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Despite Debt Risks, Cities Still Put In Bids To Host The Olympic Games

NOEL KING, HOST:

The Olympics have always been a feel-good international sporting event that, without exaggeration, bring the world together. The Olympics are also now a multibillion-dollar industry.

Ramtin Arablouei, the co-host of NPR's history podcast, Throughline, looked into how this evolved.

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RAMTIN ARABLOUEI, BYLINE: In 1970, the International Olympic Committee, or IOC, selected Denver, Colo., as the host of what would be the 1976 Winter Olympics.

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UNIDENTIFIED NARRATOR #1: Most of all, the people of Denver want to share a truly enriching experience at the XII Winter Games. We hope we'll see you in '76.

ARABLOUEI: But if you search for the 1976 Denver Olympics, you won't find much.

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JULES BOYKOFF: That's 'cause they never happened.

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ARABLOUEI: This is Jules Boykoff. He's a professor at Pacific University in Oregon and has authored a bunch of books on the Olympics.

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BOYKOFF: People across the political spectrum, from fiscal conservatives to environmentalists, came together and we're very concerned about what hosting the games would do to the mountains around Denver, not to mention the costs that were involved in it.

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UNIDENTIFIED PERSON #1: I don't want it. I'd rather watch it in Germany or France or somewhere.

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BOYKOFF: So they put together this referendum for the state of Colorado that said that voters got to choose whether they would give money over, their taxpayer money, to this Olympic spectacle.

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UNIDENTIFIED REPORTER #1: Colorado voters decided they did not want the 1976 Winter Olympics being held in Colorado.

ARABLOUEI: Denver got off Olympics- and debt-free.

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BOYKOFF: The Montreal Olympics - now, those games actually did happen. And what happened there was the mayor of Montreal, Jean Drapeau, infamously claimed that the Montreal Olympics could no more have a deficit than a man could have a baby.

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JEAN DRAPEAU: I repeat it. I repeat it. These games - 1976 Montreal - will be the first Olympic Games that will be entirely self-financed.

ARABLOUEI: But...

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BOYKOFF: Guess what? Those Olympics cost $1.5 billion. They didn't get paid off for 30 years, until 2006.

ARABLOUEI: And who was left to foot the bill? The people of Montreal, not the IOC.

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UNIDENTIFIED REPORTER #2: And some taxpaying Montrealers have come to know it as The Big O.

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ARABLOUEI: Cities were realizing that hosting the Olympics was a gamble. And they'd probably lose. So the IOC needed to lure cities back in.

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UNIDENTIFIED REPORTER #3: To take the games from the bankrupt boycott era and make them the world's favorite sports festival.

ARABLOUEI: And the 1984 games in Los Angeles were their chance.

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UNIDENTIFIED ANNOUNCER: Welcome to the opening ceremonies of the Games of the XXIII Olympiad at Los Angeles.

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UNIDENTIFIED REPORTER #4: At issue is the financial responsibility of the Olympics. The IOC position - if a city hosts the Games, it picks up the tab.

BOYKOFF: Meanwhile, the mayor of Los Angeles at the time, a guy named Tom Bradley, promised residents of Los Angeles that public money would not be used in the Olympics.

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TOM BRADLEY: We will not host the Games unless we can ensure that the city of Los Angeles will be free of financial liability.

BOYKOFF: So what happened was the organizers of the Olympics cut a deal with the United States Olympic Committee that took the unprecedented step of saying that they would share financial responsibility for the games, not the city of Los Angeles. Now, all of this set the perfect storm for privatization.

ARABLOUEI: Which set the stage for sponsors.

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BOYKOFF: A smaller number of corporate sponsors who they milk for more money.

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UNIDENTIFIED NARRATOR #2: Budweiser salutes the Olympic spirit in guys like Mike Prescott (ph) and everybody out there...

ARABLOUEI: Budweiser, McDonald's, big sponsors.

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UNIDENTIFIED NARRATOR #3: Feel like you're part of the Olympic action. Play McDonald's When The U.S. Wins, You Win Olympic Game.

UNIDENTIFIED PERSON #2: (As character) What's your event?

UNIDENTIFIED PERSON #3: (As character) Women's freestyle relay.

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BOYKOFF: You started to see corporate entities start to have to pay nine-figure costs to get involved in the sort of five-ring spectacle.

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ARABLOUEI: The LA Olympics ended up being a huge success for Los Angeles and the IOC. In fact, the IOC made a $225 million profit, which was the first time they were in the green since 1932.

BOYKOFF: And this, by the way, really catches the eye of the people running the International Olympic Committee. They're like, hey, this is a real possibility here.

It gave a steady flow of money. And that corporate sponsorship model stays in place today.

ARABLOUEI: The Olympics in Los Angeles suddenly give the IOC a ton of leverage in their negotiations with cities bidding to host the Olympics. And the financial successes would continue for the IOC, not the hosts. Cities did keep going into debt, as we saw most recently with the 2016 Rio Olympics. Rio went millions of dollars into the red. And when they asked for help, the IOC basically said, no, claiming that they'd already paid a little over $1.5 billion.

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BOYKOFF: The Rio Olympics really crystallized a lot of the problems with the Olympics that are endemic problem.

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DICK POUND: No. On that issue, he's just wrong.

ARABLOUEI: This is Dick Pound.

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POUND: I am a - I guess, the longest serving active member of the International Olympic Committee.

ARABLOUEI: And he disagrees with many of Jules Boykoff's arguments.

POUND: It's pretty difficult. You know, I mean, the IOC is a very small organization, even though it's got an important role to play.

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POUND: And we depend on the good faith of the host country to put that into execution, knowing that they're the ones in the end that have to live with the consequences if they get it wrong.

ARABLOUEI: Regardless of who's responsible, one thing's clear.

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ARABLOUEI: Hosting the Olympics can be a risky proposition for cities. So that begs the question, why do cities still put in bids to host the Olympics?

BOYKOFF: The only reason that cities still bid on the Olympic Games is that it's because the elites in those cities bid on the Olympics.

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BOYKOFF: The other reason is because it's become a real venue for sportswashing.

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BOYKOFF: A good example of sportswashing is the upcoming Beijing Olympics in 2022, where you'll see leaders from China and other leaders from around the world who are sort of - more authoritarian-bent using the Games to stand on the pedestal and look important.

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BOYKOFF: Olympic spectacle is a powerful drug. And I think a lot of us know that from personal experience. And I think it's become increasingly difficult to square an appreciation of athletes with the ugly underbelly of politics and economics that make the Olympics happen.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.