Smith College professor Andrew Zimbalist, noted sports economist, calls Boston Olympic bid 'crazy'



Last modified: Tuesday, March 03, 2015

A Smith College professor who specializes in the economics of sports is dead set against the proposal by the U.S. Olympic Committee to tap Boston for the 2024 Games.

“I think it’s crazy,” said Andrew Zimbalist, author of “Circus Maximus: The Economic Gamble Behind Hosting the Olympics and World Cup.”

Zimbalist said he bases his position largely on the price tag, which he maintains will not only be bad for Boston, but for the rest of the state as well.

“First, I think it’s going to cost a lot of money,” he said. “Boston 2024 either hasn’t done their research or they are being disingenuous.”

He says the biggest impact on the Pioneer Valley and western Massachusetts will be a hefty bill — and none of the fun.

“We’ll be forgotten,” he said. “For sure, we’ll be forgotten, except as citizens of the state we’ll wind up with some of the tax burden.”

Zimbalist, whose latest book was released Jan. 14, and Evan Falchuk, chairman of the United Independent Party and recent candidate for governor, will lead a discussion about the Boston Olympics proposal at 2 p.m. March 8 at the Florence Community Center, 140 Pine St.

“We need to have a vision of the future that’s focused on the people of our state and how we can make our state better,” Falchuk said this week. “What’s happening with this Olympics bid is that future is being driven by three weeks of sporting events in 10 years, as opposed to what do we all want as citizens.”

Both men argue that the matter should be taken to a statewide referendum.

“There hasn’t been any decision by the Boston City Council or the state Legislature that they want to do it, hasn’t been a vote by the people of Boston or the people of Massachusetts that they want to do it,” said Zimbalist. He contends that the main promoter of bringing the games to the Bay State, Boston 2024, is a group run by private-sector executives who may not have the best interests of the state at heart.

Falchuk, meanwhile, says hosting the Olympics will affect the basic operations of state government. With long-term, in-state spending problems and a concerning state deficit, he said hearing from state taxpayers seems crucial.

“We’ve got what sounds like a $1.5 billion budget gap in this coming fiscal year,” Falchuk said.

On Feb. 8, the Boston Globe, in its review of bid documents, calculated the total cost of hosting the Olympics at $9 billion to $10 billion, without factoring in costs such as upgrading public transportation. Upgrades to public transit are seen as helpful for a successful bid to the International Olympics Committee and operation of the 17-day event.

Bid documents released by Boston 2024 warned that “an accurate estimate into the future can be difficult,” and that “any cost-benefit analysis or specific recommendations as to budget are beyond the scope of this commission.”

Zimbalist noted that Boston 2024 claims public money will not be used in the funding, but the economist said that’s unlikely.

“If there’s a shortfall in any of the intended or hoped-for funding sources, the city or the state has to make that up,” Zimbalist said. “That’s something that will affect the whole state.”

Falchuk has drafted a referendum question that would seek to eliminate taxpayer money as a financing option.

“The Boston 2024 people have repeatedly said that they don’t want to use any taxpayer money, and the referendum that we are working to put together is going to say, essentially, that you can’t use taxpayer money for the Olympics,” Falchuk said. “The reason to have the referendum, the reason to push forward with it, is to make sure there is a degree of protection for taxpayers.”

More than two years after the 2012 Olympic Games in London, Zimbalist said, there is very little evidence that hosting the games left any lasting positive changes. He fears the same fate would befall Boston.

According to Zimbalist, London brought in $3.8 billion in revenue, but spent between $15 billion and $20 billion, creating a deficit.

“You’re supposed to make that up by increasing tourism and other long-term benefits. It’s not clear that any of that has paid out,” Zimbalist said.

He claims trade and investment did not notably increase since the games, nor has participation in sports by British citizens. And while the games are billed as a boon to subsidized housing, in London, the subsidized housing stock decreased afterward.

“So, it’s not clear what the benefit is,” said Zimbalist. “A lot of money went out, very little came in.”

Zimbalist said it’s a stretch to think the games could break even, given the scale of recent Olympics.

“Other places are going to be outbidding us and we’re going to go higher and higher,” he said. “That’s what always happens. If Boston 2024 thinks they are going win, they will feel compelled to do that.”

Zimbalist noted that only two Olympics have truly been considered successful in the books. In 1984, the city of Los Angeles refused to be the backstop for the games, which meant IOC had to financially back them. In addition, Zimbalist noted, organizer Peter Ueberroth restructured the Olympics for the L.A. games, which led to a wave of sponsorships and private funding.

“Those factors came together and they actually had a surplus (of) about $200 million,” Zimbalist said. “That again is a special circumstance that hasn’t applied since.”

The 1992 Games in Barcelona also had a positive impact on the host city. The Olympics were used as the base of a complete infrastructure overhaul. Prior to the games, the city itself had gotten cut off from the Mediterranean Sea by the growth of an industrial zone. Zimbalist said city officials saw hosting the games as a way to reverse that and did so successfully.

“They had this plan from the ’70s for restructuring and zoning their city,” Zimbalist said. “The city plan came first and the Olympics were rolled into that. What happens everywhere else is that the Olympics comes and then the city shoehorns ideas they have into the Olympics.”

Zimbalist said he thinks the lingering financial effects in Boston could be worse than what transpired in London.

Sarah Moomaw can be reached at smoomaw@gazettenet.com.


 


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