Speaker 1: Bloomberg Audio Studios, podcasts, radio news. In just two weeks,
Speaker 1: the thirty third Olympics will get underway in Paris, and
Speaker 1: for the first time in history, the Summer Games won't
Speaker 1: kick off in a stadium, but instead on a river
Speaker 1: the seen And that's not the only thing that will
Speaker 1: be different about this year's Olympic Games.
Speaker 2: I think what's at stake is nothing less than the
Speaker 2: credibility of the IOC.
Speaker 1: Hugo Miller is a reporter with Bloomberg who's been covering
Speaker 1: the run up to the Games. He says the reason
Speaker 1: that Paris has become such a high stakes event for
Speaker 1: the International Olympic Committee or IOC, has to do with
Speaker 1: the history of the Games and their history of blowing
Speaker 1: the budget.
Speaker 2: From really the origins of the Games, when they were
Speaker 2: first the modern incarnation Olympics, it was very much about prestige.
Speaker 2: It was very much about pomp and circumstance. What that
Speaker 2: led to over time was a very bloated form of games.
Speaker 2: There was no sense of not doing things. It was
Speaker 2: always about doing things and more when in doubt add
Speaker 2: another ceremony or whatever it might be.
Speaker 1: But a series of Olympics marred by terrorism and cost
Speaker 1: overruns in the nineteen seventies called that strategy into question.
Speaker 2: It began with the terrible tragedy of the murder of
Speaker 2: eleven Israeli athletes in Munich in nineteen seventy two.
Speaker 3: So shame on you, International Olympic Committee, because you have
Speaker 3: forsaken the eleven members of York Olympic family.
Speaker 2: Then in nineteen seventy six you had an absolute fiscal
Speaker 2: disaster that beset Montreal. Then you had the Winter Olympics
Speaker 2: which were scheduled to be held that year in Denver,
Speaker 2: before the taxpayers revolted and said no thanks.
Speaker 1: Innsbruck, Austria eventually agreed to host the Winter Olympics in
Speaker 1: nineteen seventy six, but more sees followed. The nineteen eighty
Speaker 1: Summer Olympics in Moscow were boycotted by sixty five countries,
Speaker 1: including the United States, due to the Soviet Union's war
Speaker 1: in Afghanistan.
Speaker 4: The final outcome we'll say more about the state of
Speaker 4: East West relations than about international sport. It certainly looks
Speaker 4: as if the Olympic spirit is going to have to
Speaker 4: struggle to survive.
Speaker 1: By nineteen eighty four, very few cities were clamoring to
Speaker 1: host the games.
Speaker 2: You had a whopping two bidders, you had Los Angeles
Speaker 2: and Tehran, but that bid quickly became very complicated when
Speaker 2: a revolution overtook the country. So essentially the IOC was
Speaker 2: left with a single bidder, and that was mister Peter
Speaker 2: Eyuberoth and his bid in La.
Speaker 1: Peter Uberoth was a star water polo athlete in college
Speaker 1: who dreamt of one day becoming an Olympian, but he
Speaker 1: couldn't quite make it as an athlete and instead found
Speaker 1: it a successful travelingecy. His background as a successful business
Speaker 1: person meant he had a different vision for how the
Speaker 1: Olympics should be run.
Speaker 2: He said, listen, I essentially think we need to run
Speaker 2: a modern, no nonsense games. We're going to house athletes
Speaker 2: and student dormitories. We're not going to build any stadia.
Speaker 2: We're going to use the existing Rose Bowl and the
Speaker 2: LA Coliseum, and we're going to do this and we're
Speaker 2: going to do this on budget, on time the way
Speaker 2: I want to do it. And essentially IOC had no
Speaker 2: choice because that was the only big going.
Speaker 1: So on July twenty eighth, nineteen eighty.
Speaker 2: Four, Movies for You on the five of U leagues
Speaker 2: in the world.
Speaker 1: Then President Ronald Reagan opened the twenty third Olympic Games
Speaker 1: in Los Angeles.
Speaker 3: I declare hope the Olympic Games of Los Angeles.
Speaker 1: The ceremony featured eighty four grand pianos being played by
Speaker 1: eighty four LIBERACEI lookalikes.
Speaker 2: So it certainly had glitz. It certainly had a kind
Speaker 2: of hollywoods sizzle. But what it didn't have is a
Speaker 2: sense of sort of unlimited budgets.
Speaker 1: The Games were the first to include the women's marathon,
Speaker 1: rhythmic gymnastics, and synchronized swimming as events, and they were
Speaker 1: also the first to ever turn a profit, meaning Uberov
Speaker 1: did eventually achieve his dream of making Olympics history.
Speaker 2: He famously was the first and I think to this day,
Speaker 2: only Olympic Games architect that managed to deliver a sizeable
Speaker 2: profit of some two hundred and fifty million dollars.
Speaker 1: Today, on the show Why Paris is trying to follow
Speaker 1: in LA's footsteps and what a paired down, cost conscious
Speaker 1: Olympics could mean for the future of the Greatest show
Speaker 1: on Earth, I'm Sarah Holder, and this is the big
Speaker 1: take from Bloomberg News. To understand just how hard it
Speaker 1: is to run a profitable Olympic Games helps to understand
Speaker 1: how the games make money, says Bloomberg reporter Hugo Miller.
