Why China's Olympics will be challenging

By Andrew Hammond

Many governments still perceive that hosting major sporting contests commands huge national prestige, yet that assessment may be sorely tested with the mounting challenges facing the Winter Olympics in Beijing.

The event is only the latest sporting contest to be plagued by political plus wider risks and controversies underlining the potentially massive challenges associated with such tournaments. This is not least given the huge operating costs associated with running them, including maintaining security.

The success of the Beijing Olympics, which opened last week, is threatened by coronavirus outbreaks across the nation. And this comes around the Lunar New Year, an annual travel holiday in China which kicked off last Tuesday when an estimated 1 billion trips will be made.

Until Thursday, Beijing had only recorded infections with the Delta variant with no trace of Omicron cases for three days in a row. Yet, the number of cases among those linked to the Olympics has now risen to over 100, despite China's 'zero virus' policy.

The Winter Olympics also met a diplomatic boycott by multiple Western countries, including the United States, United Kingdom and Australia, centered over concerns about human rights in Xinjiang. This heated topic is also one which many NGOs are also focusing on by targeting big brands which have endorsed or sponsored the Olympics.

While the challenges facing the Beijing Games are particularly prominent, they are by no means unique. Last summer's Japan Olympics for instance saw a state of emergency in Tokyo and nine other regions for weeks beforehand to try to control the pandemic. Meanwhile, overseas fans were barred from attending the event which had been postponed by a full year to 2021.

Yet, the coronavirus crisis is only the latest example of health, economic, political and wider risks and controversies afflicting such tournaments. Take the example of the European Football Championships in 2016, awarded to France to great fanfare in 2010 by UEFA, but which took place in a country operating under an official state of emergency following the 2015 terrorist attacks in Paris forcing French authorities to deploy some 90,000 police, soldiers and security guards.

The 2016 Summer Olympics in Brazil also offers a stark case study too. When Rio won in 2009 the right to host the Games, the economy was booming and the country enjoyed significant prestige as a leading emerging market within the so-called BRICS club.

In 2016, however, Brazil was mired in a political crisis surrounding the impeachment of then-President Dilma Roussef, and the-then worst recession in decades which forced significant spending cuts to the Olympic budget.

Further, more than 100 prominent doctors and professors wrote an open letter to the World Health Organization (WHO) asking for the games to be postponed or moved from Brazil "in the name of public health" in light of the-then widening Zika outbreak. Prior to the coronavirus pandemic, Zika was the worst health crisis facing Brazil since at least 1918.

The problems afflicting both of these 2016 contests also underlines the expense of hosting such mega tournaments. For instance, the total investment in modernizing new stadiums, alone, for Euro 2016, is estimated to be some 1.6 billion euros which, by itself, is larger than the reported target of 1.4 billion euros for broadcast rights and sponsorship income.

The mismatch between revenue and expenditure was, if anything, even starker with the Rio Olympics. Brazil spent at least $10 billion on the event, and probably much more in practice, reported to be in significantly excess of the revenue the Games generated, especially as many tourists were put off from traveling to the country because of Zika.

So despite the fact that hosting major sporting events continues to be seen as a source of national pride, growing evidence indicates that they do not generally provide a substantial economic boost to national economies from stimulus like capital investment and tourism.

For instance, many of the visitors tend to come from the host country whose spending often simply displaces that on other domestic leisure services. Moreover, the legacy value can be limited too, with many facilities built at high cost simply becoming 'white elephant' projects falling into disuse.

Despite all these pitfalls, however, there remains no shortage of cities wanting to host the 2036 Summer Olympics, following up on Paris in 2024, Los Angeles in 2028 and Brisbane in 2032. Meanwhile, numerous countries have already expressed firm intent to host the 2030 Winter Olympics, building from Milan and Cortina d'Ampezzo in 2024.

For the foreseeable future at least, what this collectively underlines is that the perception that hosting such sporting events is a major symbol of national prestige will continue to trump the headaches that can come with staging them. However, that tide may yet turn in the opposite direction, and the next fortnight in Beijing could be key to that calculus.

Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.