London 2012: Has Money Killed The Olympic Spirit?

London 2012: Has Money Killed The Olympic Spirit?

The Olympics is no longer all about sport, but rather a corporate jamboree for the elite super-rich. The same pattern repeats itself every time as host nations are forced to follow the International Olympic Committee’s rulebook.

Ever since French baron Pierre de Coubertin began the modern Olympics in the late 19th century, the International Olympic Committee (IOC) has been run by the world’s economic and social elite.

In 1896, Coubertin gathered together fellow barons, along with princes, counts and lords to run the Games; and not much has changed in the intervening 116 years.

Today, royalty still make up a large share of the 105 IOC members, with Europe’s Princess Nora of Liechtenstein, Prince Frederik of Denmark, Prince Albert II of Monaco, the Grand Duke of Luxembourg and the Prince of Orange all part of the exclusive group.

Away from Europe, a number of IOC delegates too come from royal lineages, including Malaysia’s Prince Tunku Imran, the UAE’s Princess Haya al Hussein, Jordan’s Prince Feisal al Hussein and Prince Nawaf Faisal Fahd Abdulaziz of Saudi Arabia.

But while the other committee members may not be royals, they still expect to be treated like they are, claims Canadian Professor Chris Shaw, the author of Five Ring Circus: Myths and Realities of the Olympics.

According to Professor Shaw, “nearly all of them (IOC committee members) belong to the super-rich, with the odd Olympian and token representative thrown in.”

There are no cabbies, or steelworkers, in the IOC…The Games are put on by the 1 percent for the 1 percent, reflecting growing corporate power and income inequalities. It’s no longer about sport, but about spectacle.

“The opening and closing ceremonies are what everyone wants to see and it costs a fortune to get in. The 1 percent can afford it, but they will get free tickets anyway,” Shaw claims.

And as for the upcoming Summer Games in London, to be held from July 27 to August 12, the IOC can continue to expect extended privileges, both politically and financially.

Specially designated “Games Lanes” for instance have been drawn up on public roads at the expense of the British people who are funding the game through tax hikes. These lanes, which criss-cross the whole of London on public roads, will allow for 4,000 chauffeur-driven BMWs to shuttle 40,000 Olympic officials, bureaucrats, politicians and sponsors between five-star hotels and cordoned-off VIP lounges at arenas. Wealthy tourists too can use them, but only if they purchase £20,000 package trips. 

Additionally, the IOC’s enormous profits from London 2012 will be protected from the U.K.’s taxmen. The committee insists on imposing temporary tax rules on host nations and, when Team GB won the bid, it had to agree to “a temporary exemption from U.K. Corporation Tax and U.K. Income Tax for certain non-resident companies”. The exemption applied to corporate sponsors as well, although McDonald’s waived its right after a massive online petition.

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With most its income derived from broadcasting rights and an aggressive sponsorship programme – which grants ‘The Olympic Partners’, including, McDonald’s, Coca-Cola, Dow Chemicals, Visa and Panasonic, the rights to use the IOC’s trade-marked Five Rings and flood markets with merchandise – the Swiss-based IOC is projected to earn revenues of £2.7 billion from the London Olympics, with the U.K. set to lose an estimated £600 million in tax revenues.

“There’s nothing unique about the way the IOC is operating in London,” says Professor Shaw. “What the IOC demands it generally gets…Otherwise, it will take the Games elsewhere,” he noted.

London Calling

According to Professor Shaw, bidding to host the Olympics is “like the Survivor series, [where] the backdrop changes, but otherwise the product stays the same.”

Durring the bidding process, host cities often understate their initial expected costs, as the true sums, if they were known too early, would cause too much controversy.

The all-time champion of cost overruns of course was the 2008 Olympics in Beijing: It was supposed to have a price tag of US$1.6 billion, but cost a staggering US$40 billion, according to economist Brad Humphreys, an expert on sports economics of at the University of Alberta.

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Similarly, the cost of the 2004 Olympics in Athens was predicted to be at just US$1.6 billion, but ballooned to 10 times that figure, which some analysts now believe to have contributed to Greece’s debt crisis.