Speaker 2: The games are paid for with a very carefully determined budget,
Speaker 2: which is made up essentially of revenues from sponsorship. From
Speaker 2: what's called the top sponsorship, it's the Olympic Partnership program
Speaker 2: right now, they include Ali Baba, Airbnb, Bridgestone, Tires, Coca Cola, Intel,
Speaker 2: to name just a few, and they will contribute what
Speaker 2: is currently thought to be between two and a half
Speaker 2: to three billion dollars for an Olympic cycle, and that
Speaker 2: would be a four year period.
Speaker 1: But that's not the only source of revenue.
Speaker 2: There's also revenue coming from.
Speaker 1: TV rights, though that could be changing as viewer habits change. Already,
Speaker 1: TikTok announced a sponsorship agreement with the British Olympics team,
Speaker 1: which brings us to a third source of revenue funding
Speaker 1: from the private sector.
Speaker 2: And the challenge I think every organizer has is to
Speaker 2: maximize the contributions from the private sector and minimize the
Speaker 2: amount of simple donations or funding from state coffers.
Speaker 1: The aim is to make sure that it's not cities
Speaker 1: themselves that are actually paying for the cost of the games,
Speaker 1: but that's been hard to achieve.
Speaker 2: There is a difference between what is spent on the
Speaker 2: games and what is spent on the infrastructure of the games,
Speaker 2: and that's where the Olympics have got into trouble.
Speaker 1: Hugo says that even though Peter Uberot's nineteen eighty four
Speaker 1: La Olympics offered a roadmap for how to run a
Speaker 1: profitable games, like, for instance, by using stadiums that already
Speaker 1: existed for many years, organizers just didn't heed those lessons.
Speaker 1: Take the Athens Olympic Games in two thousand and four,
Speaker 1: which cost over ten billion dollars.
Speaker 2: There are some people that even say that the sovereign
Speaker 2: debt crisis that befell the EU ten years ago, which
Speaker 2: began in Greece, began with the Olympics.
Speaker 1: Then there was Sochi in twenty fourteen. In those games,
Speaker 1: the Russian government spent over fifty billion dollars, and then
Speaker 1: the twenty sixteen Rio Games, which became known for building
Speaker 1: white elephants stadiums for events that went unused after the games.
Speaker 2: There were famously photos of the Olympic swimming pools filled
Speaker 2: with just sort of green mold in the water six
Speaker 2: months after the games. Terrifying.
Speaker 1: Yeah, these cost overruns and abandoned projects made it harder
Speaker 1: and harder for cities to convince their residents that hosting
Speaker 1: the Olympics was all it was cracked up to be.
Speaker 2: There are a number of cities where the citizens have
Speaker 2: ultimately decided that no, thank you, we don't want to
Speaker 2: host the games. This was true of Rome, this was
Speaker 2: true of Boston, this was true of Oslo, Norway. In fact,
Speaker 2: the Winter Olympics for twenty twenty two that were just
Speaker 2: held in Beijing, there was only two bidders. There was
Speaker 2: Beijing and al Mati. Because the other bidders that were
Speaker 2: essentially all in Europe had all said no thank you.
Speaker 1: IOC decided something had to be done, so they changed everything,
Speaker 1: including how cities even raise their hand to host the Olympics.
Speaker 2: So, rather than having a beauty pageant where the IOC
Speaker 2: delegates physics cities and then there was a grand opening
Speaker 2: of an envelope a year later and the winner is
Speaker 2: announced and all the others go home and cry into
Speaker 2: their beers, you have a very different system where you
Speaker 2: have countries saying hey, I'm interested, and the IOC says, okay,
Speaker 2: what are you thinking? And then there's a series of
Speaker 2: conversations that are held privately, which some people might say, well,
Speaker 2: that's not a very transparent process. But what it does
Speaker 2: allow is it allows the IOC to be much blunter
Speaker 2: and say, you know, I think this is a nice idea,
Speaker 2: but you're not ready.
Speaker 1: Hugo says. This has meant that fewer cities are even
Speaker 1: submitting bids, but that's fine as far as the IOC
Speaker 1: is concerned, since the bids it is getting are now
Speaker 1: more likely to be realistic, which brings us to Paris.
Speaker 2: The IOC is definitely hoping that Paris twenty twenty four
Speaker 2: will work, will come off as a shining example of
Speaker 2: a new streamlined, more socially, more fiscally, more environmentally responsible Olympics.
Speaker 1: Coming up after the break Paris's plan to make the
Speaker 1: Olympics more sustainable, and whether it will work. The Paris Olympics'
Speaker 1: organizing Committee has said that its four point seven billion
Speaker 1: dollar budget will be ninety six percent finance by the
Speaker 1: private sector. Government officials have said that the Games will
Speaker 1: be the most economical in decades, Bloomberg's Hugo Miller says
Speaker 1: they have taken notable steps to make sure those statements
Speaker 1: are more than just talk.
