Chicago's Olympic Bid: Both a Blessing and a Burden

The White House announced today that President Obama was dispatching the nation's most powerful messenger to make the final pitch for Chicago's 2016 Olympics bid: himself. He'll be joining a star-studded bid team; the White House had previously advised that the first lady and senior adviser Valerie Jarrett, another Chicago native, would be heading up the charge. The first couple will each make a presentation about why Chicago is best placed to host the celebrated games and to "celebrate the ideals of the Olympic movement," according to the White House press release.

But why would Chicago even want to host this mammoth and at times disruptive event? Hosting the Olympics is a mixed blessing. It can be a prestigious honor, allowing a city to show off its charms to a captivated world audience, as well as to the influx of international visitors. The opening and closing ceremonies are an opportunity to exhibit a nation's cultural and technical prowess, while hometown teams nearly always perform better in the games themselves. On the downside there's the enormous expense and the inconvenience of constructing new facilities. While Chicago residents will ultimately benefit from upgrades to their transit system, hotels, and recreational infrastructure, they'll no doubt be hampered by the years of public-works projects and interruptions to traffic and trains. And of course they'll be paying for it. Host cities nearly always end up forking out well over their budgeted amount. Estimates for the cost of the London Olympics have almost tripled since that city won the right to host the 2012 games.

Weighing all of this is difficult. Many of the cultural benefits are unquantifiable, and it's difficult to tell which public-works projects would have happened regardless. The Olympics will provide a great excuse for improving Chicago's aging rail system, which will be enormously beneficial in the longer term. But would that have happened anyway? Who knows. Perhaps the best measure for the impact of the Olympics on a city is to look at precedent. Take Sydney, for example. (I have to admit to some bias here. Being an Aussie and an unabashed fan of the Olympic games in general, I was inordinately happy with the Sydney Olympics and, having seen Sydney before and after, believe it prompted significant improvements to the city.) 

According to the New South Wales treasurer (Sydney is the capital city of the state of New South Wales), staging the Olympics cost $6.5 billion (all figures are in 2001 Australian dollars), a cost that was shared among the state government, the private sector, the federal government, and the Olympic organizing committee. Ticket sales and sponsorship helped to contribute revenue. Accounting firm Arthur Anderson estimated that over the period from 1994-95 to 2005-06, the Olympics generated about $6.5 billion in additional economic activity, the large majority of which occurred within New South Wales. A 2001 study presented to the International Chair in Olympism estimated that this represented a 0.12% uptick for the Australian economy over 12 years. The study's author, Jill Haynes, found that the Olympics prompted an addition $1.4 billion in income for Australia in the financial quarter in which the Olympics were held. Just under $1 billion of that amount came from broadcast fees. That quarter Australia saw its first trade surplus in three years.

In terms of tourism, Haynes estimated that the Games brought an extra 1.6 million international visitors to Australia over a seven-year period, creating 150,000 new jobs and $6.1 billion in tourism revenues. However, Australia's tourism success could be difficult to replicate. Geographically isolated, getting to Australia is a long and expensive journey for most, so it's natural for tourists having made the trip to stick around for a bit longer, taking in additional sights while they're there. The Australian government was particularly cognizant of the opportunities for promoting tourism and through a dedicated authority, the Australian Tourist Commission, made significant strategic investment to market "Brand Australia."

It's hard to draw a clear conclusion from these various data points. Australia received a modest uptick in economic activity, but at an enormous cost. The reputational and branding ramifications are largely intangible. From my experience though, the one unequivocal takeaway was an unexpected and overwhelming surge in national and civic pride. The lead up to our Games was a rocky one, marred by logisitical screw-ups, budget blowouts, anger over ticket allocations (Sydneysiders believed that a ticket lottery system was corrupted and unfairly granted tickets to the rich) and bribery scandals (both local and international). By the time 2000 rolled around, most Aussies were unenthusiastic about the Games, fearing that we'd look like a bumbling backwater on the world stage. But we didn't. We rocked it. And we were proud. So very, very proud. Instead of cringing over our opening ceremony, we were enthralled by it. When IOC Chair Juan Antonio Samaranch declared Sydney's Olympics the "best ever"—an honor he bestowed every Olympics he presided over except Atlanta—we believed that this time, for us, he really meant it. More than 47,000 people volunteered to work at the Games, and their good cheer and enthusiasm was rewarded by a ticker-tape parade not long after the Games closed, which was attended by 100,000 people. That moment of community revelry may have been ephemeral, but it was also deeply memorable. The joy on Sydney streets and in Aussie living rooms was hard to describe.

I'd hazard a guess that Chicagoans, if their bid is successful, will have a similar journey. Over the next seven years they'll grumble about the cost, the traffic, the interruptions. They'll be shocked by incidents of planning incompetence. They'll be annoyed that so much effort is being put toward two weeks of fun while their schools and libraries appear neglected in comparison. And, being Chicago, there will no doubt be a bribery scandal or two. But when it's all said and done, and their voices are hoarse from cheering, they'll just want to do it all over again.