in Tokyo recently might have noticed TV ads showing dirt schoolyards turning to lush lawns a la British public schools and other wonderful improvements that we will supposedly see if we get the Olympics. The question, of course, is: If those things can be done, why aren’t they being done?

Is having decent school facilities a reward for supporting Gov. Ishihara’s vanity project the Olympics? Or are we supposed to believe that unlike every other city that has ever hosted the Olympics, including Tokyo itself, somehow, some way Tokyo in 2016 is not only going to spend less than Athens in 2004, Beijing in 2008, or London in 2012, but also make more money? Not only make more, but be the first city to ever turn a profit off hosting the Olympics?

Believe it if you want to, but do see me about those pro wrestling bets.

Other Factors

Money is a major consideration, of course, even the main consideration, but it is not the only consideration. Despite the TOCOG’s claims that many or most of the Olympic facilities are already in place, anyone who sees those or who knows what the IOC asks for and invariably gets, knows that this is not the case.

In fact, in its most recent evaluation of the four candidate cities, Tokyo received a lower score than expected, partially due to the fact that many of the proposed venues were not only not ready to go, but would have to be rebuilt.

Was the 2002 World Cup not a lesson? Are there not state-of-the-art soccer stadia sitting largely empty throughout the land? Does Tokyo need another stadium, which will sit empty as there are already too many large facilities of the type sitting around and growing obsolete?

What Tokyo needs is green space and a plan for the future that is not centered on paving and building more. As it stands, the TOCOG proposes building Olympic facilities in one of Tokyo’s exceedingly few places with grass people can walk on – Yoyogi Park. Yoyogi Park may be big by local standards, but it is not so big or so empty that the construction of a large professional sports venue in it would not destroy the place.

The Olympics will mean massive construction, which will be a hassle. After the Olympics there will be even more unnecessary, underutilized behemoths dotting the skyline. This is not only a waste of money, but makes the city uglier. This has happened in Japan before. In January 2004, on my first trip to the City of Nagano, I surprised to see temporary stages with the 1998 Winter Olympic logo still up, unused, looking shabby, in the center of town.

The Greek government is struggling to deal not only with debt related to the 2004 Athens Olympics, but with the problems surrounding the veritable ghost towns that have sprung up – crime in abandoned stadia and the like. Sydney had grand plans to turn the 2000 Olympic Village into housing. Hasn’t happened yet.

All of that construction will add to existing traffic problems, putting even more strain on the city’s infrastructure.

Then there are the human rights issues. Beijing supposedly forcibly evicted, sometimes without compensation, at least 1.5 million people in order to make way for Olympics-related construction. Seoul did the same to as many as 800,000. Sure, those were both dictatorships, but similar accusations surfaced in Atlanta – massive eminent domain claims, insufficient compensation, cursory legal proceedings, if any.

So much for that Olympic spirit.

Should we not expect such problems in Tokyo? The bid is centered on an are around Tokyo Bay, east of Haneda – an area that is largely industrial and low-income. How will those relocations be handled? What of the people who don’t want to leave their homes to make way for the Coca-Cola Presents Super Global Hand-holding Olympic Food Court, or whatever winds up there?

Above all, though, is the manner in which the TOCOG has handled this bid. To be fair, they have not done anything other cities didn’t do, but that’s precisely the problem. The entire process of bidding for the Olympics is a lot like the propaganda of the Games themselves: rife with misrepresentation, simply omitting anything unpleasant.

The budget is not at all reflective of the actual costs of the Games and the proposal paints a picture inconsistent with reality on the ground.

Perhaps the most heartening thing about all of this is the most significant reason the IOC rated Tokyo more lowly than the city expected: only 55% of respondents wanted to see the Olympics come to their city – twelve points lower than Chicago, 27 points lower than Rio, and 29 points lower than Madrid.

Given the way the rest of the bidding process is handled, even that 55% is probably bogus. (If any readers out there have been able to find methodology on the polling, do let me know – some of those in Chicago opposed to bringing the Olympics there, have been saying the polls there were very much like the old party machine elections there.)

So, while it is far too late for this missive to make any difference (as if it would have anyway), let the Obamas and Hatoyamas have a good time in Copenhagen, but give the Olympics to a city that might benefit (viz. Rio), or to a city whose people really want them (Rio or Madrid, on the assumption that any city’s polls are valid.) Don’t give them to Tokyo – nothing good will come of it.

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