The curse of sporting gold

Link: Profile: Olympic FD Neil Wood

They should have been the Olympic Games best remembered for Nadia Comaneci’s perfect ’10’ score in the gymnastics. Or Alberto Juantorena and Lasse Viren claiming two track golds each or, at a push, Britain’s pentathletes taking gold.

Instead, the 1976 Montreal Olympics have gone down in history and infamy as the perfect example of how not to run a global sporting event. The ‘Billion Dollar Games’ left more recriminations than memories, empty pockets and a whopping great debt for the Montreal taxpayer.

Originally budgeted to cost $310m (£129m), the final bill for the Montreal Olympics came in closer to $1.5bn, almost five times more than the estimated budget and 21 years behind schedule.

The cost mushroomed largely due to the design and build of a new stadium. By the time building work finished, Moscow and Los Angeles had hosted their Olympics and Seoul’s was just a year away.

Left with a debt that would make even Parmalat bosses do a double take, the Canadian authorities raised taxes and a national lottery was used to clear the books ð a mammoth task to this day still to be completed.

Montreal has cast an Olympic-sized shadow over any city that bids for the games. Every subsequent bid is now judged with the spectre of Montreal, and the worst-case scenario, in mind.

But the organisers of London’s 2012 bid – which coincidentally involves the building of a new athletics stadium part-funded by a national lottery and direct taxation – ðare confident that any games held in London will not suffer the same fate.

The bid’s launch last month was accompanied by positive noises from the prime minister, former Olympic stars and small businesses in East London, the area that would be regenerated should the bid be successful.

Its focus on London’s status as a world-class city, its diversity, the existing sports facilities and plans for regeneration of a run-down part of the capital are all part of what one person involved in a previous bid referred to as the ‘bullshit’ phase.

The cost of hosting a London games has been set at £2.4bn – so far – and forecasts suggest London will follow Barcelona 1992’s example where previous no-go areas of the Catalan city received a grand makeover and its image was subsequently transformed. But even Barcelona struggled to break even.

But it is not just the shadow of Montreal that hangs over any city bidding to host the Olympics. It is an understatement to say that hosting a successful – and a financially viable – event is no easy task. The stark truth is that very few cities have succeeded in making a fiscal success of the games. Los Angeles 1984 is widely considered to be the last Olympics that made a profit. Many of the Olympics’ true financial position are shrouded in secrecy. Some figures suggest that Sydney broke even, others that it lost £1bn.

Calgary, Albertville, Lillehammer, Nagano, Atlanta and Sydney have recorded losses and attracted plenty of criticism. Japan’s hosting of the 2002 World Cup and our very own Sheffield with its disastrous 1991 World Student Games, which chalked up a loss of £15m, also join the list of shame.

And later this summer, Athens is widely predicted to join these ranks. Its original bid suggested that the games would cost £1bn. But estimates have since been revised with one more recent figure putting the cost at anything from £6.5m to £10bn, 90% of which will come from the public purse.

So, should London pack up its bag before the race has begun, much in the style of one of our ‘brave’ middle-distance runners who trail in outside the medals when competing with their world-class rivals?

There are success stories to be heard, and those behind the London bid won’t have to look far for inspiration – the 2002 Commonwealth Games in Manchester. ‘There’s only Barcelona and us, I would argue, that have really made a success of staging a games and making it work,’ says Martin Kelly, head of policy at Manchester City Council.

With a budget of £250m, Manchester’s effort was certainly smaller than London’s, but holds lessons nonetheless. A report by consultancy firm Cambridge Policy Consultants (CPC) last year concluded that the 2002 games had left a powerful economic legacy.

It has successfully regenerated the run-down eastern part of Manchester, creating 6,100 full-time equivalent jobs, attracted companies such as Fujitsu and Wal-Mart and prompted something of a housing boom, something never previously seen in that part of the city.

‘There was no housing market in east Manchester before the games,’ says Kelly. ‘There is now a market. Things are looking good.’

Pittsburgh University is now rumoured to be considering setting up a British base there. Even the stadium used for the games has another use – as the new home ground of Manchester City Football Club.

A further survey currently being undertaken by the council seems to add weight to the economic advantages outlined in the CPC report. And despite considerable public sector investment in the games, council tax bills have not been directly affected. ‘Manchester council taxes have been among the lowest in the country. There have been below inflation increases,’ says Kelly.

The trick in Manchester’s case, says the amiable Kelly, was not to raise expectations too high: ‘We pitched it at a certain level.’

The council also took a long-term view and saw the Commonwealth Games as part of a 10-to-15-year-long regeneration project.

Holding onto expectations in London’s case may be harder. The omens suggest that 2012 will not be London’s year, currently the bookies’ second favourite behind Paris. But bidders will have to be patient until July 2005 when the winner is slated to be unveiled.

In the meantime London could take some consolation in history; Los Angeles, Moscow, Montreal, Tokyo and Amsterdam all won the right to stage the Olympics at the second attempt. And current favourite Paris narrowly lost the bid for 2008.

It is a poisoned chalice, but hosting the Olympics is still much coveted. Maybe each new bidder truly believes that they could be the one to set the benchmark and establish a truly successful modern Olympics.

• David Harding is a freelance journalist