And the London Olympics is following the same inflationary formula. In 2005, the British Government promised that the Olympics would cost just £2.4 billion; but that figure soon doubled, then trebled until it was fixed at £9.3 billion in 2007. 

But while that sum remains the official estimate, a recent Public Accounts Committee (PAC) report said that the costs could rise to £11 billion. Other experts, including Jack Lemley, the former chairman of the UK’s Olympic Delivery Authority, place the costs even higher. Lemley believes that the final bill could reach up to £20 billion.

“They always lie by low-balling the figures,” said Professor Shaw. “The 2007 Rand Report on the London Olympics said costs were typically underestimated so as not to scare the public. The report said no one has ever demonstrated quantitatively any financial windfalls from the Olympics.”

“[And] the IOC’s cookie cutter carves out the same patterns at every Olympic Games. There are always massive cost overruns and the PR spin employed to manage the overruns is remarkably similar. The IOC must have a book called Olympics for Dummies with all the stock phrases required of their hosts.”

Professor Shaw first noticed this pattern of flagrant wasteful spending when he was observing the run-up to the 2010 Vancouver Winter Olympics in his home country of Canada.

The IOC back then had complained that it would take too long for athletes to travel between sites and asked the Canadian Government to expand the Sea-to-Sky highway from Vancouver and Whistler at a cost of Can$1 billion. As a result of that project, and several other infrastructure projects, the cost of the Vancouver Games soared from Can$2 billion to Can$6 billion.

“We were spending money like drunken sailors,” said Professor Shaw. “The athletes’ village was a train wreck. The company that bought it was a bit shady and went into receivership so the City took over and shelled out Can$500,000.”

And apart from public infrastructure, another reason why hosting costs have spiralled over the last few games is due to the IOC’s insistence on building new stadia and venues. London for one, had magnificent stadia, such as football’s Wembley, rugby’s Twickenham and cricket’s Lord’s, prior to the games; but these were deemed inadequate and new venues had to be built in accordance with the IOC’s host city agreements. Till today, the £500 million Olympic stadium is still unsold and could turn into another one of the many Olympic white elephants.

”It’s (the need to build venues) a type of blackmail. The IOC technical team visits and makes ‘recommendations’, which are really orders. If you don’t commit to doing them, the chances of your bid winning are slim,” said Shaw.

Post 9/11, the IOC’s paranoia over a potential terrorist incident has also driven up security costs.

At the London Olympics, over 13,500 soldiers will be deployed throughout the city, which is 4,000 more than those already deployed in Afghanistan. An aircraft carrier will also dock on the Thames and surface-to-air missile systems will scan London’s skies. RAF Typhoon Euro-fighters will fly from the RAF Northolt base, while a thousand armed US diplomatic and FBI agents and 55 dog teams will patrol an Olympic zone partitioned off from the wider city by an 11-mile, £80 million, 5,000-volt electric fence.

London has not seen military and security forces on this scale since the Second World War.

“The costs of security always rise massively on initial estimates. In Vancouver (for the 2010 Winter Olympic), it went from Can$175 million to a billion. The IOC are terrified of all eventualities. If they think there’s a danger of a paleolithic dinosaur emerging from the Thames and eating the prime minister, they insist on a contingency plan for that,” said Shaw.

“The other side is that security firms are pushing their agenda in the same way that real estate firms drive the initial Olympic bids. The military, and especially the police, will get Christmas stockings full of new goodies, such as quiet equipment, armoured cars and sound devices,” Shaw added.

Accordingly, the U.K.’s spending on security has followed the familiar pattern of cost underestimates, accompanied by steep price hikes. Locog (the London organising committee) recently decided that it required 23,700 security guards, far more than its original estimate of 10,000. As a result, security costs have roughly doubled from £282 million to £553 million.

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See also: Sports Industry: The Economics of the OlympicsSee also: GDP and Olympic Medals: What is the Relationship?See also: Infographic: A Brief History of the Olympic Games