Speaker 2: Paris is not spending large amounts on new stadia. It's using,
Speaker 2: in fact, an old stadium used to host the World
Speaker 2: Cup as their main athletics venue. They are stressing the
Speaker 2: construction of temporary facilities. They're even going to be holding
Speaker 2: beach volleyball beneath the Eiffel Tower using temporary grandstands bleachers.
Speaker 2: So in essence, they're trying to capitalize on the existing
Speaker 2: infrastructure and existing beauty of a city like Paris, and
Speaker 2: that they hope is going to keep costs down.
Speaker 1: But there's always the possibility that something could happen to
Speaker 1: derail even the best laid plans.
Speaker 2: I think the big wildcard in the Paris scenario is
Speaker 2: the security aspect. We just don't know what could be
Speaker 2: happening or could happen over the course of the next
Speaker 2: three weeks to four weeks in Paris, and either a
Speaker 2: single event could send cost skyrocketing as suddenly literally thousands
Speaker 2: of additional security needs to be brought in.
Speaker 1: But even with that asterisk, Hugo says that the Paris
Speaker 1: organizers have been getting high marks for their cost consciousness.
Speaker 2: In terms of the operational costs that have been planned out.
Speaker 2: Even Cynics seem to be saying that Paris is doing
Speaker 2: a good job of their planning.
Speaker 1: The hope is that if these games do come in
Speaker 1: on budget, it could serve as a blueprint for subsequent Olympics.
Speaker 2: What begins in Paris is an unprecedented run of six
Speaker 2: Olympics being held in very pretty city scapes, naturally stunning scenery,
Speaker 2: whether you're talking the Alps for the Winter Olympics or
Speaker 2: the likes of a Paris or an La or even
Speaker 2: a Brisbane on the Australian coast.
Speaker 1: But if history is any guide, getting the strategy to
Speaker 1: stick could prove tricky. After LA's nineteen eighty four success,
Speaker 1: cities only managed to learn half of Uberroth's lesson. They
Speaker 1: emulated the Hollywood sizzle and forgot all about the cost
Speaker 1: taming strategies. Plus, Hugo says that it's not just about
Speaker 1: economics when it comes to the Olympic Games, and that
Speaker 1: could lead the games to be hosted in some places
Speaker 1: that don't exactly scream budget.
Speaker 2: I think the chance that the IOC wants to take
Speaker 2: risk of your bets with the Games is very high
Speaker 2: after twenty thirty two. And probably the country that is
Speaker 2: most aggressively, discreetly but aggressively bidding to host the Olympics
Speaker 2: and even Winter Olympics is believe it or not, Saudi Arabia.
Speaker 2: So as crazy as it sounds, it may be the
Speaker 2: case that Saudi Arabia bids for and wins the rights
Speaker 2: to a Winter Games in the twenty thirties to come.
Speaker 1: Why not just have one place host the Olympics every year?
Speaker 1: Why even compete and have to build all these new
Speaker 1: stadiums every year to win the Games.
Speaker 2: That's a very sensible idea, the idea of having one
Speaker 2: single host. People say Athens, it was the historic host
Speaker 2: of the Olympics, so why not Athens? And then why
Speaker 2: not a sensible, fiscally prudent country like Norway hosts the
Speaker 2: Winter Games where there's guaranteed snow. I think that's not
Speaker 2: going to happen because the IOC believes that it wants
Speaker 2: to bring the Olympic spirit around the world. They very
Speaker 2: much believe in that as their mission. So that particularly
Speaker 2: does mean countries with younger demographics not just sort of
Speaker 2: aging Europe and aging North America, but to Africa and
Speaker 2: to Asia and to South America. So, although it makes
Speaker 2: perfect sense from a financial point of view, from a
Speaker 2: sustainability point of view, I just don't think it's going
Speaker 2: to happen because the IOC really believes in this mission
Speaker 2: of theirs, right.
Speaker 1: I guess the Olympics isn't ultimately only about financial prudence.
Speaker 1: It's about having the world come together for this event.
Speaker 2: We forget that, but it's supposed to be about a
Speaker 2: two week festival of sporting excellence.
Speaker 1: So, Hugo, are you going to the Olympics this year?
Speaker 1: What sport are you most excited to watch there?
Speaker 2: Indeed I am. I hope I can get out of
Speaker 2: the city for at least an afternoon to catch the biking,
Speaker 2: the mountain biking. If not, hopefully I will catch some
Speaker 2: of the road racing through the scenic streets of Paris.
Speaker 1: That's it for this episode of The Big Take from
Speaker 1: Bloomberg News. I'm Sarah Holder. This episode was produced by
Speaker 1: David Fox. It was edited by Tom O'Sullivan. It was
Speaker 1: mixed by Blake Maples. It was fact checked by Jessica
Speaker 1: beck Our Senior producers are Naomi Shaven and Kim Gettelson,
Speaker 1: who also edited this episode. Our senior editor is Elizabeth Ponso.
Speaker 1: Nicole beamsterbor is our executive producer. Sage Bauman is Bloomberg's
Speaker 1: head of podcasts. If you like this episode, make sure
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Speaker 1: so much for listening. We'll be back on Monday.